Eratat Lifestyle

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(23-08-2013, 05:25 PM)davidkie Wrote:
(23-08-2013, 02:06 PM)momoeagle Wrote: I'm suspecting that 32mil that was sold at 13.8 cents has something to do with the exceptionally high volume on 15th August, which closed at 13.8 cents.

It may be a coincidence though... Correct me if I'm wrong, volumes of married deals are also in SGX right?
If so, then it should be reported within 2 business days, but the date of change in interested mentioned in the pdf is 21st August ...

Hmmm

I dont see how Ye Sanzhi sell off related to the 15th Aug high volume.. If the sell off done on 15th, then it is not off market sell off..

What i suspects are someone ( more than 1 ) are collecting the share
secretly, they are avoiding the mandatory limit for announcement of new subsantial shareholders..

I think they have collected around 10% of the outstanding shares..

Let see for next few days Smile
The typical daily volume is about 3~4 mil.

On 15th August, the volume was about 36mil.
And 32mil shares were offloaded on a married deal.

The maths work out reasonably.


But it may still be coincidence Angel
http://wealthbuch.blogspot.com
-- Where I blog about matters on finances
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On 21 May 2009,Ye Sanzhi, purchased 32,175,000 ordinary shares at the price of SGD 0.125 per share.

On 01 June 2009, he became an Executive Director of the Company.

http://www.eratatgroup.com/v2/files/rele...2May09.pdf

4 years and 3 months later, after 19 consecutive profitable quarters by Eratat, Ye Sanzhi sold off the same amount of shares he owned in the Company at SGD 0.138 per share, resulting in a capital gain of SGD 418,275

Overall, Ye Sanzhi managed to make a positive return on his investment. In addition to the capital gain made at disposal, over this investment period, he also collected dividend payout from Eratat estimated to be about RMB 4.56 million.

Nevertheless, questions remain

1) As an Executive Director (who is also a substantial shareholder) – why would he dispose of his stake in the company ENTIRELY from 6.77% to zero?
2) Why would he cashed out at such a low price (of SGD 0.138 per share) - considering that net cash per share of Eratat is more than SGD 0.20 ?
3) Why would he cash out at this point in time – not long after the successful issuance of the bond and warrant? Interestingly, chargers had been made over shares of Lin Jiancheng under the bond/warrant issuance, but not over shares of Ye Sanzhi.
4) Was this a “rational” or “irrational” behavior on the part of Ye Sanzhi ?
5) What is the probability of an “insider” behaving irrationally with his entire stake (interests) in the company?
6) As an “insider”, does he know something that minority shareholders don’t?
7) Who was at the other side of the trade – the buyer of this off-market transaction?

(Not Vested)
Research, research and research - Please do your own due diligence (DYODD) before you invest - Any reliance on my analysis is SOLELY at your own risk.
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looking at the fall of share price and director selling in 3Q......3Q2013 or 4Q2013 result might be a 'surprise'...

not vested....
You can find more of my postings in http://investideas.net/forum/
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Was posting in NextInsight forum, and came across a link.

IN summary
For Eratat:
ROE = 14.7%
ROA = 4.32% (low largely due to receivables as 50% of total assets)

A good link to read up on:
http://www.investopedia.com/articles/bas...052005.asp
http://wealthbuch.blogspot.com
-- Where I blog about matters on finances
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A little piece of good news amid the "depressed" share price.

A new Eratat shop opened in Panyang of Jiangxi Province on October 1, the Chinese National Day

http://www.chinasspp.com/News/Detail/201...152262.htm

(Not vested)
Research, research and research - Please do your own due diligence (DYODD) before you invest - Any reliance on my analysis is SOLELY at your own risk.
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Managed to spot some activities in Jinan / Shandong Province and Hangzhou / Zhejiang Province – but do not know how many outlets are there?

Jinan / Shandong Province

- “鳄莱特服饰济南星耀商贸有限公司” – It looks like this is Eratat’s distributor in the Shandong Province. See introduction : http://jinan.myjob.com/company/32294503.html
- 13 outlets operated directly by the distributor plus many others operated by sub-distributors
- The introduction mentioned the distributor opened a shop at Parc66 in Jinan, which is consistent with the shopping directory of the mall belongs to Hang Lung Properties of HK : http://www.parc66.com/en/fashion/mens-fashion.aspx
- Recent recruting advertisements : http://opendata.baidu.com/zhaopin/?p=min...n=20&rn=20

Hangzhou / Zhejiang :
- 杭州炫烨服饰有限公司为鳄莱特集团在杭州区域注册的分公司,经营“ERATAT”品牌相关服饰产品。鳄莱特集团总部位于福建省晋江市,集团在2008年于新加坡成功上市,目前分公司在浙江区域已有几十家专卖店,需要大量引进各类人才。- Not too sure if this is a distributor or directly owned by Eratat? Looks more like a distributor. http://search.51job.com/list/co,c,273322...,10,1.html
- Recent recruiting advertisements : http://bj.528.com.cn/resume/util/s991107.html - in expansion mode ?

(Not vested)
Research, research and research - Please do your own due diligence (DYODD) before you invest - Any reliance on my analysis is SOLELY at your own risk.
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Forum users should check out momoeagle's analysis on NextInsight's forum:

http://www.nextinsight.net/index.php/for...?start=972

"I am ok with their 120 days credit, although the ideal credit should be about 90 days. "

We have to be clear here. It is not whether you are ok a not. You have no choice.

Even if they tell you tomorrow that their credit days will be 240 days, you have no choice and no control at all.


"Momoeagle, u hv been criticising abt the trade receivables. In ur opinion, what do u think is the ideal credit days should give to the distributors?"

We need to be clear here too that my main criticism is not the credit days, but the relative size of the receivables, which is why I mention it in percentages.

Simply put, credit days for receivables can be easily reduced by rolling over the credit. E.g. I pay off $100 of receivables that are 150 days old, and buy $120 new products at credit, so that my receivables start at 0 days again. Hey credit days are reduced!

Look at this, this is a company that tells you it has so much assets (RMB 1 bil), but 57% of it is in receivables! Like wow!


"Eratat has been gg through transformation for the past two years to a men casualwear. It is taking the right steps so forget abt the past years. The good years for eratat are coming as they hv position themselves strong to undertake their next major expansion."

Find me a listed company that won't tell you
1) we are operating in a challenging environment,
2) we are well positioned to _____[Insert optimistic goals]___, and
3) we will emerge stronger in the long run.

At worst, it is about profit warnings [Note the words, not losses], but every one is always confident in the long run.

Yes, in the long run.

And in the long run, we are all dead.

And operating in a highly competitive industry, and in a country called China rampant with cheap clothing manufacturers that could be of high quality as well...? What are the odds of a premium Made-In-China clothing manufacturer succeeding? In my opinion which is of course extremely subjective, I say extremely low.


"Give eratat time, the receivables issue will slowly be taken care of, as i understand the management would also prefer to issue shorter credit days. What is imptly is profits n cash are growing so we can ecpect dividends to multiply."

Given time, they had successfully reduced some receivables by a generous renovation subsidy and sales incentive. And actually convinced many about it. What an excellent track record!



Given such cheap funds available worldwide due to low interest rates environment, this is a company that had no choice (in the CFO's words) but to borrow at such exorbitant rates.


Furthermore, given 9 cts share price vs 23 cts net cash per share (saw it somewhere in the forum), the company could actually privatize itself at 11.5 cents, and earn an instant 100% gain. What is stopping them from doing that? Does anyone really think they care so much for the investors that they won't do that so that they can expand the company for you? Yes, I'm being very skeptical here.

And also:

http://www.nextinsight.net/index.php/for...?start=978

Let just say I stop short of talking about any fradulence. High receivables is already a potential red flag on it. And I have not even touch on the director selling all just before the price goes down.

"In business which company do not face receivable issue"
Find another business that has greater than 50% total assets in receivables.

"do not face steep competition"
SGX, in buying of local stocks.
Local telcos, in an oligopoly

"Borrowing at high interest rate seems no choice in the PRC market"
Yeah, Net Profit Margin of 13.72% but borrow at 16+% and effective annual interest of 32%. "No choice" but to borrow indeed.

Locally, if we borrow $$ to buy stocks, the riskiest of instruments, even if we use our cash as collateral, the loan percentage is 6% and the quantum is three times the amount we put up as collateral or two times the value of stocks put up as collateral. Eratat has >500mil RMB in cash, yet they have "no choice" but to borrow 100mil RMB at 32% interest. This "no choice" seems to make sense to some people, but it certainly does not make sense to me. Seems like something that doesn't make sense can actually be brushed off with a simple reason of "no choice".


Yep, I guess I am really damn stupid and missing a gem in this company.
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Came across this paragraph in today The Straits Times by Goh Eng Yeow titled <<Enforce rules on directors' trades>> and found this paragraph appropriate for this counter and some other S-chips......



Sometimes the actions of insiders speak with more clarity and insight than all the analysts' reports, or efforts of a company to doll itself up, put together.
You can find more of my postings in http://investideas.net/forum/
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Keep a lookout for this potential breakout.
Pros: high book value, low PE, low debt or no debt strong cash reserve.
Cons: potentially a S-chip rubbish or a pump and dump.

Tikamly vested.
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(26-12-2013, 01:41 PM)DP28 Wrote: Keep a lookout for this potential breakout.
Pros: high book value, low PE, low debt or no debt strong cash reserve.
Cons: potentially a S-chip rubbish or a pump and dump.

Tikamly vested.

it broke out very strongly
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