Fanned by market rumours that research firm Muddy Waters maynissue a negative report on China Yurun Food Group, the Chinabasednmeat processor witnessed over a 24% plunge in its sharenprice between 27-28 June. With investor confidence in Chinesenfood producers already fragile due to repeated food safety scandals,nit was hardly surprising that market speculation alone has fuellednaggressive short-selling in Yurun. However, given that Yurun’snfundamental growth story remains strong and our positive outlooknfor China’s pork consumption, we believe the company’s sharesncould recover its lost ground in the near term, and a gain of 6.3% innYurun’s share price since June 28 is bearing out this view
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