The accounting research firm, GMT Research

Lisa Mangkornkarn

The accounting research firm

GMT Research

GMT Research provides independent insight into markets, sectors and companies throughout Asia. Our unique method of mining a comprehensive collection of corporate financial statements for key data allows us to evaluate the financial health of a company, sectors and the market at large. We also investigate the application of accounting standards by companies and sectors, shedding light on the quality of reported profits. Armed with this information, we help investment professionals navigate the financial landscape.

China Greenland Broad Greenstt Grp Co / ESG

<div class="content-highlight"><p>The problem with companies recognising profits well ahead of payment is that you’re never really sure if the money’s going to turn up. Take <a href="https://www.smartkarma.com/entities/19299" target="_blank" data-smartkarma-citation="entities:19299:1">China Greenland Broad Greenstt Grp CoLtd (1253 HK)</a> (CGBG) for example. It looks like a no-brainer…Who wouldn’t want to invest in a company with 30% operating margins and profits forecast to quadruple over the next few years? But scratch below the surface and it gets murkier.</p><p>How can a gardening company generate such high margins which have somehow bucked industry trends? And it never seems to get paid. In fact, we estimate cash sales in 2016 to be 25% of reported sales. This is confirmed by the miniscule amount of cash tax paid. Also, backward engineering company issued profit guidance suggests numbers are unachievable under its current capital structure, requiring substantial quantities of new debt and equity. Add into this mix a worryingly level of pledged shares, evidence of possible share price manipulation and an incredibly high valuation.</p><p><em>Maybe this explains why the Chairman has recently halved his stake?</em></p></div>

The problem with companies recognising profits well ahead of payment is that you’re never really sure if the money’s going to turn up. Take China Greenland Broad Greenstt Grp CoLtd (1253 HK) (CGBG) for example. It looks like a no-brainer…Who wouldn’t want to invest in a company with 30% operating margins and profits forecast to quadruple over the next few years? But scratch below the surface and it gets murkier.How can a gardening company generate such high margins which have somehow bucked industry trends? And it never seems to get paid. In fact, we estimate cash sales in 2016 to be 25% of reported sales. This is confirmed by the miniscule amount of cash tax paid. Also, backward engineering company issued profit guidance suggests numbers are unachievable under its current capital structure, requiring substantial quantities of new debt and equity. Add into this mix a worryingly level of pledged shares, evidence of possible share price manipulation and an incredibly high valuation.Maybe this explains why the Chairman has recently halved his stake?

CHINA GREENLAND (1253 HK): How Bizarre, How Bizarre...

China

Shanghai Jielong Industry Corporation Limited is an investment holding company.  Through its subsidiaries, the Company provides color printing and packaging services, manufactures metal wires, operates in import and export trading, and develops real estate.

Yestar Healthcare Holdings Company Limited provides color photographic paper in the PRC and a provider of a broad range of imaging products in the PRC.  The Company processes color photographic paper, various image printing films and medical imaging films into ready-to-use form by cutting and slitting master rolls into customized sizes.

Misho Ecology Landscape Co Ltd is a ecological landscape planning and design company. The Company engages in reforestation and environmental remediation.

Shenzhen Ruihe Construction Decoration Company Limited is a full service construction company. The Company undertakes decorative works on hotel, office building, theater, subway and other public constructions, as well as renovation and construction projects on high-end residentials.

Shenzhen Ruihe Construction Decoration (002620 CH)

Shenzhen Selen Science & Technology Co.,Ltd. manufactures electronic functional materials. The Company produces and sells double-sided adhesive tape series, optical adhesive tape series, protective film series, functional adhesive tape series, and other products. Shenzhen Selen Science & Technology also produces precision mold, fiber products, and other products.

Shenzhen Wenke Landscape Co., Ltd. specializes in landscape design and construction as well as production and marketing of nursery stocks and bonsais.

Tianjin Motimo Membrane Technology Company Limited develops, manufactures and sells ultra and micro-filtration membranes and membrane modules. The Company's main products include various types of hollow fiber column style, curtain style ultra and micro-filtration membranes, and membrane modules.

Tianjin Motimo Membrane Technology (300334 CH)

Dongjiang Environmental Company Ltd. treats industrial and municipal waste and provides value-added support services. The Company markets copper sulfate, copper oxychloride, copper oxide, and copper to industrial customers throughout China and the Asia=Pacific region.

Datang Environment Industry Group Co., Ltd. provides environmental protection and energy conservation services. The Company offers its solutions to the the coal-fire power generation industry to help reduce the emission of pollutants and facilitate in meeting national standards in China.

Beijing Qianjing Landscape Co., Ltd. is an architecture company that engages in landscape design, landscaping projects, and landscape maintenance.

Beijing Qianjing Landscape Co (603778 CH)

CSS HOLDINGS, LTD. provides outsourced kitchen services to major hotels. The Company's stewards undertake tasks such as washing dishes and monitoring tableware inventory.  CSS HOLDINGS also provides consulting services in hotel and restaurant management.

YAMADA SERVICER SYNTHETIC OFFICE CO., LTD provides consulting services for real estate trade and debt collection.  The Company's service also includes real estate registry and surveying.

The Sailor Pen Co., Ltd. manufactures fountain pens, marking pens, ball-point pens, and mechanical pencils.  The Company also produces household electric appliances and focuses on robot manufacturing for a substantial portion of total sales.  The Sailor Pen has an overseas plant in Taiwan.

PT Multifiling Mitra Indonesia Tbk provides document management solutions. The Company offers all aspects of document management, starting from paper document sorting up to storing the information into the chosen media, such as paper, film, digital/electronic or others.

MITSUMURA PRINTING CO., LTD. provides offset and gravure printing service.  Main customers include Shiseido, Kodansha, and Mitsubishi Electric.  The Company also provides contractual printing for Yomiuri Shinbun newspaper and expands into liquid crystal display (LCD) related business.

New Universe International Group Limited is an investment holding company. The Company's principal activities include the environmental treatment of industrial and medical wastes, environmental plating sewage treatment services and the provision of facilities in an ecoplating specialised zone, and investments in plastic materials dyeing operations.

Globe Industries Corporation manufactures and markets adhesive tapes.  The Company's products include polyvinyl chloride (PVC) tapes and oriented polypropylene (OPP) tapes.

Magnus Concordia Group Limited operates printing business. The Company prints and sells art books, packaging boxes, children's books, and other related products. Magnus Concordia Group also offers property services, securities investment, and trading services.

Brilliant Circle Holdings International Ltd. is a package printing company in China.  The Company is principally engaged in the cigarette package printing business. In addition, it also provides book printing and other paper-related products as well as manufacturing of laminated paper. Brilliant also provides printing services to international publishers and multi-national corporations.

Koas Co., Ltd. markets and distributes wholesale office equipment.  The Company's wholesale items include office desks, chairs, cabinets, and panels.

China Greenland Broad Greenstate Group Company Limited provides landscape architecture services. The Company offers design and planning, design refinement, construction, seedling cultivation and maintenance services throughout China.

China Greenland Broad Greenstt Grp Co (1253 HK)

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CHINA GREENLAND (1253 HK): How Bizarre, How Bizarre...

The problem with companies recognising profits well ahead of payment is that you’re never really sure if the money’s going to turn up. Take China...

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