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NHTC Apologizing Publicly In China - Time To Inform U.S. Investors And Give Q1 Guidance?

|Includes: Natural Health Trends Corp. (NHTC)
Summary

NHTC Management in China "bends over" and apologizes to the public in China (see pics). I see this as an indication of how serious the situation is. IMO MATERIAL EVENT!

Quite a 180 degrees change from NHTC president Chris Sharng statements to U.S. investors, where NHTC has yet to admit any wrongdoing.

BJ saic Investigation, NHT Global China management bending over and apologizing in public. Situation seems very serious. I expect a -70% revenue drop in Q1. U.S. investors still waiting updates/comment.

NHT Global Management in China "bends over" and apologizes to the public. Quite a 180 degrees change from NHTC president Chris Sharng statements to U.S. investors

Since China accounted for approximately 90% of NHTC revenue, I expect an immediate 70-80% revenue drop for NHTC, now that the Company has come clean in China and admitted the problems!  Time for disclosure to U.S. markets?

It seems that NHT Global held a public press conference and admitted wrong doings this past Saturday. See following links, and translate them:

https://view.inews.qq.com/a/20190120A000RU00

http://www.bjnews.com.cn/finance/2019/01/19/541155.html

http://finance.eastmoney.com/a/201901191030262548.html

UNEMON’S INTERPRETATION? In a desperate attempt to save his own “asses”, NHT Global management in China just threw under the Bus NHT Global members and Distributors (responsible for generating 90% of the Company’s revenue).

The guy bending over (in the middle) is NHTC Executive Vice President of Greater China and Southeast Asia:

https://nhtglobal.com.hk/company/management-team/

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Did on January 7, 2018 NHTC not issue the following statement:

Company rejects the claims made that Natural Health Trends is operating illegally in China. The Company believes short sellers arranged with associates at CCTV to create a deceptive exposé about the Company and its products attempting to misleadingly portray the business as a pyramid scheme.

https://www.sec.gov/Archives/edgar/data/912061/000091206119000002/ex99-1.htm

Now compare the information reported on during the NHT Global Apology media conference with the disclosure regarding this situation that NHTC president Chris Sharng provided to U.S. investors:

January 7, 2019: “ Natural Health Trends is committed to conducting business with honesty, integrity and fairness in accordance with the highest ethical standards,” commented Chris Sharng, President of Natural Health Trends Corp. We are confident that our operations in China are in compliance with all applicable regulations. We believe these inaccurate claims were made in an effort to damage our brand, business in China, reputation and shareholder value, and we are prepared to vigorously defend our Company.”

https://www.sec.gov/Archives/edgar/data/912061/000091206119000002/ex99-1.htm

Moreover, January 17, 2019, just 2 days before the NHT Global apology media conference NHTC commented to U.S. investors about the China situation as following:

Last week the Chinese government announced a comprehensive 100-day campaign nationwide to review and focus on the regulations for certain food, equipment, daily necessities, small home electrical appliances and services that producers claim to promote health functions. While the results of this program are not yet clear, the Company believes this is a positive development that will benefit Chinese consumers and NHT Global in the long-term.

https://www.sec.gov/Archives/edgar/data/912061/000091206119000005/ex99-1.htm

LOOKS LIKE THE FOLLOWING COMPANY’S STATEMENTS MEAN THE IMMEDIATE IMPLOSION OF THE MLM NETWORK. Approximately 90% of NHTC revenue was generated this way. I expect a -80% guidance revision.

MORE DETAILS: 

http://www.cntimes.info/docDetail.jsp?coluid=141&docid=104755987

然健環球在公開致歉信中稱,日前,由於然健環球(中國)日用品有限公司少數會員在推介然健環球產品時,擅自誇大包括“諾麗果汁”在內的產品營養功效,擅自誇大然健環球基於國際電子商務的產品經銷和消費模式,對廣大消費者和部分會員造成了誤導,造成了部分會員的經濟損失,被中央電視台、新京報等新聞媒體批評。對此,然健環球(中國)日用品有限公司深表歉意,也深感自責。對媒體報道中提到的誇大產品功效、多層級發展消費會員、將產品消費與產品經銷混同等問題,然健環球將嚴肅認真地自查自糾,主動積極配合政府相關部門嚴肅處理違法違規者。然健環球一向高度重視媒體的批評與監督,今後,對發現的問題絕不姑息,對違法違規者絕不姑息,對誇大產品功效宣傳者絕不姑息。

Google Translate: “In a public letter of apology, Rankin Global said that a few members of the company (China) Commodity Co., Ltd. exaggerated the nutritional benefits of products including Noni Juice, Based on international e-commerce product distribution and consumption patterns, NHT Global has misled the vast number of consumers and some members, causing economic losses for some members. It has been criticized by CCTV, Beijing News and other news media. In this regard, NHT Global (China) Commodity Co., Ltd. apologizes and feels guilty. Regarding the exaggerated product efficacy mentioned in the media reports, the multi-level development of consumer members, the mixing of product consumption and product distribution, the company will seriously and self-examination and self-correction, and actively cooperate with relevant government departments to seriously deal with violations of laws and regulations. NHT Global has always attached great importance to the criticism and supervision of the media. In the future, it will not tolerate the problems found. Those who violate the law will not tolerate it. The propagators who exaggerate the product efficacy will not tolerate it.”

UNEMON’S INTERPRETATION? In a desperate attempt to save his own “asses”, NHT Global management in China just threw under the Bus NHT Global members and Distributors (responsible for generating 90% of the Company’s revenue).

I highly doubt an "apology" can have any impact on investigation outcome. 

- MORE LINKS -

https://finance.sina.com.cn/chanjing/gsnews/2019-01-21/doc-ihrfqziz9552175.shtml

http://www.sohu.com/a/290569448_387820

https://hk.news.yahoo.com/video/15%E5%B9%B4%E5%89%8D%E8%A2%AB%E6%9B%9D%E5%85%89%E5%A6%82%E4%BB%8A%E9%82%84%E5%AE%89%E5%9C%A8-%E7%84%B6%E5%81%A5%E7%92%B0%E7%90%83%E5%8C%85%E6%B2%BB%E7%99%BE%E7%97%85%E7%9A%84%E6%9E%9C%E6%B1%81%E4%BD%A0%E5%96%9D%E9%81%8E%E5%97%8E-105400292.html

Disclosure: I am/we are short NHTC.