Genetec, a local company that doing business related to electronic vehicles (EV) has its very great prosperous year. If we look at its 6-months stock price performance and compared with Tesla, Genetec’s stock returns is actually outperforming the American EV manufacturer as of 29 Oct 2021
Genetec also announced its stunning quarterly financial report (2Q) and proposal of bonus issues on 25 Oct 2021. If we look at its PL statement, we may get very excited, as the Y-o-Y net profit grew almost 4-times! However, if we look at its cash flow statement, it is rather disappointed. As of 30 Sep 2021, Genetec has minus operating cash flow RM 63 million.
This minus operating cash flow is mainly due to the trade receivables RM 99 million sitting on the book as of 30 Sep 2021.
(Source: Genetec’s Quarterly Financial Report as of 30 Sep. 2021)
As the accumulated YTD revenue as of 30 Sep 2021 was RM 99.591 mil vs. Trade receivable RM 99.159 mil, this indicates that Genetec did not collect most of the money from the customers over the past two quarters.
(Source: Genetec Unaudited Quarterly Financial Report 30 Jun 2018 ~ 30 Sep 2021, the Street-Analyst’s estimation)
The interpretation of this diagram is the higher ratio means the faster collection of receivables. In 30 Jun 2020 and 30 Sep 2020, the company seems had the same collection pattern in the period as the ratio dropped below 0.9 and 1.0. The latest ratio as of 30 Sep 2021 is 1.0, meaning that 2-months of revenue is not collected. Not sure if this is due to the covid-pandemic impacts.
I tried to email Genetec’s IR for this inquiry however did not receive any response at the point of writing this article. Based solely the analysis here, we also could not make any conclusion. Hopefully the next quarterly financial report and audited annual financial report can bring more clearer picture.
In a business, there are many scenarios will do the same situation, such as:
A lose credit terms provided to the customers The customer has cash flow problem Fraudulent accountings etc. No matter what the reason is, without any cash inflow, a company will face working capital problem to continue run its business. Subsequently the company needs to raise borrowings, or new capital injection. In the case of Genetec, it can also exercise stock options to issue new shares.
Furthermore, when a company could not recover their trade receivable from the customer, in accounting, a bad debt accrual or written off due to bad debt will be post to PL statement. Hence lower its earnings in the subsequent quarters.
As mentioned by the Genetec in the past annual report, its revenue is derived from two major customers, there is a rumor in the market saying that Tesla is one of the them. If it is true, I am just curious whether Tesla has no money to pay Genetec. Just a joke!
From start to end people never told u that tesla is their customer , USA got many rojak EV company also , only your own talk n belief makes u feel good ! When i see the news 12: 1 BI , I cash out already , must remember top glove n heng yuen history will repeat !
their sales figures equal to their trade receivables , if based on first in first out logic, then no money collected for this year , if the customer default their payment , the company may have the risk of wind up as their customers only focus 1-2 only. Also their debts keep increasing , unless products margin is super high to compensate the credit risk or no one will do this type of business .
Posted by 1035834 > Nov 15, 2021 3:12 PM | Report Abuse
their sales figures equal to their trade receivables , if based on first in first out logic, then no money collected for this year , if the customer default their payment , the company may have the risk of wind up as their customers only focus 1-2 only. Also their debts keep increasing , unless products margin is super high to compensate the credit risk or no one will do this type of business .
the TSLA hypes hv reached its peak. Probably the next 10 years huge EV growth potential will bring this counter back to its ATH @ 50. Don't need a rocket scientist to see the daily downtrend now
BI ex date will further dilute the share value. Are u expecting the rise like previous daily uptrend when there are 13x increase from current NOSH? More retailers joining the party and volatility level will be higher. God bless :P
Those that bought from 35 onward better cashout to salvage your earning. Ain't u seeing your peers from 40ish got burnt chasing the TSLA dream. Talking bout Hold The Line, Malaysian investors is not like W/Strbet @ Reddit :P
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i3lurker
13,956 posts
Posted by i3lurker > 2021-11-15 13:05 | Report Abuse
are those EPS maintainable or was it one off?