Thursday, April 29, 2010

Investment Homework - Sealink

Sealink Reading 2009

0.33 billion market cap , but only able to do 0.299 billion business. Buisness Capability is translate to 1 to 1

mp 0.67
eps 10.2
pe 6.69
share issue 500,000,000
revenue 192,777
PAR 0.50
NTA 0.856


Current Assets
TR 26403
Othr Receivable 67167
cash balance 49554
tax recover 1172


non current liabilities
long term borrowing 70156
payable 830
defer tax laibilities 48193


current liabilities
Short term borrowings 209,669
Trade payables 35,624
Provision for maintenance warranties 1,120
Due to customer on contracts 9,630
Other payables 46,068
Provision for taxation 5,710


receievable drop from FY 2009 26,403 to FY 2008 43,503

receivable turnover ratio = average tr / revenue x 365
= 118475 / 192,777 x 365
= 224days (not effiecient )
Debt
Long term borrowings increase 2009 70,156 2008 62,855
Short term borrowings increase 2009 209,669 2008 207,402

Trade payables 2009 35,624 2008 63,763
Other payables 2009 46,068 2008 36,250

debt per share 328,018/ 500,000 = 0.656 cents
cash per share 49554 / 500,000 =0.099
inventories 357316 / 500,000 = 0.71
(Its not manufacturing co , thus inventories doesnt translate to cash)

Trade receivables - Trades payables = (26403 + 67167) - ( 35624 + 46068 + 830)
= 11048
How much it worth per share = 0.022

Conclusion The problem with the company is that its trade recievable too high and collection too slow, it was about 220days,debt are too high ,thus it will have cash problem to operate. Not worth to buy as it was running on high debt model, collection are too slow, thus it will have cashflow problems moreover business operation is not effiecient, it owe a lots of debts which is 0.65cent for its share. It doesnt generate max return looking at the market cap , for 1 cent it generate 1 cent only. Definetely not a value investing stocks.

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