Credit China trades at 45x 2017 earnings,which we believe may be due to end-of-day trading manipulation, based on our analysis of intraday trading activity. Additionally, we believe Credit China has misled investors by engaging in a number of questionable transactions. In one example, online evidence suggests that the largest acquisition in Credit China’s public history was from an undisclosed related-party. In another example, we believe a major property purchase wascarried out to funnel money out of the Company and inflate earnings.

This morning, Credit China released a clarification announcement in response to our 13 December 2016report question the Company.The clarification announcement left us in awe as to how ridiculous some of the excuses were and howmuch of the evidence in our report Credit China simply chose to ignore. This response focuses on ourtwo main points concerning Credit China, specifically the acquisition of Shanghai Jifu and the acquisition of the property in Shanghai (“Shanghai Property”).

Last year, Credit China acquired a 35% stakein a company called Shanghai Jifu for RMB560 million in cash and shares. This was the largest acquisition in Credit China’s history. Based on a review of relevant SAIC filings we believe that several of Shanghai Jifu’s top customers are entities with negligible operations unlikely to conduct business of the size claimed. In one case, it appears a company claimed to be Shanghai Jifu’s largest customer in 2014 wasn’t even established until 2015.