HHG Quarter Report Analysis 30.09.2015 (WARNING!!)
Part 1
Part 2
Looking for the latest quarter, Sept 2015. The quarter revenue was
dropped from RM26 million to RM18 million, which is a huge drop if
compare to last past few quarters.
Besides this, please be remind that this quarter have a one off gain of
RM2.4 million. If without this profit, the company is only making merely
RM0.4 million, which mean there is huge 90% drop in profit in this
quarter.
The management mentioned in their lastest quarter report that this is
due to uncertainty of China's operation environment and mitigate the
credit risk exposure by lowering the sales. This statement can be
supported by increasing of "Trade and Receivables" in the above picture
(Part 2).
This will put HHG in a risk that money is not able to collect back and
turn into bad debt, which subsequently affect the cash flow of the
company.
Now we look at the debt and cash level of the money.
Short Terms Borrowing RM16 million
Long Terms Borrowing RM10 million
Cash on Hand RM8 million
Financial Cost around RM 1.6 million per year.
Base on current share price RM0.62, which translate to PE 13 to PE14
The PE looks quiet high for a small company like this. It is very risky
to buy this stock at the moment as the chance of lost of money greater
than making money.
Lastly, the ROE of this company is less than 5%.
Buy at your own risk!
HHGROUP (0175) - HHGroup Quarter Report Analysis 30.09.2015 (WARNING!!)
http://hongwei85.blogspot.my/2015/12/hhg-quarter-report-analysis-30092015.html
KLSE:HHGROUP
