a) Selling cost =1,311 (was 1,734) b) Admin cost = 2,696 (was 3,800) c) Other operating income = -24 (was 698) d) Operating CF = 6,743 (was -6,141) e) Buy prop, plant, equip = 15,727 (4 new lines should be ready)
OPERATING CF turn to POSITIVE. GOOD JOB.
So basically drop in NP was impacted by the cost of sales (which is Gross Profit) as explained in QR. The rest of the expenses were very well monitored and controlled.
Below we can judge the short term impact on latex cost (with assumption if company order latex today, they will input into production 3 months later).
FQ2FY18 (May, Jun, Jul) For May, Jun & Jul material input into production, they used latex that purchased in Feb, Mar & Apr. So average monthly latex price for Feb (798), Mar (732) & Apr (640) equal to 3mth average = 723. So we can consider their ave latex input price for FQ2FY18 is 723.
FQ3FY18 (Aug, Sep , Oct) Based on the above, we might able to judge latex input price for FQ3 result which will be announced in Dec'17. Ave latex price for May (630), Jun (573) & Jul (517) equal to 3 mths average = 573 And it is a drop of 26% input material cost compare to FQ2.
If this calculation work, then we can expect FQ3 gross margin will be higher than FQ2.
So for FQ3 ( end-Oct) 6 new lines should be completed with 5 lines running full and 1 line under final inspection: Expect Rev = 125mil. Gross Profit = 17mil (14%)
"...For the first six months of the financial year, Comfort Gloves's net profit more than doubled to RM19.21 million, from RM9.4 million in the same period of the previous year. Half-year revenue was up 79.25% to RM208.3 million from RM116.2 million......"
Not to forget, glove selling price is bound to go up in tandem with latex cost recovery.
The volatility in gross margin apparently is only timing difference effect. A growing company like Comfort will not be impacted by such short term changes as long as their sales and production volume keep increasing.
Excluding the one time gain of insurance compensation in Q2 of previous year, the revenue and net profit is on a smooth uptrend . ROA and ROE is at the top end compared with the peers , but PE wise is one of the lowest. Net Profit Margin of last 4 quarters between 8% to 9%.
Balance sheet wise , borrowing is only 5% of total asset , liability is around 19% of total asset, It would be nice if cash of 14.5 million is slightly higher
Fund start flow to glove counters again as they expect TopGlove QR will be released around 10th Oct. Result expect to be 20%-27% up Y-Y in terms of Rev n NP.
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Posted by thenextwave > 2017-09-19 22:28 | Report Abuse
tomorrow open, i'm rushing to buy