Sino Grandness

(11-01-2016, 01:26 AM)desmondxyz Wrote:

(10-01-2016, 11:35 PM)leeeta Wrote:

(10-01-2016, 07:14 PM)BlueKelah Wrote:

(10-01-2016, 05:18 PM)leeeta Wrote: Boon, you have stated "No doubt, working capital is simply a core part of a company’s operations, but when working capital runs in the negative for an extended period of time - since being listed in 2009 until now as in the case of SFGI - it is a BIG concern (red flag) that should be highlighted  - and not to be overlooked."

Is this not a common feature among companies that are growing?

Garden Fresh is growing fast, with revenue surging to RMB 1,877m in 2014 from RMB 180m  in 2010.

It is a red flag only if capex are faked as alleged by Newman9. But analysts and Thai investors had visited the newly-completed Hubei factory last October.

The table you reproduced shows RMB 676m had been paid as tax. What is the likelihood of faked payments to the tax authority?

Leeta : 

nope negative working capital running for an extended period of >5 years is not a common feature among companies that are growing, unless you are talking about s-chips?

Surging revenues 10 fold in 4 years just sounds too good to be true. If it sounds too good to be true.....

The issue here is receivables too much liao. No point investing in a company that's not even able to do a simple thing like collecting its debts, what a joke!!

Ballooning receivables and debt is always a big no no in investing and also a very common tell-tale sign that things are not quite right....

Bluekelah

Do you think Sino had faked payment of RMB 676m in tax between 2009 and the first 9 months of 2015?

Based on results announcements of Sino, its total pre-tax profit during the period was RMB 1,720m. 

No need to fake payment, all these numbers are on paper, u don't even sure if they really 'pay' this amount. 
Remember Eratat, they are in net cash position and give dividend some more, but in the end what happened?

Hi Desmondxyz

Investment involves risk. S chips are more risky.

Here you are saying that Sino has not paid tax and just faked payment in their accounts. 
Are you suggesting that auditors have not even scrutinized the correspondences between Tax authorities and Sino.?

cheers
Oldman

(11-01-2016, 08:49 AM)Oldman9 Wrote:

(11-01-2016, 01:26 AM)desmondxyz Wrote:

(10-01-2016, 11:35 PM)leeeta Wrote:

(10-01-2016, 07:14 PM)BlueKelah Wrote:

(10-01-2016, 05:18 PM)leeeta Wrote: Boon, you have stated "No doubt, working capital is simply a core part of a company’s operations, but when working capital runs in the negative for an extended period of time - since being listed in 2009 until now as in the case of SFGI - it is a BIG concern (red flag) that should be highlighted  - and not to be overlooked."

Is this not a common feature among companies that are growing?

Garden Fresh is growing fast, with revenue surging to RMB 1,877m in 2014 from RMB 180m  in 2010.

It is a red flag only if capex are faked as alleged by Newman9. But analysts and Thai investors had visited the newly-completed Hubei factory last October.

The table you reproduced shows RMB 676m had been paid as tax. What is the likelihood of faked payments to the tax authority?

Leeta : 

nope negative working capital running for an extended period of >5 years is not a common feature among companies that are growing, unless you are talking about s-chips?

Surging revenues 10 fold in 4 years just sounds too good to be true. If it sounds too good to be true.....

The issue here is receivables too much liao. No point investing in a company that's not even able to do a simple thing like collecting its debts, what a joke!!

Ballooning receivables and debt is always a big no no in investing and also a very common tell-tale sign that things are not quite right....

Bluekelah

Do you think Sino had faked payment of RMB 676m in tax between 2009 and the first 9 months of 2015?

Based on results announcements of Sino, its total pre-tax profit during the period was RMB 1,720m. 

No need to fake payment, all these numbers are on paper, u don't even sure if they really 'pay' this amount. 
Remember Eratat, they are in net cash position and give dividend some more, but in the end what happened?

Hi Desmondxyz

Investment involves risk. S chips are more risky.

Here you are saying that Sino has not paid tax and just faked payment in their accounts. 
Are you suggesting that auditors have not even scrutinized the correspondences between Tax authorities and Sino.?

cheers
Oldman

Oldman,

This is exactly why eratat scandal exploded. I believe their account also went thru auditors, but in the end the cash in the bank is fake. What auditors can do sometimes is very limited.

(11-01-2016, 08:57 AM)desmondxyz Wrote:

(11-01-2016, 08:49 AM)Oldman9 Wrote:

(11-01-2016, 01:26 AM)desmondxyz Wrote:

(10-01-2016, 11:35 PM)leeeta Wrote:

(10-01-2016, 07:14 PM)BlueKelah Wrote: Leeta : 

nope negative working capital running for an extended period of >5 years is not a common feature among companies that are growing, unless you are talking about s-chips?

Surging revenues 10 fold in 4 years just sounds too good to be true. If it sounds too good to be true.....

The issue here is receivables too much liao. No point investing in a company that's not even able to do a simple thing like collecting its debts, what a joke!!

Ballooning receivables and debt is always a big no no in investing and also a very common tell-tale sign that things are not quite right....

Bluekelah

Do you think Sino had faked payment of RMB 676m in tax between 2009 and the first 9 months of 2015?

Based on results announcements of Sino, its total pre-tax profit during the period was RMB 1,720m. 

No need to fake payment, all these numbers are on paper, u don't even sure if they really 'pay' this amount. 
Remember Eratat, they are in net cash position and give dividend some more, but in the end what happened?

Hi Desmondxyz

Investment involves risk. S chips are more risky.

Here you are saying that Sino has not paid tax and just faked payment in their accounts. 
Are you suggesting that auditors have not even scrutinized the correspondences between Tax authorities and Sino.?

cheers
Oldman

Oldman,

This is exactly why eratat scandal exploded. I believe their account also went thru auditors, but in the end the cash in the bank is fake. What auditors can do sometimes is very limited.

Hi Desmondxyz

Oldman believes the situation are not the same.
Cash in Eratat might have been withdrawn later before audit.

For Sino, payments to the tax authorities are large amounts over the last 6 years (2009-2014) and must have been easily scrutinized by auditors easily.

cheers
Oldman

History of Eratat.

From FY 09 onwards, Eratat made big bucks. As usual, they also paid 20+ % in tax rates since they are in China. However, some groups of investors became restless, highlighting their increasing receivables, where of course defendants said it was because of growing business

Was it FY 11 or 12, participants attending Eratat AGM were given an Eratat product as a door gift, the shirt's retail price was "more than $60".

FY 13, business was bad, so to mimic the environment. Revenue and receivables fell, and cash increased. In less than a year, the cash disappeared. During the whole time, auditors gave a clean bill of health.

Let's hope this story is not repeated, otherwise this forum will see a lot of "I told you so". I think SFIG does indeed have a real product, but that is as far as I will say

<former investor of Eratat, who managed to dance away in time with a realized profit"

Well, after the S-chips saga in the past, where banks balances are fake, the auditors have ramped up their work. This gap will surely be addressed by now.

If you guys keep using history to judge failure, i doubt you will progress. Speaking with hindsight is obviously the best, but, you can only on living in the past.

Hi alex,

I admire your optimism about our over-worked auditors in Singapore. Wish you all the best in investing in SFIG.

Just to let you know, bank balances cant be fake. Unless, the bank blindly stamp on it.

It's the reconciliation items that will be.. If a fresh graduate is the one inspecting it, then good luck to all. But, this can happen to any company, not only to Grandness.

Just curious, which counters are you investing in now...

(11-01-2016, 09:48 AM)alex Wrote: Well, after the S-chips saga in the past, where banks balances are fake, the auditors have ramped up their work. This gap will surely be addressed by now.

If you guys keep using history to judge failure, i doubt you will progress. Speaking with hindsight is obviously the best, but, you can only on living in the past.

2 conclusions (no malice intended) that can be made from your posting:

1) You are not an auditor. 
2) Based on your logic, the method used to commit fraud can only happen once because all the auditors/experts 
    would have ramped up their work. But time and time again have proved that this is not the case.

1. Are you an auditor yourself?
2. Fraud can happen anywhere, anytime. Not that this company has anymore money for him to milk anymore. Now, the company is not cash rich anymore. All money spent on adverts, plants, pay tax... Doesn't make sense to me at all. If they have money and is not spending, maybe i will be more wary.

CY09

I have just read Budgetier's post (#1080 posted yesterday but only appears today presumably pending moderation).

He has explained the difference between the sales channels of shirts and drinks.

Drinks have a short shelf life of 1 year, and are sold in numerous retail outlets with the help of distributors. Unlike the specialty shops that were obliged to order from Erata, rain or shine, distributors and retail outlets are free agents having no qualm ditching slow-moving items.

The popularity or otherwise of a drink shows up quite quickly.

If loquat juice is rejected by consumers in mainland China, it was unlikely to for Hing Sang (a health care product brand owner listed on the Hong Kong Exchange) to have introduced it to established retail chains such Wellcome, 7-Eleven, Park-shop and Taste. (Jardine Matheson owns the first and operate the second. Li Kah Sing owns that last two.)