Chaoda Modern Agriculture Holdings Ltd, the Chinese vegetable producer defending a claim from Next Magazine that it overstated its land holdings, has not exaggerated its assets, Macquarie Group Ltd said after visiting plantations.
Macquarie visited two of Chaoda's largest projects, which represent 17 percent of its farmland, and found "nothing to indicate that Chaoda was exaggerating its land bank", analysts Jake Lynch and Jamie Zhou said in a report dated June 9.
They used global positioning satellite technology and odometers to measure the plantations.
Chaoda Modern Agriculture plunged 34 percent in Hong Kong after Next Magazine reported on May 26 the company exaggerated the size of its farmland.
Support for the stock has also been curbed by allegations against Sino-Forest Corp by Muddy Waters Research that its stated timber holdings don't match Chinese city records, Lynch said.
"We walked away from the trip feeling comfortable, given that 100 percent of what we had visited bore out the company's claims," he said.
Macquarie analysts visited farmland spanning 105,000 mu, or 7,000 hectares, in two provinces, Macquarie said.
The analysts visited and verified Chaoda's three largest production bases in Hebei, which were cited in the Next Magazine article.
The analysts have visited about 28 percent of Chaoda's farmland over the past two years, the research report said.
Sino-Forest's unit Greenheart Group Ltd fell 8.3 percent to HK$1.44 (18 cents) on Monday in Hong Kong.
The shares plunged 50 percent after Muddy Waters, founded by short seller Carson Block, published a report on June 2.