Analyst Has Concerns About Rino Intl (RINO) Management, Accounting

According to Street Insider, analyst Adele Mao at OLP Global said the RINO International (RINO) Q4 earnings call presented a few conflicting points that don’t make sense.  Here are the comments:

“We came away with more questions than answers: 1) how much BOT contract from Shougang Jingtang was included in the reported backlog of $89.4 million, and how should revenue be recognized? 2) Why was SG&A expense unusually low at $2.8 million in 4Q09 vs. $6.6 million in the prior quarter? 3) With utility expenses accounting for 75% revenue for the operating portion of BOT, how can GM on operating contract be 45%, as indicated by management on the call? At the macro level, we continue to believe that RINO’s business will benefit from China’s commitment to reducing industrial pollution. However, we are increasingly concerned about RINO’s internal control and corporate governance, including revenue recognition practice and expense reconciliation.”

Shares of RINO continue to drift lower today but there is still decent support all the way down to 20. 

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