Lenovo (992 HK) Sell. *Catalyst* Pending Equity Dilution. 51% Downside

Sell Lenovo (992 HK): No Turnaround in Sight - Cashless Profits Don't Count

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Sell Lenovo (992 HK): Drowning In Debt. Don't Wait for the Rescue

Lenovo HY2018 Results: The Water Is Still Rising

Lenovo's 2Q Result Beat Consensus and Our Forecasts; Will to Acquire 51% of Fujitsu's PC Business

Director | Exposing Creative Accounting, Bucephalus Research Partnership

Robert Medd

Director | Exposing Creative Accounting

Exposing Creative Accounting

Bucephalus Research Partnership

Bucephalus Research Partnership Limited. Exposing Creative Accounting.

At the Bucephalus Research Partnership (BRP) we analyse financial statements using our accountant's practical experience and our own quantitative algorithms for corporate governance, accounting risk and peer performance.

Our thematic research refines our unique algorithms while our single stock research focuses on examples where we discover a significant gap between published accounts and business reality.

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Forensic Accounting

Any hopes of recovery raised by the modest increase in the 4Q report are dashed by closer examination.The increase in revenue was dwarfed by growing inventory and receivables. Margins are so low that profits could be wiped out by either a 4% inventory write-down or an 8% receivable write-off.Reported gross profits rose, but underlying cashflow is still falling. In 2018, operating cashflow failed to cover capex. Paying dividends merely added more leverage to an already strained balance sheet.…

Any hopes of recovery raised by the modest increase in the 4Q report are dashed by closer examination.The increase in revenue was dwarfed by growing inventory and receivables. Margins are so low that profits could be wiped out by either a 4% inventory write-down or an 8% receivable write-off.Reported gross profits rose, but underlying cashflow is still falling. In 2018, operating cashflow failed to cover capex. Paying dividends merely added more leverage to an already strained balance sheet.…

Lenovo: No Turn Around in Sight. The Risk of Failure Is Too High - Fair Value HK$2.87 (31)%, SELL