Yesterday, August 13, 2012, the Nasdaq halted trading in Deer
Consumer Products (
) until the company has "fully satisfied Nasdaq's request for
additional information." I applaud the Nasdaq's decision, coming
over a year after I first questioned DEER
. In today's report, I will show the likely reason DEER was finally
Deer Consumer Products has reported spectacular growth in sales
from its Chinese domestic kitchen appliance manufacturing business
each of the last four quarters, as well as reiterated truly
stunning 2012 sales guidance, as shown in the following table:
Click to enlarge
Unfortunately for investors, DEER's miraculous growth is
completely contradicted by the simple fact that its two exclusive
manufacturing facilities in Yangjiang (appearing adjacent to each
other outlined in yellow in the picture below)
are completely idle.
Most recently, onAugust 3, 2012, I had an independent
third-party investigator visit DEER's two Yangjiang factories. He
noted that there was no sign of any production activities or
workers other than security and maintenance personnel.
Two photos from his visit appear below.
The glaring questions are now:
1) How long ago were DEER's factories shut down?
2) Why were they shut down if manufacturing kitchen appliances
is as profitable as DEER claims?
3) Why was there no 8-K disclosing the factories were shut
4) How many historical 10-Qs and 10-Ks need restatement?
Some clues can be found in DEER's SEC filings. Consider DEER's
reported headcount at year-end reported in its 10-K filings and
reflected in the following table:
According to its 2011 10-K, at 12/31/11, DEER had only 437
employees (excluding sales and marketing staff), a decline of 78%
from the prior year, despite a 29% increase in revenue. This
contradicts the growth and earnings continuously reported by DEER
and touted by Benjamin Wey of New York Global Group
as the "world's largest producer of blenders and
Likewise, DEER's reported employee welfare expenses reported in
its 10-Qs have fallen to almost nothing in recent quarters, hardly
indicative of a growing world-class company as shown in the
Unable to disprove the evidence against the company, for over
one year DEER has attempted to shield itself from my allegations by
filing frivolous and abusive defamation suits to silence me. DEER's
failedapproach , like that of Sino Clean Energy (
), will surely end in delisting.
I have no positions in any stocks mentioned, and no plans to
initiate any positions within the next 72 hours.
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