“JR” of Jehoshaphat Research makes the case that Techtronic Industries (669 HK) has engaged in a practice called “snowballing” to maintain margin growth that can be classified as none other than statistically impossible. To achieve this feat, the company has utilized a number of methods to hammer its expenses, inflate asset values, and ignore its own accounting policies. Whether it’s the capitalization of development costs, understating depreciation expenses, or inventory over-production; JR believes this tool manufacturer is at risk of a severe earnings correction in-line with its competitors who have already experienced an ugly inventory de-stocking cycle.