Prolexus is slowly losing Nike?

Recently discussion in the forum with @karadis and @alvin1188 drove my curiosity further.

Before we look into the business expansion correlation between Prolexus and Nike, do feel free read on my latest post on the recent finanical QR performance of Prolexus.

https://klse.i3investor.com/blogs/sujibaby_yongtai/2021-07-25-story-h1568785245-Prolexus_8966_Q3_2021_ACTUAL_versus_my_FORECAST_25_July_2021_Sujibaby.jsp

History

Lets head back to the begining of time.

It is speculated that Prolexus revenue and share price had drastic increase through improved contract orders from Nike in 2012 to 2015. Further details can be found in a blog post by Bull & Bear Research written back in 2015.

https://klse.i3investor.com/blogs/bullandbear/2015-01-19-story68729-Prolexus_Bhd_an_undervalued_gem_with_solid_track_record.jsp

Prolexus had its best days to ride on Nike's sales & revenue increase with weakening RM in 2015. Sharing another post in 2015 elaborating it.

https://www.sharetisfy.com/2015/03/prlexus-8966-prolexuss-key-customer.html

Prolexus bull-run came to an end when its revenue started to take a hit in 2016 and 2017 onwards. As shown below, Prolexus revenue and profit has not been experiencing stable growth upon Q2/2017.

The interesting fact was, it was not due to the fall of revenue or share price performance of Nike. Took a peak at Nike's share price performance, my goodness me!

First, Nike revenue growth.

Second, Nike share price growth.

What if Nike order reduction is not the only reason for the downfall?

Prolexus was offering both capital gains and fair dividend pay outs until ONE wrong decision at the worst timing, initiated its destruction. I have illustrated some turnkey events that occured for better understanding.

Analyzing the history, I have mad respect for the MD Lau Mong Ying for building Prolexus actively since 2011. As an investor, he is the kind of leader that can hold my money so that I sleep well at night.

Many would have missed this but, it seems that the redesignation of the CFO to become Executive Director was part of the Group's succession planning. As investors, this is a noteworthy point to ponder upon.

As the designated successor of the talented Lau Mong Ying, what has been achieved so far by the new Executive Director is indeed disappointing. The revenue drop, lack of orders secured and an under-utilized textile factory with poor operation management of its own.

Well, I cannot help to wonder on why Right Issue decision was made instead of Private Placement at that time. Building its own textile factory to control supply chain was not a bad idea after all, expecially when your main customer is placing order somewhere else. Was the CFO too indulged in excitement of being a possible successer for the empire that Lau Mong Ying built?

Although we could never deny a possible rise after the downfall, the future seems bleak without a change of leadership for sure. As investors, it is important to have a holistic approach on share price growth as it often reflects business potentials with visionary leaders. Prolexus certainly has its serious concerns.

If I were to be among the members of the board, wouldn't I be worried on the outcome of Prolexus upon retirement of Lau Mong Ying?

So, what caused the extraordinary profit in Sept 2020?

Who were the employees that made it happen? Are they still being employed? That is a million dollar question to answer. As an investor, that is the question that we may ask the management.

The public corporate figures mentioned above was for informative dicussion purpose only. No offense given or taken. Public companies are named 'Public' for a reason after all.

Trade Safe!

Disclaimer: The above analysis is intended solely for informational and educational purpose for peers and, should not be used as a basis for making any specific investment, business or commercial decision. Any decisions to place trades in the financial markets, including trading in stock or options or other financial instruments, is a personal decision that should only be made after thorough research, including a personal risk and financial assessment, and the engagement of professional assistance to the extend one believe its necessary.