After excluding the "Proceeds
from disposal of property, plant and equipment", the actual operating
loss of Prolexus 2021 Q3 is actually so serious that you can hardly
imagine it.
Prolexus (8966) plunged as expected in 2021Q3. Profitability
disappeared? Do you still dare to hold it? Will Prolexus face the panic
selling?
Publish date:
Fri, 23 Jul 2021, 8:56 PM
Prolexus
started the fabric mask business during the pandemic, and its
performance has brought excellent performance in QR 2020-07, with a net
profit of 23.9million.
But
the good times did not last long. The next three quarters were not
satisfactory, and both revenue and profitability plummeted, especially
2021 Q3, profit margin drop into negative, and revenue just only RM
35,371,000 (Lowest revenue since Year 2009). Obviously, fabric mask
orders have been greatly reduced, and the profit margin of fabric masks
is no longer as high as the profit at the beginning due to the market
have a lot of high quality disposable mask now.
Prolexus’s
quarterly earnings report has been declining for 3 consecutive
quarters, and the Revenue of 2021 Q3 has even dropped to 35 million
only, shown negetive profit margin. Believe that the contribution of
fabric masks is almost gone after this quarter. Strongly believe that
the next quarterly earnings report will continue to decline, and
continue to cannibalize and consume the remaining cash flow.
Business data to focus on:
1.
2021 Q3-Apparel module drops to only RM 30,871,000. It proves that
Prolexus's apparel orders have been severely reduced, and the rumor has a
high probability of being eliminated by NIKE and Ascis. It means that
the upcoming quarterly orders and revenue are not very good either..
2.
The Intel-Segmeny Sales of Textile modules drop from RM18.567 million
to RM 0.382 milliom only, proving that Prolexus' orders for masks have
almost disappeared. (Related Sales fell to only 2%) The huge profits
have disappeared, and Prolexus' transformation plan has failed! It's
time to see the truth!!!
3.
Proceeds from disposal of property, plant and equipment - 11
million. During this severe epidemic, we can be sure that the price of
selling land is very unsatisfactory, just like you want to sell your
house now.
What important message does the choice of disposal of property, plant and equipment represent?
It's
means that your cash flow is not enough, and their need to sell assets
in exchange for cash flow. Because the main reason for the company's
bankruptcy is that there is a problem with the cash flow turnover!!!
