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

Fake Cash

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)

NewsletterFinal

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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IN BRIEF: SINOPHARM (1099 HK)

Disguise-report image

In July, we wrote a report on Sinopharm which alleged that the company was manufacturing operating cash flow by imaginatively reclassifying creditor repayments as a financing activity (an accounting first) and by selling an ever-greater quantity of receivables. Adjust for…
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IN BRIEF: CHINA SHENGMU (1432 HK)

GamingTheNumbers

Is every dairy company listed in Hong Kong dodgy? It certainly feels that way following scandals at Daqing and Huishan. We warned readers back in May that China Shengmu was likely to be next following a questionable FY16 audit report…
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SHORT SELLER’S SNAPSHOT

GamingTheNumbers

The seventh short seller’s report in Hong Kong this year has targeted social video platform operator, Tian Ge (Mkt Cap US$1bn). The report was written by anonymous short seller, Emerson Analytics, whose 100% success rate for its six previous reports…
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NEWSLETTER 15:

NewsletterFinal

It’s not just because Hong Kong allows short-selling that there are so many short-sellers’ reports, it’s because (by our estimates) Hong Kong is the corporate fraud capital of the world. A small but meaningful percentage of mainland companies seem predisposed…
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