In this report, we present multiple independent data points which, in our opinion, indicate that Feihe overstates IMF revenues, understates billions in operating costs such as advertising and labor expenses, understates headcount by as much as 10x, and materially inflates profitability. Notably, Feihe recognizes revenue when it hands products to its logistics providers, which Feihe repeatedly insists are independent third parties. But our investigation indicates that Feihe’s primary logistics company, which claims to transport most if not all of its products, is run by a Feihe employee and operates as part of the Company. We believe that this is fatal to Feihe’s credibility, and to the integrity of its financials.