Sino Grandness

(17-08-2015, 02:31 AM)BlueDogMeow Wrote: Exactly. SinoG price is just the bloodless verdict of the market.

That make me to recall a quote, "the stock market behaves like a voting machine, but in the long term it acts like a weighing machine".

Will a shorter term voting machine, sufficient for a verdict? Or a longer term weighing machine is a better one? I am more inclined to use the latter.

Having said so, I belong to the skeptical group, but I keep reminding myself, benefit of doubt applies here too. It is perfectly OK, to become more skeptical with increasing pessimistic view, but should not jump into a conclusion to a final "verdict", at least not now.

Regards
CF

(17-08-2015, 09:28 AM)BlueDogMeow Wrote: Sales divided by total capital? What I am saying is capital is growing at a much faster pace than sales.

(17-08-2015, 09:26 AM)Oldman9 Wrote: Hi Bluedogmeow,

Quoting your post "SinoG sales to capital ratio has been steadily declining for a long time. It was 1.00 in Q4 2011. it is 0.7 now. Might not seem like much...but it is, especially when you are talking about a high growth business like SinoG. "

Can you explain how did you get the ratio of 1 in 4Q 11 and 0.7 in 2Q 15?
4Q 11 sales were RMB 285m, and 2Q 15 sales were RMB 925m.

thanks
Oldman9

Hi Bluedogmeow,

thanks for the reply but I still could not get it. Could you help me on what basis you derive 1.00 for Q42011 and 0.7 for 2Q2015, since you have provided the figures surely you can do better in your response?

thanks
oldman9

capital can be calculated via the operating approach or the financing approach, both will yield similar results. it is calculated like this: non-cash current assets + non-interest bearing current liabilities + net pp&e + net non-goodwill intangibles + other long term assets. The idea is to estimate the value of the assets needed to run the business. A declining sales to capital ratio usually signify the company is getting more and more capital intensive. A consistently declining sales to capital ratio is ever worst as it means margin sales to capital ratio is much lower represented.

(17-08-2015, 10:03 AM)BlueDogMeow Wrote: capital can be calculated via the operating approach or the financing approach, both will yield similar results. it is calculated like this: non-cash current assets + non-interest bearing current liabilities + net pp&e + net non-goodwill intangibles + other long term assets. The idea is to estimate the value of the assets needed to run the business. A declining sales to capital ratio usually signify the company is getting more and more capital intensive. A consistently declining sales to capital ratio is ever worst as it means margin sales to capital ratio is much lower represented.

Hi

Thanks but can you show us the calculation please? Sorry Oldman not very good and not as smart as you are.. Would be good if you show us how get those figures. Thanks

Oldman9

Travelling at the moment, will do so when I get to a proper location.

(17-08-2015, 10:14 AM)Oldman9 Wrote:

(17-08-2015, 10:03 AM)BlueDogMeow Wrote: capital can be calculated via the operating approach or the financing approach, both will yield similar results. it is calculated like this: non-cash current assets + non-interest bearing current liabilities + net pp&e + net non-goodwill intangibles + other long term assets. The idea is to estimate the value of the assets needed to run the business. A declining sales to capital ratio usually signify the company is getting more and more capital intensive. A consistently declining sales to capital ratio is ever worst as it means margin sales to capital ratio is much lower represented.

Hi

Thanks but can you show us the calculation please? Sorry Oldman not very good and not as smart as you are.. Would be good if you show us how get those figures. Thanks

Oldman9

Hi Moderator,

I have asked twice how Bluedogmeow arrived at the ratio of in 4Q 11 and in 2Q 15.

It is quite clear that he has no intention to do so and not going to reply to my third request.

Do you think a forummer can provide figures to make an important point without explaining how the figures were arrived at?

Cheers
oldman9

(17-08-2015, 10:59 AM)Oldman9 Wrote: Hi Moderator,

I have asked twice how Bluedogmeow arrived at the ratio of in 4Q 11 and in 2Q 15.

It is quite clear that he has no intention to do so and not going to reply to my third request.

Do you think a forummer can provide figures to make an important point without explaining how the figures were arrived at?

Cheers
oldman9

An answer was provided by Bluedogmeow in previous post. He will answer it in due course.

Regards
Moderator

https://www.dropbox.com/s/6l9t8ckpsjhn1v...o.PNG?dl=0
https://www.dropbox.com/s/ycv1o7yiwti9si...h.PNG?dl=0

Seems like I made a slight mistake. I calculated the previous number on my phone using quarterly date multiple by 4, I should have used a LTM rolling revenue. Either ways, the trend is the same. I would like to point out that spikes in sales to capital ratio from Q2 2013 to Q1 2014 and from Q4 2014 to Q1 2015 coincide with equity capital raises. Again, it is obvious what is going on.

https://www.dropbox.com/s/583ymkso7bw7tk...l.PNG?dl=0

Now, adjusted for the cycle, here is the marginal sales to capital ratio. A marginal sales to capital ratio is more relevant in a trending sales to capital ratio as that implies each incremental capital adds less and less to the revenue line.

I think it's important to find out what exactly the trade and other receivables are as they have different risk profiles. Especially since it went up significantly, no harm trying to find out what exactly is it rather than assuming it's trade related.

Shifting of trade to other receivables would have been too easy to spot by TTA and CB holders.

(16-08-2015, 08:09 PM)weijian Wrote:

(14-08-2015, 10:59 AM)BlueDogMeow Wrote: Regardless, I don't know why some people here are so concerned about me giving my opinions on this company. If you are truly in it for the long run, me "bashing" this company is good for you as you will be able to buy this company at a great discount to intrinsic value.

BDM's comments are not going to move the market (Let's face it - He is not 1 of the big boys). This brings to the conundrum as to why are long-vested parties so agitated to his comments? Rationally speaking, there shouldn't be any need to react or put much inputs to his comments, even if they conflict with one's own belief systems. My guess is that SFI investors are superbly adverse to suffering from cognitive dissonance. But then again, isn't that what happened to either a certain Michael Burry when his CDS buying was about to reap a profit soon or the clueless investor who insists of putting in more good money after bad into that 12% annual return ostrich farm?

I find the debate between Trade receivables vs other receivables pretty futile. The prudent investor should consider both sets of receivables as a sum into his calculations/consideration. It is well known how accounting shenigans can take advantage and flirt on the edge of accounting rules (and stay perfectly legal), and the best the average retail guy (who is the outsider) should do to protect their own hard earned $, is to stay open and sceptical. It also doesn't harm if one has a temperament to receive pot shots, suffer from cognitive dissonance and truly internalise that the Market is a weighing machine in the long term.