What happen to the RM66 million due from the Govt as this Govt project was completed more than 2 years ago, funny no mention of it otherwise the profit could have been RM71 million this final qtr !, in balance sheet got nearly rm80million cash against share capital of rm95million, which looks too good except for their rm200++ million bonds,,,,think should be a good buy at 13.5 against NTA of 16
They did mention just collect back 14.7mil this qr, now govt still owe Digista 70.6mil. The bonds start borrow in year 2013 for property development segment. In 2018 need to pay back 60mil for bond so no dividend payout expected this qr, dividend might giveout incoming qr coz only 20mil pay back 2019. So curr liab got 60 mil bonds. U can check back the schedule in annual report 2013. More people is hire shown in administration expense mean business grown up as they do ICT service not production or manufacturing can't expected got high NTA.
What I hope is we should elect whole new independent directors, current one seem like no ganqing with govt, payment and big project never link back to company, just know take director fee from company only. People who take this independent non managing director should have good network, so dun hv any kacau and get good payment.
Government sure need to pay, just not sure how long it will drag.
For the past 5-10 years, most of the government project are under PFI scheme (Private Finance Initiative). That mean, Government will provide the land, and private sector will finance and construct the building, then Government lease back the building for a certain period with certain rental. After the concession period end, the building will be surrender to government.
If Government start to drag payment, then company cannot pay back the loan / bond, then government reputation will be affected, because bank give loan to the company based on the guarantee rental agreed by government.
If government default, then bank wont release loan to other PFI project, and the whole country infrastructure project will be suspended immediately.
Hi AK2899, let me explain to you based on my understanding.
I have ask many accounting expert, but no one can give me a satisfy answer, so I analyse it and come out with my own conclusion.
In order for you to have a better understanding, I will illustrate it with other scenario:-
Company A sign a contract with Company B, where Co A will build a Cruise at RM180mil for Co B, and Company B will lease the Cruise from Co A for 15 years, and the rental is RM3mil per month.
So in the Balance Sheet, Co A has incurred RM180mil to build the cruise, but the Cruise is not belong to Co A, so it cannot recognized as Fixed Asset, so it have to recognised as Trade Receiveable.
Then every month Co A issue invoice to bill Co B for the rental, so the rental will reflected in the Revenue. How about the cost? What is the cost incurred for every month? Actually there is no cost, because the cost has been pre-incurred when Co A build the Cruise. So, in order to match the sales, accountant will slowly recognised cost, so you will see the trade receivable getting lower month by month (similar to depreciation concept).
After 15 years, the Trade Receivable will become Nil, and the rental revenue also no more, and the cruise belong to Co B.
The above is a very simple scenario, so it cannot direct reflect the Complexity of Digistar Scenario, because it involved intercompany billing (Government award project to Indera Persada, Indera Persada appoint Digistar Holding S/B to construct the building, and Digistar Holding S/B outsource it to main contractor....etc).
If you company this QR with previous QR, you will suprise why the Non-Current Trade Receivable increased from RM153mil to RM172mil (increase by 19mil)? There are two reason:- i) Over-recognise cost in previous quarter, so now they adjust back. That why you see there is no COGS in current quarter.
ii) Last quarter the trade receivable in Current Asset is 61mil, if we added on this quarter sales 20mil, total trade receivable should be 81mil, but why it suddenly reduced to 37mil (reduced by 44 mil). I suspect the reduction of 44 mil, 19 mil has been transfer back to Non-Current Trade receivable, and balance 25mil has been received from government.
The above is just my own interpretation, please correct me if I am wrong.
For me, Digistar business should be very easy to understand.
Government pay rental RM3mil per month, so 1 year is RM36mil.
Digistar paid bond interest around 5% x RM280mil, so 1 years is RM14mil.
The Trade Receivable RM180mil divided by 15 years, so 1 year recognised cost RM12mil.
The cost to maintain the building (i.e. grass cutting, M&E repair here n there) - RM2mil per year
Gross profit should be RM36 - 14 - 12 - 2 = RM8mil.
Then I assume the Hotel business, IT business, CMS business can earn enough to cover all the cost (director salary, staff salaries, office rental, hotel maintenance...etc), then Digistar should earn minimum RM8mil per year.
Next year onward, after Digistar settle the 1st Tranch of bond RM60mil, it debt will reduced to RM220mil. So this RM60mil debt repayment will increase its profit by RM3mil per year, become RM11mil.
At the same time, if Digistar can clinch another similar project again, then the profit will be double , become RM22mil.
AK2899 Akbukhary thank you so much and so far i buy digistar also because see u so hardworking sharing so many good comment related with this counter , i believe previous Qtr result no good due to private placement because the lower the price , the lower the private placement can get it. (Boleh Land) apa pun boleh. who know the PP is done by dato or his relative.
One more quick Question : - If u see 8 Gross Profit, how much is the EPS u see ? :p
Why this Mejar Wira Datuk Lee dare not deal in Digistar when approval has been granted by KLSE, is he a former military personnel ? looks like a coward in war lah....
Datuk Lee is buying .. 900k @ 0.14 ... BUT ..... WHY The price still keep dropping leh ????? Company make profit ... Low price on private placement .... Major shareholder acquired shares ... But funny the price deny to go up why? Who is the one keep disposing ????
Digistar keep on raise fund.... is either something wrong, or something is brewing.
Those haven't invest in this stock, please stay aside, don't risk your money.
Those who invested recently (< 1 year) and feel pain on the losses, can consider to cut loss, there are many good counter out there.
Those who invested long long time (i.e. 3-5 years) and already no feeling about the huge losses incurred from this counter, it is worth to continue to stay until the last card reveal, to see whether Datuk Lee is holding a Spade Ace, or a lousy Diamond Three.
Took cheap Viagra by Major Lee, has become Minor Lee...
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Posted by Hua Joshuaayoung > 2017-11-28 21:36 | Report Abuse
hopefully tmr fried up