Equity Analyst, LightStream Research

Oshadhi Kumarasiri

An equity research analyst with over 7 years of experience in multiple sectors. Previously worked for one of the world's largest asset managers with about USD2.5trn in AUM, covering small and micro-cap companies in the consumer sphere across Europe and developed Asia. Also experienced in covering multiple industries including banking, insurance and asset management, retail, tech, telco and REIT.

Equity Analyst

Huazhu Group Secondary Listing: Consensus Ignores COVID Even as The Business Goes Asset-Heavy

Long-Short Analysis on Japan, Asia and the World

LightStream Research

LightStream conducts quantitatively rigorous and data-driven analysis with a focus on Japan and Asia.

We consistently cover the Tech, Consumer and Industrial sectors, and provide ECM and Events coverage more broadly.

We supplement traditional qualitative insights from company relationships with a robust quantitative foundation that examines as much historical data as is available.
We further refine the accuracy of our insights and calls through the use of alternative data to flesh out current trends, and through a valuation framework that emphasises non-superficial peer group selection and a proper attempt to understand the metrics and changes that have driven security valuations in the past.

Equity Capital Markets

Texas-based short seller <a target="_blank">Bonitas </a>Research accused <a href="https://www.smartkarma.com/entities/huazhu-group-ltd" target="_blank" data-smartkarma-citation="entities:17527:1" rel="noopener">Huazhu Group (HTHT US)</a>, the second-largest hotel chain in China and the ninth largest in the world, of lying about the ownership of its hotel portfolio to produce fake financials.Bonitas made the accusation yesterday, (21st Sept 2020) a day prior to the commencement of trading of the secondary shares on the Hong Kong stock exchange.The accusation came in the form of a 32 page <a href="https://www.bonitasresearch.com/wp-content/uploads/dlm_uploads/2020/09/BonitasResearch-Short-Huazhu-Nasdaq_HTHT-HKEX_1179-September_21_2020.pdf" target="_blank" rel="noopener">report</a> published on the Bonitas website, which highlighted the following concerns;<ul>
<li>The company secretly provided for the operating costs of franchisee hotels owned by undisclosed current Huazhu employees &amp; other undisclosed related parties.</li>
<li>Understated the number of <a target="_blank">leased and owned hotels and overstated manachised &amp; franchised hotels</a>
</li>
<li>Understated the employee count by a minimum of 16%.</li>
<li>Inflated profits by RMB 2.0 billion ($300m) through classifying operating expenses as Capex.</li>
</ul>

Texas-based short seller Bonitas Research accused Huazhu Group (HTHT US), the second-largest hotel chain in China and the ninth largest in the world, of lying about the ownership of its hotel portfolio to produce fake financials.Bonitas made the accusation yesterday, (21st Sept 2020) a day prior to the commencement of trading of the secondary shares on the Hong Kong stock exchange.The accusation came in the form of a 32 page report published on the Bonitas website, which highlighted the following concerns;
The company secretly provided for the operating costs of franchisee hotels owned by undisclosed current Huazhu employees &amp; other undisclosed related parties.
Understated the number of leased and owned hotels and overstated manachised &amp; franchised hotels

Understated the employee count by a minimum of 16%.
Inflated profits by RMB 2.0 billion ($300m) through classifying operating expenses as Capex.


Huazhu Group: Damning Allegations by Short Seller Bonitas