Tuesday, February 28, 2006

Move Over Who?: Part VIII

Karensoft reported its earnings tonight.

This was what the management wrote in their notes. (
read more here )

  • For the fourth quarter ended 31 December 2005, Karensoft Technology Berhad achieved a turnover of RM0.188 million. Compared to the RM0.172 million achieved in the third quarter ended 30 September 2005, turnover was 9% higher. Despite the marginal increase in the Group’s revenue, its pretax loss widened by 714% to RM8.164 million from the preceding quarter’s loss of RM1.003 million. The huge pre-tax loss incurred for the current quarter was attributable to depressed sales volume, impairment of development cost, provision for doubtful debts and China investment written off.
    For the twelve months ended 31 December 2005, Karensoft recorded a turnover of RM1.254 million compared to last year’s corresponding results of RM6.147 million.
    Consequently, the Group recorded a pretax loss of RM10.612 million compared to last year’s corresponding period pre-tax loss of RM3.929 million. The significant drop in revenue and the doubling of losses were mainly attributable to poor market demand for its enterprise applications and solutions, impairment of development cost, provision of doubtful debts and investment written off.

==>

a turnover of RM0.188 million?

pretax loss widened by 714% to RM8.164 million!!!!

(total year) pretax loss widened by 714% to RM8.164 million !!!!!!!!!!

  • Prospects

    The Group has launched a new ERP known as KarenSoft ERP4Auto, which is specifically targeted at automotive industry. KarenSoft ERP4Auto product will assist automotive industry players be more efficient and productive in managing their cost with the AFTA pressure. Hence, the Group foresees the new product to contribute positively to future earnings.

    The Group will continue to market it existing KarenSoft ERP2 and other products to target mid-sized and top-tier SMIs in the domestic as well as overseas markets. Karensoft will also continue to develop customized niche products for specific industries.

Huh?

So what happened to its software package that could challenge the great Microsoft's Office Suite??

* past postings can be found here...

Karensoft
Karensoft: Part II
Karensoft: Part III
Karensoft: Part IV
Karensoft: Part V
Karensoft: Part VI
Karensoft: Part VII

10 comments:

hhc1977 said...

nm,

it's really amazing to see Karentsoft directors/promoters trying desperately to market thei company share rather than their product.

FYI, the price now is only less than RM0.1. Would it be PN4 soon?? I bet it will in this year or two....

Moola said...

hhc,

At its peak of around 96 sen, Karensoft had a market capital of around 65.8 million!!!!

now? at 9.5 sen? It's market value has shrunk to 10.9 million.

Ahem.... isn't this one perfect example of market value destruction?

Question that begs to be asked is how did such a poor company got listed?

Bursa said...

Give them a chance ?

Moola said...

Bursa,

Give them a chance?

?

Consider this.. If i had purchased Karensoft way back in 2004, as per Kenanga recommendation, at around 90 sen... today... right now... who do you think will give me a chance?

hhc1977 said...

nm,

Famous quote:

"Past performance doesn't guarantee future return"

"Reader is advised to seek their professional advise from broker/adviser before making investment. This report is only FYI".

Legally, K&N doesn't break the law. Those fellows who dont use money management, they have to see their net worth being destroyed.....

Moola said...

hhc,

"Past performance doesn't guarantee future return"

"Reader is advised to seek their professional advise from broker/adviser before making investment. This report is only FYI".

==> Ah... but who was the professional giving the advice here?

If I was a client of K&N, who then should I ask?

"Legally, K&N doesn't break the law."

==> Of course they did not...

but.. let me say it again... at that moment of time... when K&N introduced the stock... the ExecSuite was just a prospect, will it deliver or not is one issue... but without it.... Karensoft was rather poor. It's current net earnings was only 164k and its ytd net profit was of 0.98 million. That was the known fact!

And..if one look at the table posted in that report, K&N actually estimated a total net profit of 0.8 million for Fy 2004 for Karensoft (see the column under 04e). And at 0.96, K&N were recommending Karensoft based on a pe multiple of 81x!

Now of course such recommendations are legal... sure is... and... lol... i guess it serves all the losers who bought the stock as per K&N recommendation for being silly enough to follow the so-called professional advice fronm a professional broker!

:)

hhc1977 said...

nm,

True, at the end of the day, the reader cum buyer is the one who foots the bill.

Not K&N or the analyst.

Bottomline:

Do your homework! Or read more Nomore Blog :)

Moola said...

hhc,

This one I am sure you know very well that I belive very much that the analyst should bare responsibility because I am sure you know very well that some of these buggers write in a certain manner for a reason.

Look at that newsreporter. Do you think it is right that he writes the way he writes?

:P

Anonymous said...

Hi Moola


I just downloaded the Q1/2006 report and noted that Karensoft had actually reported a Q1/2006 profit. Perhaps their strategy of focussing on ERP4Auto is paying off ?

Moola said...

Anon,

I am reposting your other message here.

-----------------------------


Hi Moola

I like your mumblings and your apparent objectivity.

However, I am puzzled why you did not mention that Karensoft reported a Q1/2006 profit ?

I downloaded the Q1/2006 and the 2005 accounts and running through the GN3 Guidelines, I cannot understand why Karensoft was clasified as a GN 3 company as they pass all the tests as a Group and should not be classified GN 3.

The only thing that could hit them would be 2.1 (b) & (c) where the accounts of the listed company alone are considered. I noticed that there was an impairment loss of about 9 Million charged to the P/L of the holding company and not the group. As far as I know, FRS 136 on Impairment of Investments should only be efffective 1/1/06

Could it be that Karensoft has been penalsied for early compliance with FRS 136 ?