• We believe HEBT is the quintessential example why we need tighter disclosure and auditing regulations for US listed Chinese companies. We believe HEBT has engaged in egregious wrongdoings that should result in immediate delisting.
• HEBT’s stock price has skyrocketed on the back of recent private placements at ever higher prices. These are touted as confirmation of the company, because outside institutional investors are willing to buy at a substantial premium to market price. We discovered that the investors seem to be in fact undisclosed related parties, and we doubt the shares were even paid for! It seems this is a scheme designed to portray real interest in the stock and push the price artificially higher.
• SAIC filings indicate that HEBT’s legacy financials are completely overstated; For example, from 2016 to 2018, the total SAIC revenues are 80.5% lower compared to SEC financials. Total SAIC shareholder’s equity during this period is 93.7% lower compared to SEC reported number. Our supsicions were confirmed by site visits; Locals told us only about 20 people work at HEBT’s valve business.
• HEBT disclosed, however untimely, in its recent 20F and press release two arms-length acquisitions. Our due diligence reveals that the acquired companies are mostly dysfunctional, and were in fact sold to HEBT by insiders who lined their pockets on the deals.
• These deals also show other major red flags. For example, Beijing Hengpu was supposedly acquired by HEBT from a third party per SEC disclosure. The real sellers are actually related to HEBT’s biggest shareholder. Half a year after the transaction was supposed to be consummated, we still find no share pledge from Beijing Hengpu’s shareholders to HEBT. In short, HEBT paid for a company it did not even acquire!
• The company’s IPO underwriter, former and current auditor show major red flags.
THIS REPORT AND ALL STATEMENTS CONTAINED HEREIN ARE THE OPINIONS OF GRIZZLY RESEARCH LLC AND ARE NOT STATEMENTS OF FACT.
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THIS REPORT AND ALL STATEMENTS CONTAINED HEREIN ARE THE OPINIONS OF GRIZZLY RESEARCH LLC AND ARE NOT STATEMENTS OF FACT.
Reports are based on generally available information, field research, inferences and deductions through Grizzly Research LLC’s due diligence and analytical process.
Our opinions are held in good faith, and we have based them upon publicly available facts and evidence collected and analyzed including our understanding of representations made by the management of the companies we analyze, all of which we set out in our research reports to support our opinions, all of which we set out herein. HOWEVER, THEY REMAIN OUR OPINIONS AND BELIEFS ONLY.
We conducted research and analysis based on public information in a manner that any person could have done if they had been interested in doing so. You can publicly access any piece of evidence cited in this report or that we relied on to write this report.
Grizzly Research LLC makes no representation, express or implied, as to the accuracy, timeliness, or completeness of any such information or with regard to the results to be obtained from its use.
We are entitled to our opinions and to the right to express such opinions in a public forum. We believe that the publication of our opinions and the underlying facts about the public companies we research is in the public interest, and that publication is justified due to the fact that public investors and the market are connected in a common interest in the true value and share price of the public companies we research. All expressions of opinion are subject to change without notice, Grizzly Research LLC does not undertake a duty to update or supplement this report or any of the information contained herein.
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To the best of our ability and belief, all information contained herein is accurate and reliable, and has been obtained from public sources we believe to be accurate and reliable, and who are not insiders or connected persons of the stock covered herein or who may otherwise owe any fiduciary duty or duty of confidentiality to the issuer. Note that researched companies and insiders, agents, and legal representatives of researched companies and other entities mentioned herein may be in possession of material non-public information that may be relevant to the matters discussed herein. Do not presume that any person or company mentioned herein has reviewed our report prior to its publication.
This is not an offer to sell or a solicitation of an offer to buy any security, nor shall any security be offered or sold to any person, in any jurisdiction in which such offer would be unlawful under the securities laws of such jurisdiction.
By downloading and opening this report you knowingly and independently agree: (i) that any dispute arising from your use of this report or viewing the material herein shall be governed by the laws of the State of [New York], without regard to any conflict of law provisions; (ii) to submit to the personal and exclusive jurisdiction of the superior courts located within the State of [New York] and waive your right to any other jurisdiction or applicable law, given that Grizzly Research LLC is a Delaware limited liability company; and (iii) that regardless of any statute or law to the contrary, any claim or cause of action arising out of or related to use of this website or the material herein must be filed within one (1) year after such claim or cause of action arose or be forever barred. The failure of Grizzly Research LLC to exercise or enforce any right or provision of this disclaimer shall not constitute a waiver of this right or provision. If any provision of this disclaimer is found by a court of competent jurisdiction to be invalid, the parties nevertheless agree that the court should endeavor to give effect to the parties’ intentions as rejected in the provision and rule that the other provisions of this disclaimer remain in full force and effect, in particular as to this governing law and jurisdiction provision. You agree that the information on this website is copyrighted, and you therefore agree not to distribute this information (whether the downloaded _le, copies / images / reproductions, or the link to these _les) in any manner other than by providing the following link: http://GRIZZLYREPORTS.COM . If you have obtained research published by Grizzly Research LLC in any manner other than by download from that link, you may not read such research without going to that link and agreeing to the Terms of Use on the Grizzly Research LLC designated website.
“Grizzly Research LLC Associated Person” is defined as: Grizzly Research LLC and its affiliates and related parties, including, but not limited to, any principals, officers, directors, employees, members, clients, investors, consultants, and agents.
