Short seller tar­gets AAC

New Straits Times - - Business -

HONG KONG/NEW YORK: Shares of AAC Tech­nolo­gies Hold­ings Inc sank in Hong Kong af­ter short seller Gotham City Re­search ques­tioned the Ap­ple Inc sup­plier’s ac­count­ing.

The stock dropped 11 per cent to HK$98.70 (RM55.15) at the mid­day trad­ing break, head­ing for its big­gest re­treat since 2010.

Gotham, founded by New York­based Daniel Yu, ques­tioned AAC’s profit mar­gins and al­leged that the com­pany en­gaged in undis­closed trans­ac­tions with re­lated par­ties that weren’t listed in Ap­ple’s sup­plier list.

“We’re in­trigued by it be­cause its mar­gins are higher, smoother than some of the best com­pa­nies in the world,” said Yu.

Some an­a­lysts ques­tioned Gotham’s con­clu­sions.

BOC In­ter­na­tional Hold­ings Ltd’s Tony Zhang, who has a “buy” rat­ing on the stock, called the re­port “ground­less” and said many Ap­ple sup­pli­ers en­joyed high profit mar­gins. His cri­tique was echoed by San­ford C. Bern­stein & Co’s David Dai. “There is no hard ev­i­dence there, only spec­u­la­tion.”

AAC is sched­uled to re­port re­sults for the three months ended March to­day. Bloomberg

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