I've looked at Lenovo and analyzed the numbers as far as I can. am thinking of buying 25,000 shares from Lenovo. Anyone have an opinion on this?

I have not looked at their financial so no financial comments from me but I will say that their Legion 5 and 7 series laptops look like pack leaders to me.

Id want to understand what lead to the significant 61% increase in their stock since pre covid so I could understand if its warranted or if its just trending in the same direction as the market and has a higher beta (although with its P/E i suspect its a close to 1:1 beta).

I don't trust accounting practices in China enough to hedge bets on the validity of a single company's financial statements, and I trust their auditing practices even less. For this reason I do not invest in individual Chinese companies and stick to a China ETF

Look up Luckin Coffee or just ask Bazi about it

What numbers did you analyze? What percent of your portfolio would that become? Why do you think this would be a good investment in the long run?

(610k in one company is a pretty big individual investment)

Bro lmao

While I don't know what the audit Chinese standards are, I will say that auditing in the western world is also a complete joke. A significant portion of the grunt work is carried out by articling students while the planning and completion is a roll forward of previous years working papers. Variance analysis is typically poor and a parroting of whatever the Controller told them without considering if it makes sense in the big picture.

At the end of the day "the auditors" as people often refer to them are just people who want to go home after work, if the Controller or Director of Finance or CFO provides what they want to hear its a wrap, get through some checklists blindingly fast and move on the next client in an endless cycle of eventually performing the same assurance engagements year over year.

Going from a Senior Manager that was on the Partner track and deciding to go private into industry you really get to see how big of a joke it is. I manage a group of 25 related companies and I could tell these people anything as long as I string it into even a mediocre story.

Practice inspections, internal practice inspections your QAM, its all a joke if were being honest.

Auditing is never going to be perfect, but I expect Plc's with one of the big 4 to have pretty accurate financial statements. Some of the stuff they get away with in China and emerging markets you'd never get away with in the West

Well see what all the various AI auditing platforms bring to the table. Early programs like Mind Bridge might change things. I mean here in Canada you could always just pump in accruals every quarter to have expenses round down and revenues round up on the FS and get away with it. Auditors wouldn't blink an eye, and it was clearly a material misstatement when your FS are listed in millions. That's big 4 for you. Just dumb students out of university who have zero ability to see beyond the one working paper they are completing. Reviewers are just as guilty, queries all over completely irrelevant items and missing all the high level issues. Its just average smucks , I don't have confidence that FS are not manipulated but its just the baseline we have.

For the most part i'd say most talented individuals move away from public practice. It underpays and offers little challenge unless you go a tax reorg route, or you enjoy the personal tax and small businesses, theres a lot of personal interaction there that I think is enjoyable.

You're likely totally correct though that the China baseline is lower than our IFRS and FASB baseline.

This post was edited by SBD on May 19 2021 11:09am

To late to edit but I should have said "lower than our IFRS and FASB baseline in combination with our respective auditing standards, be it CAS, GAAS or other".

Balance sheet and cash flow statement look solid. I've noticed the stock has doubled since pre-covid with only 10% YOY revenue growth. Did see a stagnation for a couple years in 2018+2019. It appears continued revenue growth is being priced into this stock. If its revenue stagnates as a result of the reopening, the stock price may tank some. Keep in mind, this stock was a $12-15 stock when it was posting $50B revenue. It's TTM is $55B right now. I don't know much about the company other than that they make laptops; this is just an analysis strictly off the balance sheet and previous price action.