HNA - Holding No Assets
There are two ways to take HNA's current state of dismal receivership:
1. as a reason to reinforce the simple man's risk-off China stance, or2. as confirmation to do some semi-robust DD before buying shares in a company.
We recommend the second, especially as there is a corral from Hong Kong to Harbin of colts growing into unicorns.
"The signs of malfeasance were evident right in the shareholder structure," says Jimmie Jeremejev, referring to irregularities, such as a union that had no discernible connections to HNA employees holding major stakes, as did a shadowy U.S. registered "charity".
Having open eyes on the ground is a plus. LehmanBush water-cooler chatter about Luckin's 2-for-1 chicken wing deals was trending a financial quarter before the erstwhile Starbuck-beaters started admitting to trouble.
"We can take HNA's insolvency as a sign that anything can and will happen in China," says Edward Lehman."However, it also shows the signs are getting easier to read, and the remedies more effective.