Posted by stockoperator > 2014-05-30 17:37 | Report Abuse

Revenue Growth is good without incurring much debt or High capital expenditures. Better still is profit growth. The best is without sacrificing any profit margin. Is it any seasonally factor and cyclical factor? if there is, how do we smooth it out? Is cash flow growing at the same pace Or Receivable outpaced the growth rate?

So we are definitely looking forward to quality growth in the long run.

Posted by kcchongnz > 2014-05-31 13:00 | Report Abuse

Yeah revenue growth, earnings growth,the only holy grails in investing.

But allow me to pose some questions here:

A company with $100m revenue and $10 million in net income takes on an additional $1 billion in debt and grow its revenue to $500m, after interest costs, earns an additional $10 million, that will increase revenue and earnings by 500% and 100% respectively the following year.

Isn't that a high growth in revenue and earnings? But more importantly, is that growth good or not good, or so so lah?

Please give your substantiations to your answers.

Posted by inwest88 > 2014-05-31 13:51 | Report Abuse

Hi KC, will you be back sometime int he middle of the year. If you are. let me know. We go for some good food.

Posted by stockoperator > 2014-05-31 16:00 | Report Abuse

Hi KC it appears that some of expansion is not yielding expected results. It appears that some segment is lagging or even running at half utilized rate.

Such ambitious expansion is aimed at capturing Big market share fist even with low profit margin. That is How Dog fights. Once market share is captured, they will slowly increased their profit margin.

To me it appears that their plan to capture the market has failed and they are left with scraps to service their debts.

So expansion plan needs proper execution as you know you are using debt and your ROE is low.

Posted by stockoperator > 2014-05-31 16:24 | Report Abuse

Worse still if RM10mil net profit (which is only 1% of invested capital) is paper profit. And this invested capital is Debt.

Well, they survive this year. Congratulation.

Posted by stockoperator > 2014-05-31 16:42 | Report Abuse

Well even this business proposal is a toll road Business Or first generation power generation Business with all the downside protected and government guarantee, the guaranteed return of 1% of invested capital is Not desired.