Wednesday, September 29, 2010

Quick Review Of Analabs Earnings

Just saw that Analabs had reported its earnings last night.

Of course, I am interested in it because I was interested to see how it fared because I had blogged on this company before.

First, here's the past postings:

  1. What's The Potential Of Coveright Surfaces To Analabs Resources?

  2. Update On Analabs Earnings

  3. A Look At Analabs Earnings

  4. Analabs

( ps: LOL! I hope I won't be accused of obsessive for making this posting! LOL! )


In the posting # 3, A Look At Analabs Earnings, on March 2010, I stated why I decided to blog on this stock.

  • The jump in its q-q earnings has been very impressive this year.
    So why am I posting about this stock?
    Well, I had not been positive on this stock before.

Yes, I had not been positive on the stock before. See Analabs. I was NOT impressed. However, in the corporate world, anything can happen. Really. Bad companies can become good and even good companies can turn bad. Yeah, they call it turnaround. And since it was apparent that Analabs could have a positive turnaround for the better, I thought it was only fair that I blogged on it, yes, to acknowledge and to give credit. ( Yeah, Analabs jumped 13 sen to 1.39 on that morning! )

The next quarter, June 2010, I wrote the following: Update On Analabs Earnings. Let me re paste here what I wrote.

Analabs reported its earnings. It made a net profit of 3.640 million for the quarter, giving it a total earnings of 15.389 million for its fiscal year 2010.

Which is very impressive when one starts comparing it versus what it had achieved the previous year.

But then... on a q-q basis, the earnings was terrible.

Ah yes, yet another interesting issue. Should one look at a y-y comparison or should one look at the q-q comparisons?

On a y-y comparison, its 3.640/15.389 million earnings was very impressive. Last year, Q4, it made only 1.376 million and had a total earnings of 9.373 million for the fiscal year. Bravo.

On a q-q comparison, last quarter, it made 5.639 million. So the 3.640 million is rather a shocker yes? Why such a big decline?

Balance sheet comparisons.

1. Cash. This quarter 9.949 million. Last quarter 11.848 million. Last year 32.272 million.
2. Receivables. This quarter 26.924 million. Last quarter 25.275 million. Last year 7.812 million.
3. Investments in quoted securities. This quarter 14.544 million. Last quarter 14.863 million.

Fast forward present day.

Last night Analabs said it made 3.118 million from a sales revenue if 35.562 million.

I knew it was going to look impressive when compared to previous year, same period but on a q-q basis it was rather weak! Same scenario as in June 2010.

The balance sheet.

Of course the most interesting issue was the healthy cash flow. Cash balances increased by some 4.092 million.

And yeah, Analabs still had its 'investment in quoted securities'. It's worth some 14.786 million and it's property had been revalued to 90 million.

And regarding Coveright? This quarter it only contributed some 2.201 million to Analabs bottom line.

Er... do I have to put my disclaimer. I think I better. People do act rather strangely when it comes to stock markets! LOL!

1. I am a nobody.
2. I am not responsible for anyone's investments.
3. I am not a sotong. :D
4. I am certainly not an independent investment advisor.
5. Since I am not an in dependant investment advisor, I cannot guarantee that you should lose money.
6. Most important, I find no motivation to talk about stock price movements. Yeah, I do not indulge in guessing what a stock price will or will not do. So please spare me all the chats that you think this stock will go down by so much or this stock will soar by so much.
7. Oh, if you insist, I am obsessive! :P


K C said...

Despite a seemingly big jump in revenue and profitability for the first quarter 2011 of Analab compared to the corresponding quarter, the financial performance of Analab actually has deteriorated (quite badly) as evidenced from its much lower profit margin (PM) of only 9% for the present quarter compared to its past years PM of 20%+. Analab has a healthy balance sheet and it is debt free. However, its low leverage (1.28), coupled with low asset turnover of 0.68 work against its bottom line and yields a low ROE of only about 8%, hardly an attractive figure.

ronnie said...

Dear Moola. Totally agree with you on turn around situations. By the same token, what about Daibochi & Tomypak which after nearly ten years of unremarkable performance have suddenly come into the spotlight on the basis of turn around ?

Moolah said...

K C: Good point.

It's good that it's you that highlights this issue and not me.


Moolah said...

ronnie: the fundamental economics of their industry turned for the better.

Better selling prices and better margins - two of the more important ingredients.

For their case, if my memory fails me not, resin prices (thinks to the insane soaring of oil prices) was a massive burden to them. Despite the higher selling prices of their product, their margins suffered because high resin prices ate into their profit margin.

Things reversed when oil fell. It was a gift ( :P ). ASP (Average selling prices did not come down) but their 'cost' did. Hence, suddenly chunky margins 'fell' from the sky.

Now one can argue the sustainabilty of such business economics in the long run... but.. late last year.. this 'turnaround' created the magic market formula - the earnings growth... and the rest was history. :-)

tklaw said...

Asset turnover would be 0.82 if base on the results from the first consolidated balance sheet as at 31 Oct 2009. The whole year performance after factor in the four quarter results of newly acquired business is 16,311 for profit after tax with sales value 138,244. Thus return on equity seems higher at 12%.

Moolah said...

tklaw: wow! so into such precise calculations, meh? :D

tklaw said...

Moolah, Don’t get me wrong. I was not boosting the earnings of Analab. It is better to take into account the entire effect of new business operation so that the full year results would be more impressive, isn’t it? lol

Moolah said...

LOL! Why are you wrong? :P

K C said...

tklaw is right on the ROE of 12% as one should use all the trailing twelve month (ttm)data. I did something which is not right by computing ROE from Asset turnover and accounting leverage of ttm, but profit margin of the last quarterly results (profit margin of ttm should be used instead).The difference in ROE of 12% and 9% is big, not trivial. However, by looking at Analab's trend, the profit margin is clearly deteriorating, and I will not be surprised that it may fall below even 9%. Anyway, Analab is still a ok company, at least better than many others. It is just that it is not fantastic as shown by its big jump in revenue and earnings per share alone.

K C said...

correction, the asset turnover and financial leverage I used were those of last financial year ending 30 June 2010, whereas profit margin was the last quarter figure, or first quarter 2011.

wiggle17 said...

Analabs has been "lucky" in acquiring Coveright which brings in good results for the last 3 quarters but I'm afraid that the turning point (for the worse} is just around the corner....