* Q3 profit halves, revenue down 17 pct
* Cuts 2010 revenue view to $203-$211 mln
* Concerns over financial statement weigh
* Canaccord Genuity cuts stock to sell
* Shares slump to lowest in over a year (Rewrites with analyst, company comment, updates shares)
By Aftab Ahmed
BANGALORE, Nov 15 (Reuters) - Chinese clean-technology company RINO International’s RINO.O shares fell 18 percent to their lowest in more than a year on weak results and continued concerns over its financial statements.
Monday’s losses extended the 30 percent slump in shares last week after a report by brokerage Muddy Waters alleged the company’s accounting “has serious flaws.” [ID:nSGE6AA0P2]
Muddy Waters’ allegations are difficult to dismiss and Rino’s real business could indeed be much smaller than the financial statements suggest, Canaccord Genuity analyst Michael Deng said, downgrading the stock to “sell.”
The analyst said his findings were in line with those of Muddy Waters, which claimed six of the nine customers disclosed by Rino denied hiring the company.
“We have serious doubts about the existence of some of the customer relationships claimed by Rino,” Deng said, adding that the Muddy Waters report could reflect the real revenue level of the company.
Accounting irregularities have also surfaced at Chinese solar firms, which make up the bulk of the sector. Disclosures are especially limited amongst these overseas firms.
The companies’ quarterly income statements and balance sheets are less detailed than the U.S. firms, and cashflow statements are only issued once a year as the U.S. Securities and Exchange Commission deems them as incorporated outside the country.
Rino, which provides clean technology products to China’s iron and steel industry, declined to comment on Canaccord’s report.
On Thursday, Rino said it “looks forward to providing investors with a timely and detailed response to the allegations upon completion of its internal review.”
In its report, Muddy Waters had said it has a short position in Rino stock and stands to realize significant gains from a stock fall.
Earlier on Monday, Rino said third-quarter profit halved, and slashed its full-year revenue outlook as it expects demand to drop. [ID:nWNAB2775]
Its shares were down 18 percent, or $2, at $9.01 Monday morning, and were among the top percentage losers. (Reporting by Aftab Ahmed in Bangalore; Editing by Vinu Pilakkott)