SES Imagotag (SESL): THE CIRCULAR DANCE WITH A CHINESE TWIRL – PART I
SUMMARY OF GOTHAM CITY RESEARCH’S OPINIONS AND SUPPORTING OBSERVATIONS
BOE is the largest shareholder, largest supplier, one of the largest customers, JV partner, and on the audit committee. Potential for financial malfeasance is high.
We believe SESL financial statements are materially misleading, incorrect, and deficient. An independent & comprehensive investigation would confirm our opinions.
We have identified accounting irregularities – explained both in this report and in Part II – that lead us to believe SESL’s financial statements will require restatement.
2020-2022 revenue are overstated by at least 7%-13% and 2022 EBITDA is overstated by 106%.
A November 2022 BOE filing, available only in Chinese, reveals that as of 30 Sep 2022 BOE’s balances facing SESL amounted to 71% of SESL’s accounts payable and 18% of its accounts receivable as of June 30, 2022. These related party payables & receivable are undisclosed by SESL.
The recently announced Walmart deal is not profitable for SESL, based on our per unit economic calculations. WMT is paying SESL EUR 5.30 per ESL, but SESL's cost per ESL is currently at least EUR 6.66 per ESL. "Everyday low price" is not good news for SESL.
SESL has not generate lasting cash flow since inception. Its 2022 Free cash flow -€48M, and its cumulative free cash flow from 2002-2022 is -€159M.
SESL would trade between EUR 15 – EUR 30/share, if shares were to trade simply in-line with peers.
Excellent forensic breakdown. Following the related-party trail through the Chinese subsidiary requires patience, and the way you lay out each step makes the circular structure far easier to follow. I keep a daily habit of testing my own read on stories like this with noillirk daily game and it is a good reminder of how often the crowd misses the accounting detail.
Uncovering hidden financial irregularities and tracing complex corporate networks requires a forensic eye. Sifting through layers of related-party transactions and misleading disclosures can feel just as daunting as trying to crack a deeply cryptic grid without an expert crossword solver to guide you through the maze.
The circular supply chain questions raised here are worth following closely. For anyone tracking vendor-side disclosures, trackdash.org keeps a running record of the filings discussed.
Really enjoyed your analysis on SES Imagotag’s performance and market strategies! It almost feels like navigating a complex five nights at freddy's game, with each twist revealing new layers of strategy. I'd love to hear more about how these developments could impact investor confidence in the long run!
Your perspective on this topic is both unique and enlightening. This piece provides a fresh and compelling take on the subject. happy wheels