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$ValueMax (T6I.SG)$ This stock has a high trade receivables ...
This stock has a high trade receivables and negative cash flow generated. The trade receivables is ever increasing on a yearly basis. It has a weak cash balance of $15.9 million. Will the customers default on payment? The overall cash flow is very weak. It has a high bank debts of $636.4 million. The company reported high net profit but not able to collect cash from the earnings. This is a red flag. Trade with caution.
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101572862 : thanks
.. in deep analysis helps to save our Penny's .. thanks for sharing ... appreciate your effort.
Deep Sea OP 101572862 : NP
102167235 : Nearly fell off my chair. If speculating or trading, anything goes, draw some lines, and place your bets.
If investing, do spend time reading about the business and how it actually makes its money.
Value Max money lending segment is only ard 14% of the business and the sums borrowed to each individual is very very small, the non performing loans are low. Main segment is pawn broking / trading. To answer what happens if the customer does not pay/ redeem its item? Easy, the pawned object will be sold for a higher profit than what they would make if the customer redeems it. Even better if it is gold as gold prices have been hitting highs of late. So their existing inventory of gold would be worth much more the longer they hold on to them. (the opposite can be true as well). The higher receivables, when seen together with nett positive change in asset value as well as other indicators, reflect a growing business/growing profit. Much like banks, cash is kept at the bare minimum to maximize profit. But unlike banks, when customers dont redeem/pay up, VM actually makes more.
Cocomelolon 102167235 : Totally agree
benson85 102167235 : exactly...his analyst maybe true for some manufacturing company but not for bank and finance company...deep sea, Ur analyst is AI generate script is it?
Deep Sea OP 102167235 : High receivables are not seen as positive. They should have reduced their inventory and get back their cash to strengthen their balance sheet. It’s a fact that their balance sheet is weak with low cash balance. There is negative cash flow which shows no cash being generated from high profit as reported in their financial statement.
Deep Sea OP 102167235 : It seems like u don’t even look at financial statement and find out their problem.
Deep Sea OP 102167235 : Take note that it’s not so easy to sell gold jewelleries, rolex watches and other branded bags. Don’t sound as though it’s easy. Valuemax is not the only company selling these items. There are so many other jewellery shops and pawn shops competing to sell.
FrenchConnection : Thanks. I also noticed that it seems to be held by a family. They may look after each other, rather than after general shareholders. You cannot trust the insiders.
Deep Sea OP : The CEO and his family bought the short term notes raised through the private exchange and earned the interests from the company. If the company is making so much profit, they should have a lot of cash generated from the profit and don’t need to raise short term money from private exchange.
How did they pay out the dividends to the shareholders? Through the cash flow? No. Through cash on hand? No. The cash on hand is needed for general working purposes. Dividends is paid out from borrowed money.
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