Shares & Derivatives
Hongguo FY08 financial result review
By Alen  •  March 4, 2009
Hongguo just release the FY08 financial result. Let's look at whether the consumer spending is slowing down and what are the challenges ahead. All amount in RMB ,000 Revenue + 19.6% Cost of sales +21.9% Selling and distribution expense +35.6% Loss in joint venture +595% (6,247) Profit of the year -3.39% Cash and equivalent 115,376 FD 24,793 Inventories 343,805 (quite a lot) Amount repayable in a year 65,801 (cash on hand should be able to service this) Profit before income tax 126,099 (Cashflow quite flat) Operating cashflow before working capital 156,575 Net cash from operating activities 33,589 (less than last FY) Cash after adjust investing and financing 115,376 EPS 26.82 RMB cts (a drop compare to last year 27.76) The revenue continue to grow, as the group open more store. However, the cost is running ahead of the sales. Gross profit margin drop from 40.6% to 39.4%, reverse the past year trend. The reality bites now, as consumer cut back spending, and more promotion activities is being carried out. If not the JV loss, the group might post slight profit growth. Quarter 4 figure got hit after more tax provision is provided. Cashflow wise, the group is generating enough cash for the debt repayment, this should not be a cause of concern. Read more...
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By Alen
Alen started investing in Singapore market since 2003. He adopt a fundamental driven, small cap bias investment style and believe using stock as a tool to build long term wealth. Constantly searching for multi-bagger.
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