younginvestor92

50% speculating, trying to predict this year's free cash flow, predict company will pay the debt and facts that is all in annual report

2016-10-06 15:48

Jian Bin Siew

For me, the above is a good article. I will consider to buy after reading.

2016-10-06 22:05

Jian Bin Siew

May I ask a question, if company is using the money to repay the loan, does it means it is not considered as earning? Else, why the eps for a quarter is around 0.5 sen only? Tq.

2016-10-06 22:07

paperplane2016

Yeah. But no moredebts

2016-10-07 01:13

paperplane2016

Another 5 yrs if cash flow also consistent like this, can buy one small casino liao

2016-10-07 01:15

cheahsk

Dudu, can you please explain how you achieved a FCF of 41389 from AR 2015. I understand FCF= net cash from operation(509290)- PPE(23888)+proceed from sales of PPE(2070)=31111 and not 41389. Thank you

2016-10-07 10:21

dudu

Cheahsk, FCF has few methods of calculation. To decide which method to use is base on your own analysis purposes. For me, I will ignore the changes of working capital(Receivables + Inventories + Payable) because total amount of these 3 items will go plus & minus , year by year eventually the net effect is almost = 0

2016-10-07 10:58

Siew Jian Bin

But if I take EPS, RGB is around 12 based on 2015 earning. Even if I take first half of 2016 and annualise it, it still around PE of 10. Is it realy cheap? I am not familiar with FCF, actually how we use FCF in calculating the company. What does it means if FCF is high? I know it means more free cash, but is it more important than Profit? Too many questions in my head...

2016-10-07 14:56

aaroncjs

take a look at lonbisc, PE 7... Profit is good..But why is it still keep dropping? FCF is the answer!

2016-10-07 15:19

dudu

Profit is just like temporary paper gain in accounting system.
FCF is the real earning where real money inflow.

2016-10-07 15:42

Jian Bin Siew

Tq. Dudu, how much u think RGB worth?

2016-10-07 21:05

dudu

Jian, RGB can consider as a long term investment counter. As long as it's business is on the right track, it will continue to create values. Previous years, we noticed that profit grow is a bit slow, but this year 2016, 30 percentage profit grow is projected based on current business progress. Growing speed will accelerate even more in 2017, especially 2018.

我无法预测RGB未来股价能去到多少，或是股价什么时候会起，因为这是没有意义的。我们应该深入研究RGB的盈利未来会不会增加，或有没有前途。

我放上冯时能冯老先生的教诲。。。。
冯时能 ：股票的价格，是跟公司的盈利成正比的。就是说当这个公司的盈利一直上升的时候，股票的价格迟早会跟着上。当然有时候时间上有差别，但是如果这个公司的盈利是一步一步上升的话，这个股票迟早会跟着上升的。所以与其去预测这个股价什么时候会起，不如研究这个公司的盈利会不会增加，或有没有前途。如果有前途的话，你低价的时候买进，拿着它作为一个长期投资，你赚钱的机会就很高。

2016-10-08 10:38

Benjamin_8888

有道理 dudu

2016-10-08 10:47

VenFx

Biz nature are much easier to understand.
Excellent balance sheet that can ride on and prevailing any storm .

2016-10-08 10:52

VenFx

Dudu, keen on for your next article for your QUALITY PICK .

2016-10-08 10:54

aaroncjs

strong cash flow --> more bullet for more/bigger business expansion/investment opportunities --> higher topline/bottomline growth
strong cash flow --> lowering debt interest/increasing interest income
strong cash flow --> increasing dividend payout --> higher dividend yield --> strong support base for stock price

2016-10-08 12:07

dudu

Benjamin，VenFx，这股还有很长的路要走。公司的盈利绝对是一步一步来的。不像其他行业，盈利可以一下冲上来。目前分析的只是账面情况，strong finance position 是投资基础，底线是不会倒，让投资者安心投资。目前投资卖点只能说是从坏变好。更重要的还是要分析公司接下来这几年的业务发展，到底能够走多远。还是保持现状？我也还在收集资料中。。。。

2016-10-08 15:17

Benjamin_8888

谢谢你的分析

2016-10-08 15:29

yhchan1976

DUDU, really a good article with depth in analysis. Expecting you next article on RGB

2016-10-08 15:55

kcchongnz

Good article.

Should change in working capital be included in FCF?

Free cash flows means what it really mean; the net hard cash inflow/outflow after capital expenses. That also includes the need for increase in net working capital.

For a going concern, especially for a growing company, there should be overall increase in net working capital over the years, not necessary increase every year, but a trend of increase.

A growing company requires to increase its material purchases, inventories, more money to fund those payments first, before a company produces the goods to sell and then collect payable.

Ignoring change in working capital inevitably overstates the amount of free cash flows, and hence the value of a business.

2016-10-10 07:38

Ven Felix

Wow, really love thus kind of atmosphere. I can learn fromDudu and kcchongnz .

2016-10-10 08:44

VenFx

谢 dudu 大, 的 好评好股 。

2016-10-10 08:53

dudu

Thanks for kcchong's advice. Including the change in working capital into FCF will finally make you more confuse & make wrong conclusion when analyse company actual FCF status.

Inventory, Recevable and payable may have big change each year. Including these amount in calculation will finally show inconsistant amount of FCF each year. In other words, the FCF amount you calculate will show big vary each year.

When this happened, it is confusing to analyse FCF for such campany. The actual company's FCF performance is hidden behind by using this method. The only way you can do is to average up pass few years FCF.

When doing average up, actually you are aware of the inconsistant of the change in working capital. The average of "change in working capital" each year, plus & minus add up will eventually go to "0" or increase just a bit as you mention due to company grow, need more inventory. The raw inventory grow each year will be small significant.

When do averaging, it is more inacurate methode due to pass 5 years FCF is far different from now. More over you can't even see the trend of FCF increasing each year till todate. Whereby the increasing trend of FCF is the most important to access a company performance.
13/10/2016 08:15

2016-10-13 08:24