went up 3x compared to last year, this is crazy. RM127m Trade receivables. Negative cash flows from operating activities. Am learning how to read the financial report, correct me if I am wrong, impairment of trade receivables at RM86,043,000?
China is said to be shunning away seafood purchase from Japan if Japan decide to release the treated Fukushima power plant radioactive water into the sea. If that happen, China will need to buy from elsewhere. Could Malaysia supplies be increase due to this?
1. PTR has just announced its 4Q financial result. Upon closer examination and scrutiny, one would notice that the accounts receivable of PTR has horrendously escalated from 43.1m to 127.1m
2. The company recorded a revenue of 501m. Therefore the Accounts Receivable Collection Period is [127 / 501] x 365 days is 92 days
3. In general any company would aspire to collect its payment as quickly as possible. Competitively a 30-day collection period would be desirous. 45 days barely acceptable. 60 days unthinkable and 90 days suicidal
4. The fact that PTR collects its payment 92 days after its delivery reflects poor credit control and inefficiency. If the condition is allowed to prolong and remain unresolved, it would have disastrous impact on cash flow and working capital. In addition, the provision for bad debts and potential write off is realistically expected in the future.
5. Already, despite its remarkable and commendable profit performance of 18.6m, PTR regrettably generated a negative cash flow of 10.8m
6. Hence, it is not entirely wrong to say PTR has a loose credit control policy and an inefficient and tidak apa attitude in its collection effort
7. It would be more damaging if the exceptionally long collection period is coming from bad customers in a cash trap situation arising from PTR's hot pursuit of revenue growth and geographical expansion into China.
8. The accounts receivable has ballooned and the minority shareholders are alarmingly concern. More stringent credit control and collection effort is highly appreciated Happy trading 7/7/23
1. Noted your dissenting view yet polite and friendly in nature. Allowed me to express further. The fact that PT has accounts receivables that has ballooned from 41m to 127m clearly indicated that to a significant extent a considerably huge portion of the sales were done on credit term.
2.My belief is further supported by the notes to the accounts in the company's performance review.
3. According to its notes to the accounting on performance review B1.(i) there is an increase in domestic demand by Rm10.1m and B1.(ii) there is an increase in overseas demand by Rm62.5m or 215.1% which was mainly attributed to the increase in orders by existing customers in China following the gradual re- opening of China's borders.
3. In the final quarter, revenue has increased by 10.1 + 62.5 is Rm72.6m 4 And accounts receivable has increased from 41m to 127m that is Rm86m
5 This illustration with all the numbers extracted from PTB accounts evidently demonstrated that sale are done on credit term.
6. The numbers are alarming. The management knew it. And they probably might have formulated strategy and policy to rectify and improve the sales collection.
Many investors are unloading heavily, because they are not comfortable with the shot-up of account receivable amount, and also the +ve cash flow phenomenon, they think the situation is a bit similar to early days of Serbak dinamik that increased account receivable was in tandem with Revenue increased and deteriorating cash flow
imho Food supply/export business - audit factory production rate, custom export My/Import Chn can get info lor...vs Serbadk - project base AR (hmm bit hard)
This counter is dangerous 1) Receiveable shoot up 2) director and management never answer email and call to Kuantan and Kl offices 3) Accountant Ong Wen Qin and the old company secretary resigned 4) New accountant 28 years old also young, easy to "handle", possibly lack of society experience... ...
When the boss is frequently reluctant to meet investors .., we must be more cautious about his counter... Furthermore, resignation of CFO should make us more suspicious on its accounting prudency ...right ?
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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....
Johnchew5
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Posted by Johnchew5 > 2023-07-02 20:51 | Report Abuse
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