Friday, August 19, 2011

A Quick Look At Smartag's Earnings.

Posted in June 2011.

Smartag announced its earnings last night. It announced it had losses of 1.209 million.

And Smartag is still a fairly new stock in the ACE Market and yes it is trading below its IPO retail price of 31 sen.

For the record again. On 13th April Smartag made 2 earnings announcements!
Q1 - a loss of 386 thousand

Q2 - made 653 thousand.
Q3 - a loss of 1.2 million

And as mentioned in the posting Is Smartag Worth A Bet? , KN had expected earnings for fy 2011 to be 10.4 million! Judging on last night's earnings performance, the chances are great that a net profit of 10.4 million will not be achievable this fiscal year. And this will put the fair vale price of 42 sen given by KN in doubt.

The worrying sign is that Smartag only posted a sales revenue of 14 thousand.

Let's think about it.

Obviously, Smartag is focusing only on the Royal Malaysian Customs project, which makes it a one customer business. If the project is passed and if the project is successful, then perhaps the company will do good.

However, some investors might get edgy with such a business. The business risk is much higher. If anything goes wrong with this project (for example, costing/pricing issues, software/technical issues or change of governmental fiscal policies) the company could be hit badly for it has only one customer. That's the potential business risk.

And to compound the matters worse, the custom project is still not officially announced.

This left me thinking.

Is the investing public aware of this 'one customer' issue?

This made me wonder about the 2 earlier quarterly announcements made in April 2011.

Q1 - Quarterly rpt on consolidated results for the financial period ended 31/12/2010 - Smartag has sales revenue of 1.774 million.

Q2 - Quarterly rpt on consolidated results for the financial period ended 31/3/2011 - Smartag has sales revenue of 3.914 million.

Now those two quarterly earnings painted a totally different picture, yes? There's some business activities going on. It didn't look like a one customer business model.


Before listing, company did not look like a one customer business model and now, after listing, the company turned into a one customer business model.

The perception of the company has changed isn't it?

And if one HAD invested based on the EARLIER set of data, how?

Anyway, from the Q2 earnings, Smartag carried a rather large set of receivables in its books. It had receivables of 11.956 million.

According to its earnings notes, there is MUCH improvement in its collection. Receivables trimmed down to just 2.054 million. It's good that the company manage to collect the debts owed to them. And as a result, the company's cash balance showed a very healthy increase.

Dedicated to  Jollybee .


Mun Wai said...


14K? What a joke! Listed company?

Moolah said...

Yes, all it had to show was 14k!

Well it was understandable that it was always going to go for the big custom project but ..... the inquiry mind wants to know..... whatever happened to all its other business it had before listing?

Mun Wai said...

Does it mean that if the Custom Department project turns sour, the Company (theorectically)is going to be left with zero business.

Wow! Like kids playing with mud and sands! Listed company?

How it get listed in the first place without a reasonably sustainable stream of earnings? CG? Regulatory bodies, are they sleeping or playing with mud and sands too?

Local market, how to grow?

ronnie said...

What have the monkeys in KN been smoking?

Moolah said...

Ah Wai: That the company had no other business than the custom project... now that's the shocker.

And yes, from a corporate governance point of view, one needs to address if Smartag had been transparent with its investors/minority shareholders that it had no other business than the customs project.

And like you say... what if the project turns sour?

Mun Wai said...


If the Company says its net profit is 10.3 mil for FY10, they who wrote the reports can't just simply trim down the estimates for the coming FYs, is it true? :)

What else to do other than giving it a "no growth" kind of estimates ?

Moo, have I been smarter overnight? :P

Moolah said...

Too smarter.


Quote: If the Company says its net profit is 10.3 mil for FY10, they who wrote the reports can't just simply trim down the estimates for the coming FYs, is it true?

The company here is KN.
The 10.3 mil is the profit forecast/estimate made by KN on Smartag's earnings.

Actually extimates can be trimmed.


in this instance.... this is Smartag's Q3 earnings. So to trim down... is rather... pointless.

And also.... many a times.... ppl just dun .... err.... 'remember' who wrote what. :P

Most of the time... the focus is... on the .....TP.

And no... TP does not stand for T.Paper. :P

jollybee said...

Thank you for your dedication, Moolah. Jollybee is replying.

I agree that Smartag becomes a purely speculative stock by looking at this 3 quarters result. My followers in Investlah knew that, any BN ETP stock should be seen speculative like Karambunai.

Will write more in the future. Please visit Investlah to read more about latest market trend.