I attended the result briefing today and will be contributing an article to Next Insight summarizing CFO Francis Lee\'s comments/answers on the result. Overall despite their \"cautious outlook\" adopted, I sense the Q4 result should not be too different from Q3. Their business model is working and they are definitely getting market share from others. It would be interesting to compare it with HTL result later this month. Given their strengths, they will continue to deliver and there is no way their share price will stay at current level for long...the question is when it will move.
It is disappointing to see the analyst in OCBC who has followed Man Wah for so long can be so wrong in the profit growth conclusion: Excluding one-off gains, we estimate that earnings would have grown by a smaller 10.2% YoY. The Other Income item in fact is lower this quarter YOY because of lower exchange gains net of fair value adjustment for derivatives. Ignoring these would give a HIGHER profit, not lower. Even if I only count the one off item of change in depreciation policy, the earnings would have grown by a LARGER 26% YOY. Ignoring ALL one-off items, this figure would even be higher than 26%! OCBC need to re-issue a corrected version.
www.ocbcresearch.com/Article.aspx?type=r...20090212100546_71269
Not the first time that these analysts have boo-boo. Just take a look at the analysts in the industry. Young and totally no experience in running a business. Some just graduated! Who gave them so much authority as to decide whether a company is good or bad by simply looking at numbers. Management guided 50% in revenue and profit and these analysts just put that down in their reports, don\'t even bother to question the validity of this growth. When I get a research report from my broker, I usually look at who is the analyst writing the report. If these analysts are the young inexperienced ones, I just throw the reports aside. Waste of time.
Still you can;t argue with the fact that Man Wah has defied the odds again. They are in the consumer discretionary and housing related..two of the worse segments in this downturn one could possibly be in and yet they still outperformed...even their shares have held on pretty solid (relatively speaking).
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