Sino Grandness

[BlueDogMeow]

Well, as I said, calling a duck a Cadillac does not make it a Cadillac. The sentence regarding DTL is just pointing out the fact that cash burn would be worse if the tax was paid in full.

What terrible results. No news on IPOD. No news on debt repayment whatsoever even after ~3 weeks.

Here are a few interesting red flags.
Cash burn was $122m RMB. Here is the breakdown:
Receivables rose $160m. Not a single reprieve in receivables since the IPO. Rose from 165 days in Q4 2014 to 198 days today. That is a 33 days in 6 months.
inventories rose $124m, albeit some will argue this ride is seasonal.
A good portion of the payables SinoG drew down was repaid. This shows SinoG has no leverage against its suppliers.
Even though the company recorded a 66m tax charge, the company paid 31.5m. This created a deferred tax liability line item. Will be interesting to see if this DTL will get paid down.
SG&A rose 65.2% against a 14.5% move in inventories.

I shorted some SinoG a day before the results because it was a highly asymmetric bet.

I see that the RMB160m increase you refer to is the change of the sum of trade receivables and other receivables between 1Q 15 and 2Q 15:

..................................................RMB

...................................2Q 15......1Q 15........4Q 14
Trade receivables.............953.......1,133.........1,110
Other receivables.............698..........356............317
Total...........................1,651.......1,499..........1,427

Trade receivables decreased as a result of better credit management. The company has added that in the month of July, RMB 320m was collected.


Other receivables comprise VAT receivables, export tax refund, deposit and prepayments. They are not assets at risk as the first two items are owed by government and the last two are advances to suppliers and contractors.

The annual report shows that of the RMB 317m other receivables as at 31 Dec 14 were made up of the following:

.....................................................RMB m
(1) VAT receivables..............................121
(2) export tax refund..............................48
(3) advances to suppliers of PPE...............55
(4) advances to suppliers........................77
(5) others............................................16

You have also pointed out the tax (RMB 31.5m as shown in cash flow statement ) paid in 2Q was lower than the tax (RMB 66m as shown in the P&L statement) attributable to 2Q profit, and wondered whether Sino has the means to settle the tax.

Is the concern valid as Sino paid the following taxes (in RMB m) in the past 4 years?

2014....185
2013....139
2012....111
2011......59.