Report claims knock WiseTech shares lower

Beijing-based J Capital Research claims profit has been overstated at the tech company in the three years since listing.

Richard White, CEO of WiseTech Global, launching the company on the stock exchange. Picture: James Croucher

WiseTech Global shares have lost more than 13 per cent after the release of a scathing short-seller report claiming the group has allegedly overstated profits and growth.

Beijing-based research outfit J Capital Research on Thursday released a report estimating the firm has allegedly overstated profit by as much as 178 per cent in the past three years since listing.

“Using the company’s own numbers, we estimate WiseTech’s underlying, organic growth rate at 10 per cent, not the 25 per cent claimed. That means an estimated 80 per cent of the company’s top-line growth is from purchased revenue,” the report says.

Author of the report, and co-founder of the group, Anne Stevenson-Yang has been behind a number of short-sell reports focused on Chinese companies, but today took aim at the locally listed tech group saying it was allegedly shielding its subsidiaries from audit scrutiny.

Months of analysis

She alleged that the departure of Audit and Risk Management Committee chair Christine Holman earlier this week was a warning sign, after just 10 months in the role.

“The company has been cobbled together through hasty acquisitions,” Ms Stevenson-Yang claimed.

“Revenue grew at a 12.5 per cent compound annual growth rate (CAGR) in the six years before listing. After listing, revenue growth leapt to 40 per cent annually.

“We have spent months analysing the company,” Ms Stevenson-Yang said in the report.

WiseTech shares were priced at $3.35 at its IPO in April 2016, but since listing, growth has been by as much as 10-times to hit records as high as $38.80.

On Thursday, the price fell 13 per cent to $28.93, before trading in its shares was paused.