Avarga (formerly: UPP Holdings)

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Both yours and Mr Tong’s statements are right.
It is just a difference of time horizon.

In short term, gross margin fluctuates greatly due to inventory gain/loss (as you have pointed out using that particular quarter result).
So you are right, gross margin fluctuates, could even go minus.

In long run, gross margin will go toward their average margin of lets say 4% which is what Mr Tong was referring.

If you are short term speculator, your view is totally right.
To me, I am looking to hold this through cycles, hence eventually Mr Tong will be right.

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