Salute : 4 weeks range : 0.795-0.985 Salute : 1 Year range : 0.278 -0.985 Salute : IPO price : 0.80
Those who buy Salute when there was a huge price correction/drop to 0.30 from its IPO price at 0.8, have a good foresight, and able to buy into a good growth stock. This is similar like AT now at 0.07 - AT is an automation company, next year, automation will rebound, those who buy into AT now at 0.07, have good foresight too.
Those who buy Salute at 0.90 ++ , believing that Salute will shot beyond 1, clearly has been disappointed. Why ? Why , Salute can't goes up above 1 this Quarter ? very simple, due to a lot of contra players / new investors/ existing investors are all worry that this coming Qtr to be release result on Nov 26 time frame, might NOT be good.
Salute is a good growth company, but this coming Nov 26 result, the financial results might not captured the new orders that has been received from Customer A.
Buy into weakness of Salute, but not buy into a high of Salute... That's what make a good investors.
Those who have holding power, pls hold Salute Those wanting to enter Salute, wait for the Nov 26 results, before you decide. After all our hard earn money, we really need to stay safe.
Stay safe everyone in your journey to financial freedom.
Total revenue for the first quarter ended 30 September 2019 was RM32.3 million, a drop of approximately RM24.4 million from RM56.7 million in the preceding year corresponding quarter. This was primarily attributable to the lower sales volume from the current running products and the new generation headsets. The forecast volume for the new generation headsets have increased but order fulfilment is constraint by material lead time. The situation is expected to normalise in the next quarter.
There were several new project developments in the pipeline that have yet to generate revenue but have already contributed to the significant costs increased in the current quarter. Amongst others, were spending on travelling, new production line setup, product development costs, hiring of new indirect headcounts and increased fixed costs due to upfront capital investments totalling approximately RM0.7 million.
I repeated many times don't expect drastic improvement in profit. The qtr report clearly show the company require times for profit recoveries, few months new orders production not sufficient to show immediate profit, this is the reality of the business. Q2 onward for actual entire 2020 production will be better when the new orders obtain sufficient volume of sales. This round should flush out short terms traders.
Disappointed with the results. Was expecting profit for 1st Qtr. However, the MD told us not to look at ST but look at the medium to long term horizon. This qtr result does not include the mouse sales for customer A due to delivery lead time but will be captured in next qtr results. They are bullish on Salute's future and over the last quarter have hired 20 to 30 additional engineers to bring the engineers headcount to around 50 to cater for the incoming and potential future business.
The revenue of RM32 million is double that of RM16 million of the preceding quarter.
The unexpected loss for the first quarter is due to increase in development costs which is written off as an expense instead of being capitalised and then amortised against the sales of the developed product.
This means that cost is charged in the current quarter and not pro rata against sales of the product in the next quarter.
This really means that cost is overstated for the current quarter and will be understated in the next quarter when revenue is generated from the sales of the product.
Despite the 'loss', the company is still in a position to declare dividends of 0.6 sens per share.
The play on Salute is therefore a play on next quarter performance.
Based on the recent marginal loss QR result, if sb is selling, he will loss the opportunity to tackle the probable profit in the next few QR. Even if he sells, potential buyers already standby to buy in as the potential is good.
In stock market those who have the precise insider information will take the advantages. Like in Salute, sb had the precise insider information so they could buy at the cheaper price in advance. Public in large will only can buy at 'median price', that is the reality...
I do agree @upsidedown that the cost for the future revenue need to be capitalized instead of w/o to Profit and Loss account, probably the management would like to show Sui Sui financial report in the next QE
There are no such practises for pro rata of staff salary and sales from production. Reading qtr reports has to be realistic, new orders will always has new production lines cost, materials cost to be recognised then follow by production and logistics cost before sales recognized that can be declared as receivables. False timing expectation distort logical assessment.
'Prospects The Group together with its European design partner have set a clear technology roadmap to embark on hearable devices with focus on micro-electronics encapsulation and miniaturisation. It is important that the Group have set this strategic roadmap to ensure continuity in terms of innovative product offerings to the market, highly capable resources and high end processes to successfully adapt to the challenging development of miniaturised products that can incorporate additional components for wider applications. In this regard, the Group have scouted critical talents to help bring the products from development stage to mass production stage within the shortest time possible. In the meantime, the Group is diversifying into non-headsets products and broadening its customer base. The Group will continue to be mindful of its costs management and be prudent in its spending and expansion plan. Premised on the above, the Board is of the view that the Group’s prospect is favourable. ' =============================== The above prospects may support the share price to a certain extend.
'(Loss) / Profit Before Taxation (“(LBT)” / “PBT”)
The Group’s LBT for the first quarter ended 30 September 2019 was RM3.2 million, a decline of RM6.2 million from PBT of RM3.0 million in the preceding year corresponding quarter.
There were several new project developments in the pipeline that have yet to generate revenue but have already contributed to the significant costs increased in the current quarter.
Amongst others, were spending on travelling, new production line setup, product development costs, hiring of new indirect headcounts and increased fixed costs due to upfront capital investments totalling approximately RM0.7 million. ' ====================
1). New Production line setup 2). Product development costs 3). Increased fixed costs due to upfront capital investments
Based on the wording, without further detail, I would classify these 3 types of costs belongs to the new product(s) and should be capitalized if there is no sales on the NEW product(s) unless the NEW product(s) is NOT successful.
Salutica main sales were from sony and jaybird from 2016 and 2017 when the profit peak then profit drop till lost thus the share price respond accordingly. The new headsets success and mouse are catalyst for profit recoveries, a reasonable expectation from new orders start setup then productions till delivered to client follow by sales recognized is 6 to 9 months thus any meaningful profit should between 6 to 9 months from July 2019 when the headsets and mouse first order. The 2018 q4 and 2019 q1 report seem to indicate there are more new orders for new product ongoing development these whether are profit growth will be something to be monitor.
@human. It is cost accounting practice to account production cost to the cost of the product and and not period costs like Admin overheads.
Production cost goes into work in progress as should development cost.
The cost in work-in-progress is charged off as unit cost of producing that product and ends up in the cost of finished goods inventory.
Unit cost of the product is arrived at by dividing cost of the finished goods inventory by the total number of the units produced.
The unit cost is then charged off to sales based on the formula: Cost of good sold = unit cost X number of units sold.
Therefore if Salute charge off product development cost during the period of the development of the product, it would be wrong.
Unless the product is not successful and development of the product was aborted. In which case there should be a note to the account.
But there is no indication that the product was not successful. In fact the indication was that the product was ongoing, has not yet generate revenue but already "contributed to significant costs in the current quarter".
One of the significant costs already contributed was "development cost".
This should not have been charged to current period i.e. current quarter cost but capitalised as Product Development and amotised to Finished Goods Inventory cost as the product so developed is produced.
In fact "indirect labour" due to increase in head count for the development of the product should not have been charged to period i.e. is current quarter costs but charged to product development costs and capitalised.
Salute management should be questioned as to its accounting policies on this.
The fact that the company is able to pay dividends and the large size of its cash and cash equilvalents indicated that the company's cash-flow is under no stress.
@119, salutica do not had such practise in past qtrs, cost deployed and sales recognized are records at time of such happen, thus their qtr reports expectation are to aligned to such practises.
Pro rata basis has lots of retrotracking. When future sales do not match actual production and delivered number, then management has lots of explaining which is not good for reputation.
@human. You don't seem to understand cost accounting. So its no point discussing this issue with you further. E.g. if Salutica did not has such practice in the past, then it would help explain the fluctuation in profit.
@119 you seem too eager to justify your missed expectation of salutica. I understand how many things work. I point out how salutica reporting works based on how their business works and their past reporting practises, yet you insists a company business and reporting are done based on your own interpretation not how the owner operate and manage the company all along. False expectation lead to distort assessment. Understanding listed company reporting practises and owner business management habit are practical and realistic method to conclude proper expectation.
Wow! A lot of people tried to justify the loss but never think about the mouses manufacturing business is super competitive and why no factory produce in Malaysia.
0.006 dividend. lol... Only time will tell. But different thing can be right or wrong at different time. Suit your own holding power and, most importantly, development of macroeconomy... Don't focus too micro to lose the big picture...
@119 We are discussing a topic of salutica business performance and practise of qtr reports. The focus is topic not person. When did I talk about who made or lost monies in salutica? This uncalled personnel attack is unacceptable and will be reported.
@human. I quote you: "@119 you seem too eager to justify your missed expectation of salutica". You made innuendos about why I posted and then a further very unhelpful innuendo about "false expectations".
In short, you disguise your personal attacks with innuendos that are not only misleading but bordering on being insulting.
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....
human
214 posts
Posted by human > 2019-11-18 10:34 | Report Abuse
Agree. There are many newcomers now and then to stock market, well informed investor will make the market more mature.