Qingmei

nervy
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11 years 6 months ago #12016 by nervy

Replied by nervy on topic Re:Qingmei

Curious to know as to why its trade receivable outstanding is higher than its sales turnover?

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cstan
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11 years 6 months ago #12021 by cstan

Replied by cstan on topic Re:Qingmei

The receivables are high relative to sales probably due to delay payment by the companys clients who are facing cashflow problems during this market slowdown and high inventory because of slow turnover in the downstream business.'
It is therefore important for qingmei to maintain liquidity (cash) and cut expensese and no dividend payout. Goging forward, I believe the company will show higher level of doubtful debts/bad debts. Let's hope the market conditions will improve in the next couple of quarters and qingmei will emerge stronger while the smaller and weaker players are phased out.
For one I don't believe in the rubbish from the mainland reporter who said the company had disposed of its machines and closed down:
1. Who would be the machines when the most are struggling to survive?
2. If the company has closed down few months ago, it would have to retrench all its workers and staff, including the directors and senior managers. News would surely spread. How can they keep it a secret for so long? Are the directors not under the company act required to report such significant event?
3. Not surprised that the company did not respond to the report as it is wise not to comment on rumours. Action is much stronger than words and so the 1QFY13 has just been published which really looks quite decent albeit some small loss.
I have not problem with all these. Also, the company's outstanding shares amounts to about 680 million but the avg quarterly trading volumn is only about 8 million. Acually not many investors are selling.
Give qingmei a break and wait for its recovery. Hope I am not wrong.

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Norman
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11 years 6 months ago #12024 by Norman

Replied by Norman on topic Re:Qingmei

It's lousy reporting as it didn't provide verification of the various things mentioned in the report. But looking at the 3Q results, I can imagine what really took place : with sales plunging by so much, clearly the manufacturing operations would have to be shut down significantly. Imagine a few days of no-work a week, or half-a-day production a day. The affected workers would be yapping about the situation and some joker got interviewed and came up with this line about the machinery being sold off. Again, the reporter didn't provide any verification of this.

But bottomline is, Qingmei is not having a great time. whether it's worth buying its shares at 5 cents, it's up to your risk appetite, your time horizon, etc. I'd rather buy other S-chops such as Eratat Lifestyle. just my 2 centts' worth

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Peng Hock
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11 years 6 months ago #12028 by Peng Hock

Replied by Peng Hock on topic Re:Qingmei

I will not be surprise even if the CEO had instructed to sell some of the machinery as well as terminate some of the workers (i saw a huge drop in administrative expenses)
why? because if your production drop more than 80%, why will you want to keep those machinery? those machinery will depreciate too and you need $$ to maintain them too..
it's better to sell them if the management can foresee no utilization for coming 1-2 years..
and like the China report, the management had rented out the factory space for rental.. well, it also make sense since no point leave the space there for air..
if i stil hold some lots of Qingmei, i will hold it.. don't bother to throw any more $$ to average down.. if one day it comes back.. good, else just write it off..
cash money should be used for other much better quality with visible potential where you have more confidence..

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Azzaramich
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11 years 6 months ago #12035 by Azzaramich

Replied by Azzaramich on topic Re:Qingmei

Unlike Singapore, most workers in China manufacturing sector (sportswear included) are migrant workers, who are paid daily or piece rate. It is not uncommon for factory to downsize and let go the workers. I am sure you have heard of stories about migrant workers returning to their hometown in huge numbers from China southern provinces during this downturn.
The sportswear industry is still undergoing consolidation. There is still no light at the end of the tunnel yet. Many brands are closing down the shops like crazy. I am not sure if some big boys will go bust during this downturn.

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CS
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11 years 6 months ago #12039 by CS

Replied by CS on topic Re:Qingmei

The sportshoe industry in China is certainly facing a severe winter. This is the first time that I have read about a company (Qingmei) reported a 85% plunge in its sales.It is probably good for the company to get into hibernation, retrench its workers and keep only those necessary to run the business in low gear. Selling of it's machine is unlikely as the financial statements did not show significant changes of fixed assets. Further, if they want to rent out the place, they need to clear the machine first and maybe it is not wise to rent out the factory in case the market recover in the next few quarters. The recent reports coming from china showed some signs of improvement in it's economy right? The huge cash balance is just the thing it needs to tide over this difficult period. I strongly feel that if someone in the company wanted to cheat, he could simply take the RMB600 million and run away. Why take the trouble to sell machines and rent out space and even prepare the 1Q FY13 financial statements? Ha ha..... I think up to now I still trust Mr. Su. The bad market conditions are simply beyond his control. His wealth must have plunged to bottom if Qingmei is the core of what he has.[img]plugins/editors/jce/tiny_mce/plugins/emotions/img/smiley-cry.gif[/img]

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