Prince Frog's market value plummets after accusations of fake sales data

Prince Frog International, the mainland childcare product maker that hired pop singer Kelly Chen as its advertising spokeswoman, saw more than a quarter of its market value disappear in two hours yesterday after US short seller Glaucus Research said its sales data was fake.

Headquartered in Zhangzhou, Fujian province, the company reported sales growth of 700 per cent from 2007 to last year, a period when the wider industry reported growth of about 100 per cent.

Glaucus said in a 44-page report yesterday that the data seemed "too good to be true".

One key allegation is that Prince Frog's actual sales were less than 25 per cent of the reported figures. For example, the company claimed to have sold 723 million yuan (HK$919 million) worth of children's moisturising lotions last year, but in fact it only sold 135 million yuan worth, the report said, citing Nielsen, which acquired independent data directly from retailers.

Prince Frog shares plummeted by as much as 26 per cent to HK$4.66 before trading was suspended yesterday morning.

Glaucus' price target for the company is 74 HK cents, with a "strong sell" rating.