BLACK CHINA BLOG

1
March

Second analyst hits Hongqiao financials

By: Paul Adkins | Comments: 0 | Category: Aluminium

Just 4 months after an anonymous website accused China Hongqiao of fraudulent numbers in their financial reporting, a company called Emerson Analytics has taken a sword to Hongqiao’s books.

The Emerson report was published yesterday, and labels Hongqiao as a “strong sell”.  According to Emerson, the true value of Hongqiao’s shares is some 60% lower than where the price has been recently.

Hongqiao’s shares fell 8% this morning before being suspended by the Hong Kong stock exchange.

Hongqiao had also been named in a report by the South China Morning Post in relation to an order to close smelting capacity as a result of environmental inspections.

Hongqiao responded to the SCMP story by saying it was over-blown and that there was no need to close capacity.   They responded to the anonymous website by published a detailed rebuttal.  The anonymous website lacked credibility because it was anonymous, but this report is by a company well-known for shorting equities. It will be interesting to see how Hongqiao respond to this latest round of allegations.  Same for the Hong Kong stock exchange, who also come in for a caning from Emerson, in their 46-page report.

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