Penguin International

(08-11-2014, 05:05 PM)CY09 Wrote: Hi Dosser,

Hope the below Excel clears some of your query
As you can see the receivables growth is a bit erratic, while revenue growth is constant save for Q3Fy13. Overall, revenue growth outstrips receivables growth. Have not done for inventories, forgot to add it in.

Other info: Penguin's GPM is about 32.3%. Q1Fy14 result is a bit outlier as Penguin enjoyed tax credit instead of tax expense during Q1

Many thanks, nice work. Can also be looked at in terms of total receivables as a proportion of revenue (attached - I have added Chart 1 to your graph). Which would suggest that total receivables have generally been growing (and are currently) at about 60+% of 3 months revenue, but with local 'blips' down to about 30+%. Not a concern for the business, but, as would be expected, fast revenue growth leads to increasing amounts of cash being tied up in receivables. Certainly shows that there is no general increase in payment times beyond the norm.

(08-11-2014, 06:30 PM)mslee888 Wrote: IMO, there is no big cause of alarm yet because of increasing trade receivables. This is attributed to fast rev growth. Though it affects the cash flow, this is normal for a fast growing biz. I am fine if there is no increase in dividend payout, the cash will come in once the sales do not grow as rapid as the last few qtrs.

So far Penguin does not have bad debts provision so I guess it is fine to assume they have "good" customers.

With a good and conservative management and only a quarter to go, I am sure this is going to be a fantastic year for Penguin.

I agree with mslee888 that the receivable is a valid concern, but shouldn't be alarming.

I reviewed the account, and the receivable is very likely due to revenue growth and improved productivity, without any deterioration in credit term of receivable.

The trade receivable is at 30 days term previously, and assuming it is the same in FY2014. The sale in Q3 is approx 52 mil, and 1/3 is about 17 mil.

If we look at inventory days, we will find that the productivity of boat building is improving quite a bit, q-o-q, and y-o-y.

It should be safely assumed that the sale of last month in Q3 is much more than 17 mil, with improving productivity. It makes the receivable of 24 mil pretty reasonable to me.

Sharing a thought.

(vested, thus might be biased)

So far Mr Market has rewarded Penguin shareholders with an extra $0.01, or 4.3%, in market valuation this morning. At the last done price of $0.245, and against Penguin's projected 31Dec14 NAV/share of approx. $0.213 (assuming Q4's EPS would be another $0.0121 - similar to Q3's), Mr Market is now merely attaching a small $0.032 premium for Penguin's future earnings stream, which should grow further and exceed the projected current FY14's EPS of $0.05 a year.

Is a premium of 1.5x to 2.0x of current EPS too much for a well-established and run, and growing business with an expanding international footprint?

No matter how much recommendations provided by us, one clear catalyst is lacking and that is analyst coverage of penguin imo. This is needed as the Market knows little of this gem

(10-11-2014, 10:45 AM)CY09 Wrote: No matter how much recommendations provided by us, one clear catalyst is lacking and that is analyst coverage of penguin imo. This is needed as the Market knows little of this gem

When Penguin was trading at below 10 cents, it was very illiquid. It was common to have little or no trading for this counter on many days. Now that it was above 20 cents, it is a lot more active. Some days it even managed to rank in the top 20 active list. There is clearly an interest in this company, and more investors are taking notice of it, whether there is analyst coverage or not. Knowing that the management team is really low profile, I am guessing that they might even refuse analyst interview if ever approach. What is still lacking now, IMO, is for Penguin to show investors that they are willing to pay out a good dividends as rewards for its good performance. They might do that trick this year, and perhaps along with it, attract the interest of analysts.

(10-11-2014, 10:59 AM)Ben Wrote:

(10-11-2014, 10:45 AM)CY09 Wrote: No matter how much recommendations provided by us, one clear catalyst is lacking and that is analyst coverage of penguin imo. This is needed as the Market knows little of this gem

When Penguin was trading at below 10 cents, it was very illiquid. It was common to have little or no trading for this counter on many days. Now that it was above 20 cents, it is a lot more active. Some days it even managed to rank in the top 20 active list. There is clearly an interest in this company, and more investors are taking notice of it, whether there is analyst coverage or not. Knowing that the management team is really low profile, I am guessing that they might even refuse analyst interview if ever approach. What is still lacking now, IMO, is for Penguin to show investors that they are willing to pay out a good dividends as rewards for its good performance. They might do that trick this year, and perhaps along with it, attract the interest of analysts.

I am adding at 0.245. It's my first time getting my order fulfilled in so many parts. People are selling to me at 1 lot at a time.

1 lot at a time, means there maybe some manipulations at the moment, best to stay away, unless you are happy with the price that you get,

Personally, i stay away and will wait out....

*vested though*

^^ I experience this sometimes myself when buying other stocks.
My guess is that a big fund wants to sell a big block, but they do not want to sell everything in one shot and cause a crash, so they program their trading computer to sell 1 lot at a time at fixed interval.

Is there some other reason for this practice?

(10-11-2014, 04:16 PM)gzbkel Wrote: ^^ I experience this sometimes myself when buying other stocks.
My guess is that a big fund wants to sell a big block, but they do not want to sell everything in one shot and cause a crash, so they program their trading computer to sell 1 lot at a time at fixed interval.

Is there some other reason for this practice?

That could be the reason. Another reason is that they want to know who is on the other side of the trade.

P/S: After averaging down for the past few weeks, I have decided to reduce my holding (and take profits) in Penguin which previously constitutes 60% of my portfolio.

(Still Vested)

Not sure about the local funds but the biggest Ang Moh institution vested in Penguin is DFA with over 3M shares (from Morningstar).