Not so popular
FY08 results analysis
This is just a brief analysis of popular. Time is too short to analyse too much on a company that I think does not constitute a good business. The report comes from here.
Turnover went up higher in FY08 than FY07, but gross profit doesn't follow through. In fact, gross margin fell from 17.1% in FY07 to 15.3% FY08. However, net profit margin increased slightly from 2.9% to 3.1%. They mentioned that the increase in turnover was mainly attributed to their retail and distribution business, due to more outlets opened in Singapore and M'sia.
Some important business news - they closed down their two english-learning schools and discontinued their school franchise business in Taiwan to minimise the risk and losses given the shrinking Taiwan economy and increasing credit risk in distribution industry. I did notice that their provision for doubtful debts increased from 155k to 370k in FY08, an increase of 1387%. They seem to do better in HK, where two of their pre-primary textbooks were adopted by schools, thus capturing a good market share to sustain their dominant leading position. More discounts were given (hinting you the strength of their pricing power) and more money spent on marketing their books. I think they should continue their pre-primary textbook business. I believe that based on Singapore's strong pre to primary textbook branding, they will do very good in this aspect.
Net margins, though improved slightly (might be just the usual business fluctuations, rather than real improvements), are still very low at around 3%. ROE improved to near 10% though. While current ratios seem healthy, their total debts to equity actually increased. We can see that their cash flow statement shows negative net cash from operating activities, negative investing activities but very positive cash flow coming from financing activities. Looking at it more carefully, there is an increase in long-term bank loan to the tune of $52,267,000 for their new property business. That alone constitutes a huge part of their cash/cash equivalent for the period.
Popular gave a dividend of $0.012 (tax exempt) in total this and last FY. Given last closing of $0.270, that's a dividend yield of 4.44%, constituting a payout ratio of 40%. PE (based on FY08) is 9x.
Stumble it!
This is just a brief analysis of popular. Time is too short to analyse too much on a company that I think does not constitute a good business. The report comes from here.
Turnover went up higher in FY08 than FY07, but gross profit doesn't follow through. In fact, gross margin fell from 17.1% in FY07 to 15.3% FY08. However, net profit margin increased slightly from 2.9% to 3.1%. They mentioned that the increase in turnover was mainly attributed to their retail and distribution business, due to more outlets opened in Singapore and M'sia.
Some important business news - they closed down their two english-learning schools and discontinued their school franchise business in Taiwan to minimise the risk and losses given the shrinking Taiwan economy and increasing credit risk in distribution industry. I did notice that their provision for doubtful debts increased from 155k to 370k in FY08, an increase of 1387%. They seem to do better in HK, where two of their pre-primary textbooks were adopted by schools, thus capturing a good market share to sustain their dominant leading position. More discounts were given (hinting you the strength of their pricing power) and more money spent on marketing their books. I think they should continue their pre-primary textbook business. I believe that based on Singapore's strong pre to primary textbook branding, they will do very good in this aspect.
Net margins, though improved slightly (might be just the usual business fluctuations, rather than real improvements), are still very low at around 3%. ROE improved to near 10% though. While current ratios seem healthy, their total debts to equity actually increased. We can see that their cash flow statement shows negative net cash from operating activities, negative investing activities but very positive cash flow coming from financing activities. Looking at it more carefully, there is an increase in long-term bank loan to the tune of $52,267,000 for their new property business. That alone constitutes a huge part of their cash/cash equivalent for the period.
Popular gave a dividend of $0.012 (tax exempt) in total this and last FY. Given last closing of $0.270, that's a dividend yield of 4.44%, constituting a payout ratio of 40%. PE (based on FY08) is 9x.
Stumble it!