SJC (9431) – The Last Lost You Will Ever See

Well, that is indeed a bold statement. But barring any unforeseen circumstances, SJC who is specialized on Out-Of-Home (OOH) Advertising, should benefit from the gradual reopening of economy. That being said, SJC is still in the red for their latest financial quarter results – but I’m convinced that this will be the last lost-making quarter they have.

Don’t believe me? Anyway, time will tell. We will first digest a bit on SJC’s latest financial quarter details to understand more about their performance.

In the current quarter ended 30^th September 2021, SJC was still impacted by the full movement control order (FMCO). But if you look closely, the costs should go lower and not higher during a lockdown, why did their costs increase in this quarter?

As you may have already been aware, there are always good expenses and bad expenses in every business. Good expenses are spent on places where you could generate more profit and cashflow, and create more shareholder value, and bad expense are spent on the management own pocket, usually in the form of Related Party Transaction (RPT), where the money usually goes into their pocket instead of shareholders’.

Obviously in SJC’s case, they are spending good amount of money – hence why the operating expenses increased in tandem with their new talent recruitment as well as corporate exercise expenses they had in August.

As you can see, the message from the management aligns.

But is it guaranteed that SJC will make profit in the next quarter? Well, the only thing that guarantees you are usually scam. This is very likely to be their last loss making quarter, but any further impact or policy changes might adversely affect the company.

Nevertheless, the company had already “strongly hinted” that with the initiatives of the government to transit from pandemic to endemic, as well as they could benefit in the coming quarters, I believe SJC could turn black on the bottom line level in the next quarterly results. I also did some channel check that had received big orders as Christmas is nearing, and this might carry some additional advertising orders for them.

What’s in it for me for having conviction in the company? I’m just a regular shareholder of SJC, just like you, and I sincerely hope more people would notice this undervalued gem.

Cheers.