When talk gets too cheap!

Flashback: 5th December 2005.

I wrote the following posting: Talk Is Sooooo Cheap

Let me reproduce it here:

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Talk is cheap because supply exceeds demand.

LOL!!!... Looks like I just have to repeat this over and over and over and over again.

Oh dearie me... what have upset my little-tiny-weenie-fingers yet again?

BSA targets RM70mil profit next year

BSA International Bhd is aiming for profits of RM60mil to RM70mil next year, said group executive chairman..

Ok, correct me England if i am wrong but it clearly states in this Bernama newsclip posted on the Star Businessnews that the BSA bossie is targeting/aiming/projecting a net profit of rm60-70million for next year.

Based on past performance, the company was confident of achieving a 30% increase in profits for 2006, he said.

Hmm... ok...ok... ok.... based on past performace.

Hmm... does past performance neccessary gurantee future performance????

Anywayyyy.... jom kita tengkuk saje... :)

_________2001____ 2002 ____2003_____ 2004

Sales_____91.544__ 113.701__164.759__ 198.434

Net profit_ 17.169__ 18.507___ 18.680___ 17.853

how?

Based on past 4 year's fiscal performance, earnings has been flat.

Real flat with no growth at all.

Tiok boh?

17.169 -> 18.507 -> 18.680 -> 17.853

No need to be a math genius but i see no growth mah.. numbers not increasing isn't it?

Ok.. ok... ok...

Let's see most recent 4 quarters...

Total sales: 254.616 million
Total net profit: 14.956 million

Ahh.. sales looks as if it's improving but net profit at this rate will even be worse than it's fiscal year.

Ok..ok....ok... let's see current fiscal year performance vs last fiscal year performance..

BSA just announced its 2005 Q3 earnings on 30th Nov. 2005.

Total sales: 199.909 million vs 143.769 million
Total net profit: 10.771 million vs 13.948 million.

Again... it shows that current sales is much, much better... but in investing, sales growth counts for nothing for the investor, for what is most important for the minority investor is the total net profit. So sales is up. Bang! Bang! Sound wor. But its total net profit is down. 10.771 million vs 13.948 million a year ago.

Soooo... how lah?

Last 4 fiscal years, no signs of growth wor.
Last 4 quarters earnings, olso no signs of growth. (err.. go-stan growth got wor!)
This fiscal year, olso no signs of growth. (err.. go-stan growth got wor!)

Based on past performance, company is the company is confident of achieving a 30% increase in profits for 2006 wor....!!!!!!

Can believe onot?

Do you think this company, which had been making net profit between 17-18 million, with signs of a poor current fiscal year, will be able to meet this bossie target of rm60-rm70million the next fiscal year?

Or again is talk so cheap?

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2 and a half years later, how do you think BSA is doing?

Posted on the Edge yesterday.

• 11-06-2008: BSA falls to low of 10.5 sen
  By Surin Murugiah
  
  PETALING JAYA: BSA International Bhd fell 50% to a low of 10.5 sen with 1.15 million shares done yesterday after the company announced on Monday that it was an affected issuer and had fallen into the Practice Note 17 (PN 17) category.
  
  The company fell under PN17 category after it defaulted on its interest payments totalling RM2.63 million for its debts due at end-May.
  
  BSA had on June 2 defaulted in interest payments for its outstanding Murabahah primary medium-term notes (MTN) and collateralised loan obligations (CLO), which were due on May 26 and May 30, respectively.
  
  The company said RM45 million of the MTN still remained outstanding, while Kerisma Bhd’s CLO was in respect of a loan facility amounting to RM45 million.
  
  BSA’s subsidiaries BSA Manufacturing Sdn Bhd and CAM Component Alloy Manufacturing Sdn Bhd had also received statutory notices in respect of principal and interest claims of RM5.17 million and RM5.19 million, respectively, from HSBC Bank Malaysia Bhd.
  
  The company said its directors were currently negotiating with the lenders and noteholders to seek indulgence for a standstill period to propose a restructuring repayment of the outstanding amount.
  
  Last month, RAM Ratings downgraded the ratings of BSA’s RM150 million Murabahah Commercial Papers/Medium-Term Notes (MCP/MMTN) programme (2004/2011), from C3/NP to D.
  
  For the first quarter ended March 31, 2008, BSA posted a net loss RM12.88 million from a net profit RM2.61 million a year ago.
  
  Among the reasons the company gave for its financial situation was that it had been affected by the continuous rise in prices of raw material, its primary raw material of aluminium ingot and fuel as well as the weakening of USD in the recent years, which contributed to constraint in working capital.
  
  The company had then said that while it expected to strengthen its position in the local and global alloy wheels industry via new markets and higher margin products, its business was still constrained by limited working capital.
  
  It said this was made worst by the nature of its business whereby it needed to pay upfront for purchases of its main raw material, which is aluminium ingot that accounts for 60% of total production costs.
  
  Last March, the company said its indirect wholly owned subsidiary CAM Automotive Manufacturing (Fushun) Co Ltd entered into an alloy wheel manufacturing contract with Baoding Lizhong Wheel Manufacturing Co Ltd. (Baoding) of China to supply alloy wheels to Baoding.
  
  It said CAM Fushun was expected to generate annual sales of RM31 million from the contract, and would contribute positively to its financial year ending December 2008.

See the clues the investor can get by judging what and how the management says (behaves) in public?