Dapai International Holdings (formerly "China Zaino")

[Musicwhiz]

Doesn't look good at all.....

(Not Vested)

http://info.sgx.com/webcoranncatth.nsf/V...90016E351/$file/ProfitWarning.pdf?openelement

http://info.sgx.com/webcoranncatth.nsf/V...9002BD9A4/$file/SGXQuery.pdf?openelement

[FFNow]

Thanks for the post.. Made a huge mistake in buying this company and lucky I divested quite early. Thanks to some enlightenment from the people in this forum..

[Musicwhiz]

You're welcome. Avoiding the potholes is just as important (if not more) than unearthing the gems.....

[dzwm87]

On hindsight, aren't their condition similar to Eratat?

Spending money to renovate stores..

Potentially cutting prices too?

Hmmm..

[Musicwhiz]

Dapai just released a rather atrocious set of 1H 2012 results, with gross losses being incurred in 2Q 2012 and 1H 2012 loss ballooning to RMB 335m, from a profit of RMB 72m yoy.

Cash has shrivelled from RMB 221.5m just 6 months ago to RMB 35.5m, a drop of RMB RMB186m. Debts have in fact gone up from RMB 79m to RMB 186m (more than doubling).

Looking at the CFS, the Company has burnt through about RMB 283m in just 6 months, and obtained RMB 107m worth of new loans.

The reason for the gross loss was discounting of products by 30% in order to sell them. Which makes you wonder if they have brand recognition in the first place when you have to engage in price wars just to maintain sales volumes. ASPs have fallen by 27.5% for backpacks and 37.6% for luggage yoy for 1H 2012 vs 1H 2011! So the small volume increase was more than eroded by the substantial ASP downward revisions!

A word of warning - the Company only has RMB 67.7m of unutilized facilities to draw down, but in 6 months it has burnt through RMB 186m, so this may not even last another 6 months unless things substantially improve.

(Not Vested)

[corydorus]

Frankly speaking, if I can't trust the accounting, deep dives are basically waste of time.