SINA (SINA US)

GamingTheNumbers

Sina’s management has taken control of the company without shareholder approval through the issue of new preference shares, as allowed under Cayman Islands law, taking its share of the voting rights to 55%, from 11% previously. This comes in response…
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REVENUE RECOGNITION

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Country Garden boasted that revenues were up 36% in 1H17 but neglected to tell investors that this was primarily due to an accounting change. The introduction of IFRS 15 in 2018 will result in major changes to how revenue is…
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IN-BRIEF: SINOPHARM (1099 HK)

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Sinopharm’s 3Q17 net profit decline of 16% YoY means that consensus expectations for 12% growth in 2017 just became a whole lot more unrealistic. The company is suffering from a double whammy of rapidly deteriorating operating performance stemming from regulatory…
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NOT IN YOUR INTERESTS

GamingTheNumbers

How did China Biologic Products (CBPO) persuade shareholders to allow it to redomicile from the US to the Cayman Islands, and then downgrade to foreign private issuer status? This new structure means that shareholders are getting substantially poorer disclosure, less…
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IN BRIEF: TIBET WATER (1115 HK)

Bubbles

Water and beer bottler Tibet Water Resources (TWR) has the dubious distinction of being accused of fraud by two anonymous short-sellers in just one week. Our analysis of its financials raises concerns that something is amiss: (i) Operating margins are…
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SPECULATIVE INVESTMENTS

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It appears contradictory that Asia’s most leveraged corporate sectors, India and China, also have the highest incidence of companies likely to be window dressing their short-term investments. The removal of dubious assets prior to reporting periods may be a way…
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IN BRIEF: ZTO (ZTO US)

Damaged Goods

China has a fragmented and commoditised parcel delivery industry which is dominated by goods purchased on Alibaba’s (BABA US) platforms. This is ZTO’s key business which currently reports world-beating margins and returns on capital. Alibaba’s acquisition of an increased stake…
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HOT AIR

Aircraft

Airline investing is all about the earnings outlook. Unfortunately for investors, the sector is particularly prone to profit manipulation due to the treatment of leased aircraft, differing depreciation rates, hidden maintenance costs and selective presentation of one-off gains and recurring…
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NEWSLETTER 16: SINOPHARM (1099 HK)

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Sinopharm has misrepresented its cash flow statement and aggressively window dressed its balance sheet. The company appears to have persuaded its auditors, PwC and then EY, to reclassify some working capital items as financing activities, thereby substantially inflating operating and…
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CAR (699 HK)

CAR

All that stands between CAR and a disorderly liquidation of its shareholder base is a share buyback scheme which it can ill-afford. Since we wrote our in-depth SELL report in March 2016, CAR’s performance has been dire: Its largest customer…
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