Photographer: Ian Waldie/Bloomberg

Angry CFO Ejects Macquarie Analyst at PAX Earnings Briefing

Updated on
  • PAX’s Chris Lee says analyst Timothy Lam wasn’t invited
  • Nomura says dispute may hurt company’s shareholder value

An earnings briefing in Hong Kong turned heated when the chief financial officer refused to continue with his presentation until an analyst from Macquarie Group Ltd. left the room.

In a video obtained by Bloomberg News, PAX Global Technology Ltd. CFO Chris Lee can be seen standing over a seated Timothy Lam and ordering him to leave the conference room on Wednesday. Lam initiated coverage on PAX Global’s stock in April with an underweight rating, making him the only analyst out of 17 tracked by Bloomberg to have a bearish recommendation at the time. On Thursday, Lee said he regretted his behavior, which was a "one-off" that didn’t reflect the management’s position and he welcomes "diverse points of view," according to an e-mailed statement.

The analyst was asked to leave because PAX Global disputes parts of his report, not because of the rating, Lee said by phone on Wednesday. Lam wasn’t invited to the briefing, Lee said. Macquarie spokeswoman Ida Cheung declined to comment. All analysts should be able to attend the briefing, regardless of their view on the company, Macquarie’s Lam wrote in a note, in which he maintained his underweight rating and raised his target price by 10 H.K. cents.

Raises Questions

"If someone with that temperament is leading up the finance department, which is arguably one of the most important, perhaps it raises questions how that department is run," said Ryan Roberts, a Hong Kong-based analyst at MCM Partners, who attended the briefing.

Nomura Holdings Inc. cut its rating on Hong Kong-based PAX Global, which makes point-of-sale payment systems, in a report that was titled "CFO conduct disrupts shareholder value." Shares in the company dropped 2.1 percent at the close, their biggest loss in a month, after rallying 5.6 percent the previous day.

"Before the analysts briefing meeting started, the company’s CFO asked a sell-side analyst to leave the conference room," Nomura analysts led by Leping Huang wrote in the note. "While we do not judge this dispute, we think this may hurt PAX Global’s shareholder value."

Short Interest

Nomura lowered its recommendation on the stock to reduce from neutral, citing concerns that the company’s Chinese market faced increased uncertainty due the central bank’s policy of renewing all third-party payment service providers in the second half of this year.

PAX Global reported on Tuesday its first-half net income climbed to HK$310.6 million ($40 million) from HK$309 million a year earlier. Among the 19 analyst recommendations currently tracked by Bloomberg, 15 have a buy rating, two have neutral, while Macquarie and Nomura have bearish ratings. Lam’s 12-month target price implies a 5.6 percent drop for the stock from Wednesday’s close.

Investors have boosted bets against the company. Short interest in the stock climbed to a record 10.3 percent of its outstanding shares on Aug. 3, up from 1.6 percent a year ago, according to data compiled by IHS Markit Ltd. and Bloomberg.