(Yicai Global) March 3 -- Grizzly Research’s report is without merit and contains numerous errors, unsupported speculations and misleading conclusions and interpretations, ZTO Express said in a filing to the Hong Kong bourse today after the US activist short-selling firm accused the Chinese courier company of cooking the books.

The financial data ZTO submitted to the US Securities and Exchange Commission was unreliable with exaggerated margins and other problems, indicating a potential to drag down its share price by at least 50 percent in the short to medium term, Grizzly said in a report published earlier today.

“It is our view that ZTO’s apparently superior margins are, in fact, just the result of its potentially falsified financial statements. We believe ZTO has underreported revenue and costs to engineer these standout results,” said Grizzly, which runs a team of team of analysts in the US and private investigators in China.

The report lacks a basic understanding of ZTO’s business model and financial reporting structure, and an absence of a thorough reading of the company’s public filings, said the Shanghai-based logistics firm, which is backed by e-commerce giant Alibaba Group Holding.

ZTO’s board of directors, including the audit committee, is reviewing the allegations and considering the appropriate course of action to take to safeguard the interests of all shareholders, it added.

The company will make additional disclosures in due course consistent with the requirements of the rules and regulations of the US Securities and Exchange Commission, the New York Stock Exchange, and the Hong Kong Stock Exchange, the firm said.

ZTO’s share price was little affected by the report. Its Hong Kong-traded stock [HKG:2057] closed up 1.2 percent at HKD193 (USD25) today, while in the US its share price [NYSE: ZTO] dipped 1.1 percent to finish at USD23.95 yesterday.

Editor: Kim Taylor