Another Day, Another Raid: This Time At Natural Health Trends' Guangzhou Corporate China Headquarters

| About: Natural Health (NHTC)

Summary

Major Chinese media confirmed yesterday that NHTC's satellite office in Beijing had been "raided" by Chinese authorities, including police and the SAIC.

Today we present our on-the-ground evidence that the company's corporate Chinese headquarters in Guangzhou was also raided, this time on 1/13/16.

China and Hong Kong account for over 95% of NHTC's sales, according to the company's last 10-Q.

The last time the company was investigated by Chinese authorities in 2004, the stock went to pennies.

We have uncovered brand new blockbuster evidence that shows us that the Natural Health Trends (NASDAQ:NHTC) Chinese regulatory investigation is now happening on a national level, and not just at the company's satellite Beijing offices. We think this may confirm the end of NHTC's business in China.

Over the last few days, we have been monitoring the situation at Natural Health Trends Corporation, where it was first alleged last week that there was a formal SAIC investigation into the company's operations in China. The company's operations in China and Hong Kong account for over 95% of the company's total sales.

After our initial report, the company issued a press release claiming they were "unaware" of any investigation. This came the same morning as it was reported in major Chinese media, like SINA Finance, that the company was under formal investigation and that NHTC's Beijing office had been "raided".

In our continued due diligence, we sent one of our investigators to the company's China headquarters, which is located in Guangzhou. Shortly after our investigator arrived, Chinese SAIC and police were both on the premises at the company's offices.

This additional evidence shows that not only was the company's satellite office in Beijing raided but that Chinese officials and Chinese police raided the company's Chinese headquarters. We sent our investigators there, who were able to capture the follow photographs and video evidence.

Here are our photographs, showing uniformed officials at NHTC's Guangzhou Corporate Headquarters:

Click to enlarge

And here is video footage we were able to take of uniformed officials at the same Guangzhou Corporate Headquarters:

1) player.vimeo.com/video/151647025

2) player.vimeo.com/video/151647022

3) player.vimeo.com/video/151647023

After 3PM local time on 1/13/16, several police officers and SAIC officers raided the company's Guangzhou offices. Based on our observations, the officers were at the headquarters for more than two hours, appeared to search the offices and took files from the offices. The officers left the office at around 5PM, based on our observation.

With this new evidence in hand, we think it is likely that the NHTC investigation by Chinese regulators is now happening on a national scale, and we continue to warn investors that 95% of all of the company's sales comes from China and Hong Kong.

Disclosure: I am/we are short NHTC.

I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.