Eratat Lifestyle

Saw on another forum to share

"Many people buy on the future promise that it will happen. But there is also a 50% chance that it won't happen. It is almost the same as going to a casino and buying big/small"

momoeagle wrote: Seeking a share buyback mandate is not the same as actually taking action to do it.

Getting the mandate is almost free for them, and a cheap way to reassure shareholders without actually doing anything else. As long as they did not do any share buyback, they didn't. They could but they didn't.

Well, just watch lol. They hv to buy.... it's a question of when.

Yet if they do, definitely there will be questions on the usage of their cash, to do share buybacks but borrow cash for working capital... That would be poor use of cash.

Don't make silly assumptions. If they can invest the money in securities or other means and make profits out of it to beat the interests, it is not silly. Example, buy at 10 c and reissue the same shares at 25 c via the exercise of the warrants. Go calculate how much profits are made. The bond interests are just a fraction of the profits lol.

In page 4 of their bond Warrants announcement, the key word is parking some of the proceeds in "marketable securities". What marketable securities can they park their money in, other than their own stock?

Pending the deployment of the proceeds for the purposes mentioned above, such proceeds may be deposited with banks and/or financial institutions, invested in short-term money markets and/or marketable securities, or used for any other purpose on a short-term basis, as the Directors may, in their absolute discretion, deem appropriate in the interests of the Group.

Do note that the treasury shares can be used for multi-purpose such as rewarding their performing employees share options or rewarding sales incentives in the form of shares instead of cash to distributors in the future.

Also, new shops opening does not guarantee increased sales (if any) will cover the bond interests. It is like someone going to open a new shop in a shopping centre, and immediately expecting sales and profits to come in just from opening it and putting inventories in.

If there are more shops, it also means that the distributors will have to increase their book orders for the coming season. And, that is a revenue recognised and to be earned by Eratat from the distributors. How well the distributors can sell and how fast the distributors can clear the inventory is another separate issue. With more shops, more book orders needed to fill up the new shops with apparels and hence, more revenue for Eratat. It is so logical. Furthermore, some new shops are located in new, untapped cities lol. Note that Eratat does not take back any unsold inventory from the distributors.

Lastly, market sentiment improving, or year end rally (if any), doesn't mean Eratat can recover its price. Throughout a whole bullish 2013, where market sentiments were generally good, Eratat went the opposite direction.

Ya. Past year result may not be a reflection of future. But do note last year 2012 around sept and oct, Eratat was also hovering around 7-8 c. After the Q3 and Q4 result were out, it eventually rose to 15-16 c by 2013 Feb.

And, from March onwards till Oct, STI went sideway up and down, without a clear direction. so, 2013 wasn't really a super bullish year since STI has corrected from its 3300+ peak down to 3000 in middle of 2013. so to say, Eratat gg down in a bullish 2013 year is not true when 2013 haven't really been bullish yet for STI.

If u bough last year at this time in sept-oct 2012 and sold in early to middle of this year at the peak around 14-15c, you will have made quite a good profit out of Eratat. The chart pattern looks similar and likely to repeat again. Furthermore, Eratat is stronger this year than last year, both financially and expanding.

Ya. I do think the share price will recover by year end/early next year. so i think this is a good time to buy. so watch n see but don't quote me if it doesn't.

All in all, see no links....

Momoeagle, the link is there and stop making ur own assumptions. More shops, more orders needed and hence more revenue. It's so logical.

Many companies call for share buyback mandates, and do not necessarily buy their own counters.

"Well, just watch lol. They hv to buy.... it's a question of when."
We can watch whether they do a buy back. They do not have to buy, and it is not a question of when. The question is why and not when.


"Example, buy at 10 c and reissue the same shares at 25 c via the exercise of the warrants. "
That is if the warrants get exercised. You are bringing in too many ifs and future assumptions into your investing philosophy.

The links made are mostly on the basis on future assumptions.


"If u buy last year at this time and sold in early to middle of this year at the peak, you will have made quite a good profit out of Eratat. "
Hindsight is 20/20. Applies for every single stock, so no link again.

Then again, if it is about charts and technical calls on this stock, I have no further comments.


"More shops, more orders and hence more revenue. It's so logical."
That's not a logical assumption at all due to too many factors involved. You can't make these assumptions without a ceteris paribus declaration on so many different factors, which ultimately is becomes over simplifying it.

Worth the risk.........

oredi bought, hv you?

Thumbs up, chinsoonyuen.

chinsoonyuen wrote: oredi bought, hv you?