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Silver Point

Thomas J. Monaco

Independent Insight Provider

Silver Point is a boutique research firm that focuses on the broader financial services sector, with a particular focus on troubled institutions globally. 

Asia Ex Japan

Equity Bottom-Up

*SEC Settlement: On December 16, 2020, the Securities and Exchange Commission (SEC) announced that Luckin Coffee had agreed to pay USD 180 mn to settle regulatory claims that it made its growth metrics appear more robust to meet earnings targets and achieve a better IPO valuation. As per usual when these cases are settled, Luckin Coffee neither admitted nor denied the SEC’s claim of fraud; and*Will CAR Crash Next?: In addition to the common ownership of Luckin Coffee and CAR, Inc. (699.HK), and common former senior company officer problem, we also note that Ernst &amp; Young in mainland China audits both Luckin Coffee and CAR, Inc. That in and of itself does not suggest there is a problem, but the commonality does raise eyebrows. While we are not suggesting that there is a problem with CAR Inc., there are areas where we see where the investment community could challenge CAR Inc. and seek a re-audit for CAR between 2008-18.

*SEC Settlement: On December 16, 2020, the Securities and Exchange Commission (SEC) announced that Luckin Coffee had agreed to pay USD 180 mn to settle regulatory claims that it made its growth metrics appear more robust to meet earnings targets and achieve a better IPO valuation. As per usual when these cases are settled, Luckin Coffee neither admitted nor denied the SEC’s claim of fraud; and*Will CAR Crash Next?: In addition to the common ownership of Luckin Coffee and CAR, Inc. (699.HK), and common former senior company officer problem, we also note that Ernst &amp; Young in mainland China audits both Luckin Coffee and CAR, Inc. That in and of itself does not suggest there is a problem, but the commonality does raise eyebrows. While we are not suggesting that there is a problem with CAR Inc., there are areas where we see where the investment community could challenge CAR Inc. and seek a re-audit for CAR between 2008-18. 

Luckin Coffee

Luckin Coffee – Bad Luckin