Agreed with topseeker.... Success has not been making any negative profit from the past years although their debt is slightly on high side. A counter worth to keep for long term...
When the quality of earnings is so poor not just one year, but every year; when there is no free cash flow from the operations, not just one year, but every year; And hence borrowings keep on going up every year; one may want to ponder if they really make that much money as reported.
kcchongnz.. where else can you find a profitable pe 4x company in KLSE other than those dodgy china based ones. Success owns Seremban engineering bhd which is doing lots of OnG jobs right now, which is sucking the capital hence no free cash flow.
Success should at least garner at least pe 8x... similar to other counters of same standard. PE 4x is wayyyyy too cheap for a profitable and growing company.
Sure, success has been successful in increasing its revenue and earnings for the last few years. Operating efficiencies in ROE and ROIC are also good, comfortably above the cost of capital.
However, it is just my personal preference. I like FCF. If there is no free cash flow for a year or two because of growth, it is ok with me; but not consecutively for 4 years. Just personal.
Yes understand your viewpoint.. FCF is important, but we have to see the whole picture.
With poor FCF, I forsee there will be a minimal dividend for years to come.
But I like their aggressive expansion into Indonesian lighting market..their ability to compete against local and Chinese manufacturer with healthy 10% net margin is a good sign.
This book is the result of the author's many years of experience and observation throughout his 26 years in the stockbroking industry. It was written for general public to learn to invest based on facts and not on fantasies or hearsay....
den87
25 posts
Posted by den87 > 2013-09-20 00:31 | Report Abuse
it is posted from their FB. this was what they posted.