23-04-2017, 09:04 PM
(23-04-2017, 11:49 AM)Bluechipfan Wrote: Done with reading the AR16! Immediate impression is that cashflow will increase positively as there will no longer be cash outflow to repay bank loan and loan interest. This is easily around RMB100 millions saving per year! However, not all the money will be attributed to shareholders or become retained profits, as there will be capex on expansion, among other things. Nevertheless, the 'extra' RMB100 millions per year resulting from the saving of bank loan/interest is 'recurring', if I may put it that way. In addition, rate of expansion can be controlled and the management has been doing great in this front. It is not envisage that fund will be allocated for expansion every year save for the regular yearly depreciation of plants, property, equipment etc.
From TKG's post, we also know the management has foresight to invest in environment measures to ensure clean production. This is repeating reward now and competitors have a hard time to catch up. Sunsine, on the other hand, has capitalised the situation by gaining market shares. Sunsine also seems to becoming a price setter by lowering profit margin and some competitors may find themselves unable to keep up and losing even more market shares to Sunsine.
Just some random quick thoughts after reading the AR16. I will continue to monitor the company. In particularly, whether they can continue capture bigger market shares going forward.
I am yet to read the AR. General comments here.
There are expansion CAPEX as well as replacing CAPEX. Replacing CAPEX for manufacturing is significant generally, especially for the chemical products.
Becoming a price setter by lowering profit margin? Probably you mean able to price out competitors with its lower cost base.