Posted by soojinhou > 2017-09-12 20:13 | Report Abuse

And why does Sendai has such huge receivables and debt? Maybe the explanation lies with their Middle East customers. Since crude oil price collapsed, their customers are now pretty cash strapped. Saudi has been running double digit deficits. Where got money to pay? Chances are, they will drag payment as long as possible. Look, if they can't even pay the wages of their own civil servants, where does Sendai rank as an overseas contractor?

Posted by ks55 > 2017-09-12 21:06 | Report Abuse

Like all red chips, I just want to bring home one point. i.e. I don't trust the owner. Regardless what other people want to say, I always remind myself if I don't trust the Director, I will stay away from that counter.

Remember what analysts told you about Linear Corp when it announced to the whole world it got Dinding District Cooling Tower project worth RM 1000 million (1 Billion)?

Remember Masterskill? What happened now?

There are many many similar example.
If Directors not credible, your hard-earned money will go down the drain.
To invest in any counter, first and foremost look at who are the owners/ Directors.
Certain characters you should by all means......AVOID.
There are thousand and one other counters to look at..............

Posted by 3iii > 2017-09-12 21:19 | Report Abuse

KYY bought into Eversendai at prices below 50 sen. The share price rose as he bought into this company.

Eversendai is facing a challenging time. I think its costs of doing business in the Middle East has gone up when the Saudi impose various difficulties on Qatar.

Posted by hpcp > 2017-09-12 21:47 | Report Abuse

The receivables are largely related to USD. With the strengthening of RM, we may see the 3Q results being dragged by forex loss

Posted by cheoky > 2017-09-12 21:55 | Report Abuse

uncle cannot sleep. 四面楚歌。

Posted by BLee > 2017-09-12 22:30 | Report Abuse

Same stock, two extreme tales..trade at own risks. Food for thought.

Posted by yfchong > 2017-09-12 22:35 | Report Abuse

Uncle Fong also buy..., but some taught n homework time now., still got many to choose..., no worry do not choose a tree over the forest.. ok

Posted by Stock Kingdom > 2017-09-12 23:03 | Report Abuse

Wow, Low margin & yet extraordinary long payment term, very scary.

The poor cash flows of Eversendai over the last 5 years were mainly due to the growing receivables from trade and contract works. Total receivables amount to RM1.7 billion, same as that of revenue. This means Eversendai takes about one full year to collect its dues after worked done.

Posted by sense maker > 2017-09-12 23:41 | Report Abuse

As I wrote earlier under Sendai's thread, Sendai's fair value is RM0.30.

Posted by Frank Soweto > 2017-09-13 02:17 | Report Abuse

Phew lucky no have this one - looks same same like General Lee's KNN- huge orderbook,High rev but low profit sometimes even loss coz low margins or no margins LOL, high receivables - good luck in collecting them especially taking a year doing so, skyrocketing borrowings,high loan servicing interest oso beh tahan somemore no CF OMG like identical twins this Sendai n KNN, right issues n free warrants ah ask General Lee - he is expert - maybe can ask him HOW to oso do the split 1 to 4 then do back the reverse,can oso ask takeover plans- sure guarantee kaput wan of course but initially will get all excited n goreng goreng LOL

Posted by hpcp > 2017-09-13 08:54 | Report Abuse

For similar market cap, why not consider Gadang? Net cash, paying dividend and net profit higher than Eversendai

Posted by tah16600 > 2017-09-13 10:07 | Report Abuse

Beware! it will be like Saag one day

Posted by Bruce88 > 2017-09-13 11:37 | Report Abuse

Still can't see the light !

Posted by limhh > 2017-09-13 14:20 | Report Abuse

i am tire of managing downside, in bull market margin of safety seems useless, high continue to go higher. stock with margin of safety continue to stay as it is or even lower.

Posted by kcchongnz > 2017-09-13 14:30 | Report Abuse

Posted by limhh > Sep 13, 2017 02:20 PM | Report Abuse
i am tire of managing downside, in bull market margin of safety seems useless, high continue to go higher. stock with margin of safety continue to stay as it is or even lower.


Then buy Sendai.

• It is an established company with reputable records in the construction of steel structures
• It has many years of overseas exposure
• It has a huge order book, with RM2.7 billion of jobs on hand, all over the world, especially in the Middle East, India and South-East Asia.
• It has a huge workforce of 15000 personnel.
• It is going to complete all the jobs at hand and on time as promised by the boss
• It has a major investor with deep pocket

The bigger fool theory does work once in a while.

Posted by kcchongnz > 2017-09-13 18:19 | Report Abuse

manutdchampion has left a new comment on your post "Banging on Eversendai: Risk and Return kcchongnz":
still can hold sendai?my average price is 1.150 thanks.

It is a tough question as I have no idea what the share price will be tomorrow, in the next month, or the next year.

However, I think I have given you some analysis in this thread for you to make an informed decision

Good luck. You need it.

Posted by tah16600 > 2017-09-13 22:48 | Report Abuse

Small loss is better than castastrophe loss

Posted by kcchongnz > 2017-09-14 00:24 | Report Abuse

Posted by 3iii > Sep 12, 2017 09:19 PM | Report Abuse
KYY bought into Eversendai at prices below 50 sen. The share price rose as he bought into this company.
Eversendai is facing a challenging time. I think its costs of doing business in the Middle East has gone up when the Saudi impose various difficulties on Qatar.


For an illiquid stock like Sendai, it doesn’t need a lot of capital to jack its share price up from 50 sen to RM1.70+, especially with concerted effort from other major shareholders. People who follow would have made a lot of money. That is provided they bought them before it was promoted relentlessly in public forums, and even in magazines.

Hence share price movement often has nothing to do with its value, especially in the short term, during which the stock market is a voting machine.

In the long-term, the stock market is a weighing machine.

Posted by kcchongnz > 2017-09-14 11:31 | Report Abuse

Posted by Stock Kingdom > Sep 12, 2017 11:03 PM | Report Abuse
Wow, Low margin & yet extraordinary long payment term, very scary.


In construction works, payment usually takes about 3 months after work done. It involves submission of claims, certifications by consultants, issue of payment certificate by the architect, follow by payment by client.

If the receivables are so high for every quarter like that of Sendai, most probably there are problems such as below,

1) Client has no money to pay
2) 2) There are disputes in claims
3) Work delay and hence
4) Defective works and hence
5) Counter claim by clients
6) Arbitrations or long-drawn cour case

None of the above is favourable to the contractor.

Posted by Alex Foo > 2017-09-14 11:32 | Report Abuse

thks kc sifu for the writing. Learning =)

Posted by stockraider > 2017-09-14 11:41 | Report Abuse

One logical & rational explaination of placement is good for u, is when u had bought alot of the share at Rm 0.60, and the stock is being place out at above rm 0.90 loh...!!

Posted by kcchongnz > 2017-09-14 12:57 | Report Abuse

Posted by sense maker > Sep 12, 2017 11:41 PM | Report Abuse
As I wrote earlier under Sendai's thread, Sendai's fair value is RM0.30.


Anything about corporate finance and investing which comes out from sense maker is worth two thoughts.

Posted by cheahsk > 2017-09-24 18:50 | Report Abuse

Deloitte? Same auditor as 1MDB?

Posted by chonghai > 2017-09-27 21:35 | Report Abuse

With steel price going berserk, good luck to Sendai

Posted by Yan Cheng Cheok > 2017-09-29 01:26 | Report Abuse

Hi kcchongnz, thanks for the useful sharing.

May I know how do you calculate FCF from the cash flow statement?

The only thing I know is

Free cash flow = cash flow from operating activities - net capital expenditures

From the "SECOND QUARTER ENDED 30 JUNE 2017" quarterly report, under cash flow statement page, I can see

"Net cash flows (used in)/generated from operating activities" is -33,796,000.

May I know how do you find out "net capital expenditures"?

Thank you.

Posted by kcchongnz > 2017-09-29 08:20 | Report Abuse

Posted by Yan Cheng Cheok > Sep 29, 2017 01:26 AM | Report Abuse
Hi kcchongnz, thanks for the useful sharing.
May I know how do you calculate FCF from the cash flow statement?
The only thing I know is
Free cash flow = cash flow from operating activities - net capital expenditures
From the "SECOND QUARTER ENDED 30 JUNE 2017" quarterly report, under cash flow statement page, I can see
"Net cash flows (used in)/generated from operating activities" is -33,796,000.
May I know how do you find out "net capital expenditures"?
Thank you.


Net capex = purchase of PPE less of proceeds from disposal of PPE