not vested
Lenovo: So Much Debt, CLSA U-Turns To Sell
By Shuli Ren
CLSA has stood by Lenovo (992.Hong Kong) in the past even as other sell-side analysts from Maybank to Morgan Stanley questioned the smartphone and PC maker’s operations. But analyst Nicolas Baratte threw in the towel today, downgrading this stock from Buy to Sell.
Baratte wrote:
This analyst has been horribly wrong on the stock, focusing on the turnaround of the mobile division, which is becoming in our opinion more difficult to unlikely as multiple strategic mistakes pile up…
Smartphone volume in China collapsed by -80% over two years due to two astonishing mistakes in our opinion:
(1) the wrong product mix in 2014- 2015 as demand migrated to 4G &
(2) wrong distribution channels in 2016 as Chinese telco subsidies again accelerate & end the migration to 4G.
That Lenovo is not selling smartphones well should not be news to this blog’s readers. What I find interesting in the report is that CLSA concluded investors are now terribly worried about Lenovo’s balance sheet.
Source: Barron's Asia
http://blogs.barrons.com/asiastocks/201 ... s-to-sell/