Sino Grandness

[CityFarmer]

This thread is a very popular thread, and I may not be able to vet thru all posts.

Please raise moderator report, if you feel that a post need moderator attention. We will look into it.

Thanks you

Regards
Moderator

[GenS70]

moderator has to be fair, I do not wish we all have to send our postings to lawyers to vet first before posting

[BlueDogMeow]

i don't have to say anything to prove anything. The writing is all on the wall

[BlueDogMeow]

Regardless, I don't know why some people here are so concerned about me giving my opinions on this company. If you are truly in it for the long run, me "bashing" this company is good for you as you will be able to buy this company at a great discount to intrinsic value.

[CityFarmer]

moderator has to be fair, I do not wish we all have to send our postings to lawyers to vet first before posting

I don't expect lawyer involvement, but a responsible attitude in posting. Please read the posting guideline.

Regards
Moderator

[swang107]

Looking at what is in the price.

As forumer gens70 pointed out, SFGI is trading at about 2x trailing 12m PE. And i add, at 0.5x NAV (Noble Group is trading at about s$0.50 and NAV is about s$1.1). Assuming we can trust both company's calculations here.

Asymmetric risk/reward ......For multi-bagger investment returns, often imagination and extreme valuations are prerequisites. So what do you guys really expect out of this ongoing CB discussion? That they force redemption? or they settle on better terms? What would an intelligent CB investor want? Then what would happen to SFGI's valuations? What scenario will benefit these CB investors the most?

[CityFarmer]

Regardless, I don't know why some people here are so concerned about me giving my opinions on this company. If you are truly in it for the long run, me "bashing" this company is good for you as you will be able to buy this company at a great discount to intrinsic value.

Again, I would like to emphasis here is, a responsible attitude in posting, rather than free-will "bashing". I agree that it might be beneficial, but it is not the point.

Please take note. No further action needed up-to-date, except monitoring.

Thanks

Regards
Moderator

[CityFarmer]

Looking at what is in the price.

As forumer gens70 pointed out, SFGI is trading at about 2x trailing 12m PE. And i add, at 0.5x NAV (Noble Group is trading at about s$0.50 and NAV is about s$1.1). Assuming we can trust both company's calculations here.

Asymmetric risk/reward ......For multi-bagger investment returns, often imagination and extreme valuations are prerequisites. So what do you guys really expect out of this ongoing CB discussion? That they force redemption? or they settle on better terms? What would an intelligent CB investor want? Then what would happen to SFGI's valuations? What scenario will benefit these CB investors the most?

I reckon many good answers are available in previous posts of this thread. You may want to read them to clear your doubts.

(not vested, and will very unlikely be vested)

[Oldman9]

Regardless, I don't know why some people here are so concerned about me giving my opinions on this company. If you are truly in it for the long run, me "bashing" this company is good for you as you will be able to buy this company at a great discount to intrinsic value.

Hi BDM,

Opinions are fine but not false accusations.

cheers
oldman

[butcher]

Hi. None taken. DTL is a misnomer. The point is the economic reality of cash outflow is being understated. Even though the number is already that bad.

I did not say the cash outflow does not complie with accounting standards, I am saying that, similar to the Noble case, accounting information rarely match economic reality, and the economic reality for SinoG is massive cash outflow for seemingly no reason.

If I shift all of my trade receivables to other receivables, does it mean the business is better? No...it is just a restatement. Of course I can't prove that trade receivables are being shifted due to poor disclosure but the empirical data certainly points towards that direction. Of course one can say that other trade receivables does not have trade receivables in them, but that requires leap of faith I am u wiling to take, especially for a management team that time and again fail to keep their promises.

On a valuation standpoint, mechanically wise, SinoG is a short regardless of the growth potential.

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.

Hi BlueDogMeow,

I hope you don't mind if I state my humble opinion on your statement. No offence, please don't take it hard.

The deferred tax liability ("DTL") are not resultant due to difference between tax expense in the profit and loss as compared to tax paid. You may refer to FRS 12 paragraph 15 to 18. A copy of FRS 12 attached. Income tax expense recognised to profit and loss consisted of tax on the relevant period plus any adjustments in respect of prior periods plus deferred taxation (which will include any adjustments in respect of prior period). You may refer to EY specimen financial statements disclosure notes on the attached pdf file page 94/234 for an idea. There are other Big 4 specimen FS available online also which users may also refer to. (I not from nor advertising for EY).

Generally, when carrying value larger than tax base, it gives rise to a taxable temporary difference which is multiplied by the applicable tax rate to derive the deferred taxation. In this case, a DTL.

Various other websites to understand deferred taxation (list not exhaustive) as follows:-
https://en.wikipedia.org/wiki/Deferred_tax
http://www.iasplus.com/en/standards/ias/ias12

Hi Blue, sorry no offence,

Just hope you understand the fundamental concept that Deferred Taxation arises due to timing differences due to differences in accounting and tax treatments. Cash out flows paid for tax will be offset against the provision for taxation account. These are widely applied almost globally no matter IFRS or GAAP.

I can't understand what are the reasons for the statement that 'economic reality of cash outflow is being understated' as mentioned.

With regards to your other statement that the company shifted receivables from trade to others. I think this is groundless statement and without merit. I thought I have pointed out in yesterday post that the company made disclosures on the decrease and increase in trade and other receivables which I think you had overlooked. The reasons can be found in the exact same announcement.

There are no shifting of amounts between trade and other receivables my dear friend.

Also wish to point out, any cash flows impacts due to trade & other receivables will also not impact free cash flows