NATURAL HEALTH TREND (NASDAQ:NHTC) reported earnings yesterday and posted great numbers due almost exclusively to their Hong Kong business that gives them an inroad to China. Growth in this segment allowed the company to post Q4 revenue growth of 108% and net income of $1.13 per share, but this out-performance may turn out to be short lived.

Natural Health Trends Denies Investigation; Chinese Media Refutes Company’s Statement and Press Release

What NHTC didn’t mention is a newly published article in Chinese media (linked and translated below) this morning that directly refutes statements the company has made about its Chinese regulatory contact and claims that there is a large, ongoing investigation into the company’s business practices.

  • On yesterday’s NHTC earnings conference call, the company’s CEO denies that they are under investigation with Chinese regulatory agencies
  • A follow up report from Chinese media this morning directly contradicts what NHTC put out in their rebuttal press release and the statement that they are not under investigation
  • The same article states that routine examinations are usually only done with 2 officers but serious investigations are done with the help of the Public Security Bureau, like we saw in NHTC’s case
  • China is essentially all of NHTC’s business and the entire company looks to still be at risk of government intervention, which would most certainly cripple NHTC stock

To see the rest of this important update, please go here.