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04-03-2025, 01:47 PM
(03-05-2024, 02:24 PM)weijian Wrote: (1) The Balance Sheet is prescient. ZERO gearing with equity made up of 40% cash, 30% working capital and 25% equity- accounted associate and 5% PPE/intangible asset. You can't get more simplified than that. The only problem would be its business model - that of a trader - which requires large working capital that may fluctuate over the years. For example, if GP for a 100mil trade is 0.5%, it will earn 500k. If GP for a 200mil trade is 0.25%, it will earn 500k too. So both trades have same profit but the latter trade needs more working capital (whether is it receivables or inventory). Is this the main reason why dividend payout is at =30% (if we exclude 30yr anniversary special dividend). Also by capping dividend payout at 30% of PATMI on a trading business model that is opportunity-dependent, it creates certain degree of variability in terms of the dividend yield.
CAO has recently announced their results and 2 noticeable things:
(1) Its crown jewel SPIA (share of results from associates) has flatten at ~22.7mil, and it is comparable to 1H24/2H23 of 22-23mil. CAAC forecast ~7% increase for international flights out of China in 2025, with still room to grow as 2025 still expected to only perform at ~90% of pre covid. Will increasing costs continue to eat in profitability? But we can assume that the meat is gone.
(2) Declares a 3.72cent first and final ordinary dividend. This translates to the 40% payout ratio, an increase from the traditional 30% payout (which does not account for the 30year anniversary special dividend in FY23). This is a welcome change!
CAO FY24 results:
https://links.sgx.com/FileOpen/CAO_Resul...eID=834689
I am not a certified financial advisor and so nothing of what I say should be construed as financial advice. Please consult a certified financial advisor for advice instead.