Sino Grandness

FY3Q2014
http://infopub.sgx.com/FileOpen/Sino%20G...eID=324722


3Q2014 Revenue $1.022b
3Q2014 Trade and Other Receivables $1.449b

Page 10 Review of Balance Sheet
As at 31 October 2014, all trade receivables above 90 days amounted to RMB32.3 million had been fully collected.

32m + 1022m = 1449m ?????

not vested......

(18-11-2014, 12:09 PM)Tiggerbee Wrote:

(18-11-2014, 11:31 AM)leeeta Wrote:

(18-11-2014, 10:45 AM)Wildreamz Wrote:

(18-11-2014, 12:09 AM)Arowana Wrote: Thank you very much kye_lin. I have sold all shares on the day after I attended the lunch meeting with CEO/CFO/ and IR-VP when they flew here to assure investor of Newsman9 report. I sold all share for 2 reasons:
The company can only assure investors with words. The only rebut Newsman9 report with their words and their numbers . Actually they can keep Newsman9 shut his mouth forever with photo/video/official document but they produce no such evident and have no plan to do so. I felt they have nothing to show.
Another reasons is not what were said but the body language. Not very scientific I must say and I might have wronged them. However as a business man for many years, my judgement from observing non verbal communication has been serving me very well all this while.
I am just sharing what I have gone thru and please don't let that affect your investment decision.
Just do what is right and comfortable for you.

Thank you for your valuable insight. I do not have the opportunity to attend the meeting. I wish I could make the same judgement as you.

@Cityfarmer

I have seen the report too, but I do not think it has much to contribute. The big elephant in the room is still the Trade and Other Receivables. From what I gather, trade receivables beyond 90 days has already been collected, so the bulk of the 1.4b receivables is actually "other receivables"? Not sure what to make of it, but I don't like what I see.

I hv last Fridays briefing rpt in PDF format..was told that I can't post in forums.if keen pm me with and I will whatapp you the file..let me hv ur hp number as well. Thx.

Why don't they post the rebuttal report in SGX portal? Doesn't make sense at all.

Believe they will..but dunno when.

(18-11-2014, 12:36 PM)Behappyalways Wrote: FY3Q2014
http://infopub.sgx.com/FileOpen/Sino%20G...eID=324722


3Q2014 Revenue $1.022b
3Q2014 Trade and Other Receivables $1.449b

Page 10 Review of Balance Sheet
As at 31 October 2014, all trade receivables above 90 days amounted to RMB32.3 million had been fully collected.

32m + 1022m = 1449m ?????

not vested......

Yes that statement is confusing as hell. Note that the latest balance sheet is dated till 30 Sept 14, so I am guessing that the 32m is not reflected in the balance sheet.

That said, let look at the numbers.

Assuming Trade Receivable Turnover >90days.

Which means Revenue for 3q14 + Spill Over Trade Receivables 2q14 = Trade Receivables 3q14
1022 + Spillover = 1163.2;
Spillover = 141.2m not 32m

What did I miss here?

@Behappyalways 1449 mRMB includes "Other Receivables" which has much higher turnover days than "Trade Receivables" apparently.
Other Receivables 3q14 = 286 mRMB from my calculation.

Results announcement contains an explanatory note on trade and other receivables.

As at 30 Sep 14, trade receivables were RMB 1,163m and other receivables RMB 286m.

Note 12 of annual report shows that as at 31 Dec 2013, Government owed Sino Grandness RMB 69.2m in value added tax and RMB 51.4m in export tax refunds.

Note 18 shows that Sino owed Government a mere RMB 8.7m in VAT as at 31 Dec 13.

VAT is very much like GST. It is levied on sale of goods and service at 17%.

Sino charges its customer the sale value plus 17%. The sale value is recognised as revenue and the 17% VAT belongs to government.

Before the customer pays up, the entire sum appears as trade receivable.

When Sino buys, it pays the the vendor the purchase price plus 17%. Sino can get the 17% back from Government, later; and in the meantime, the 17% appears as VAT receivable.

The RMB 69.2m VAT receivables and RMB 51.4m export tax refunds as at 31 Dec 13 suggest that Sino’s scale of business is not inconsiderable.

Those at the results briefing were told the following:

Of the RMB 1,163m trade receivables at 30 Sep 14,

33% was less than 30 days,
31% between 31 and 60 days,
33% between 61 and 90 days,
and the remaining 3% (RMB 32.3m) exceeded the 90-day credit limit.

The entire RMB 32.3m was collected in October.

@portuser

Very informative and helpful for analysis, thank you.

This might be a noob question, but may I know how to get invited for the briefing?

(18-11-2014, 01:41 PM)portuser Wrote: Results announcement contains an explanatory note on trade and other receivables.

As at 30 Sep 14, trade receivables were RMB 1,163m and other receivables RMB 286m.

Note 12 of annual report shows that as at 31 Dec 2013, Government owed Sino Grandness RMB 69.2m in value added tax and RMB 51.4m in export tax refunds.

Note 18 shows that Sino owed Government a mere RMB 8.7m in VAT as at 31 Dec 13.

VAT is very much like GST. It is levied on sale of goods and service at 17%.

Sino charges its customer the sale value plus 17%. The sale value is recognised as revenue and the 17% VAT belongs to government.

Before the customer pays up, the entire sum appears as trade receivable.

When Sino buys, it pays the the vendor the purchase price plus 17%. Sino can get the 17% back from Government, later; and in the meantime, the 17% appears as VAT receivable.

The RMB 69.2m VAT receivables and RMB 51.4m export tax refunds as at 31 Dec 13 suggest that Sino’s scale of business is not inconsiderable.

I don't quite understand the VAT position. Wld appreciate it if you could explain it.

If their VAT works very much like our GST with input tax on purchases accruing to the company and output tax on sales accruing to the Government, then wouldn't it be more likely that a company owes more to the Government than the Government to that company?

Thank you.

(18-11-2014, 05:25 PM)budgetier Wrote:

(18-11-2014, 01:41 PM)portuser Wrote: ..........
Note 12 of annual report shows that as at 31 Dec 2013, Government owed Sino Grandness RMB 69.2m in value added tax and RMB 51.4m in export tax refunds.

Note 18 shows that Sino owed Government a mere RMB 8.7m in VAT as at 31 Dec 13.

..........

I don't quite understand the VAT position. Wld appreciate it if you could explain it.

If their VAT works very much like our GST with input tax on purchases accruing to the company and output tax on sales accruing to the Government, then wouldn't it be more likely that a company owes more to the Government than the Government to that company?

Thank you.

An operating company owes the local tax authority the difference between the output VAT collected on sale of products and the input VAT it pays for goods and services.

Sino Grandness has several subsidiaries in various part of China. The subsidiary in Hubei was not in operations last year. When the Hubei factory was being built, the subsidiary paid the construction costs plus input VAT. The input VAT that is with the local tax department has remained as VAT receivable in Sino’s accounts and can be used to offset the output VAT on products sold by the Hubei subsidiary in the future.

This unusual situation of government owing Sino VAT instead of the other way round is temporary.

It seems Newman9 did not study Sino’s balance sheet to notice the glaring abnormality, else it would have concluded that Sino has not been able to sell enough products to generate sufficient output VAT to offset the input VAT.

(18-11-2014, 11:37 PM)portuser Wrote:

(18-11-2014, 05:25 PM)budgetier Wrote:

(18-11-2014, 01:41 PM)portuser Wrote: ..........
Note 12 of annual report shows that as at 31 Dec 2013, Government owed Sino Grandness RMB 69.2m in value added tax and RMB 51.4m in export tax refunds.

Note 18 shows that Sino owed Government a mere RMB 8.7m in VAT as at 31 Dec 13.

..........

I don't quite understand the VAT position. Wld appreciate it if you could explain it.

If their VAT works very much like our GST with input tax on purchases accruing to the company and output tax on sales accruing to the Government, then wouldn't it be more likely that a company owes more to the Government than the Government to that company?

Thank you.

An operating company owes the local tax authority the difference between the output VAT collected on sale of products and the input VAT it pays for goods and services.

Sino Grandness has several subsidiaries in various part of China. The subsidiary in Hubei was not in operations last year. When the Hubei factory was being built, the subsidiary paid the construction costs plus input VAT. The input VAT that is with the local tax department has remained as VAT receivable in Sino’s accounts and can be used to offset the output VAT on products sold by the Hubei subsidiary in the future.

This unusual situation of government owing Sino VAT instead of the other way round is temporary.

It seems Newman9 did not study Sino’s balance sheet to notice the glaring abnormality, else it would have concluded that Sino has not been able to sell enough products to generate sufficient output VAT to offset the input VAT.

Thank you very much for highlighting that trade receivables included 17% VAT that will be handed over to Government later.

As 3Q trade receivables of RMB 1,163m were inclusive of 17% VAT, the net amount belonging to Sino Grandness would then be RMB 994m. This would be lower than 3Q sales of RMB 1,022m.

By the way, why did Sino owe so little (RMB 8.7m) to Government at the end of 2013 since its annual sales were RMB 2,261m?

In addition just want to understand if I am reading it right: Capex also can claim VAT? I always thought it is only for sale of goods and services ie transaction related.

"When the Hubei factory was being built, the subsidiary paid the construction costs plus input VAT. The input VAT that is with the local tax department has remained as VAT receivable in Sino’s accounts and can be used to offset the output VAT on products sold by the Hubei subsidiary in the future"