Eratat Cash at June 30th: 178 million
Receivables collectible within 1-60 Days (already collected since 60 days have passed) - 222.5 millon
Total cash now: 178 million + 222.5 million = 400.5 million
Receivables collectible before 30th September = 117.4 million
Receivables collectible before 30th October = 124.6 million
+ estimated q3 net profit of > or = 50 million
Deduct amounts paid for dividends, admin and advertising expenditures
You do the math but there is a lot of cash coming in for Eratat.
As its distributors become more established and suppliers become more accomodating as Eratat becomes a bigger player and regular established customer, receivables will get shortened and payment terms to suppliers become more favourable, Eratat is going to become a fantasic cash generating machine.
"Eratat is going to become a fantasic cash generating machine."
yup. tat's why I estimate the dividend shld grow exponentially in 2013. [unless Eratat got another big expansion plan on the way, then that would be a different story].
Assuming expansion still ongoing in 2012 and by 2013, distributors has grown bigger to become self-sustaining and the credit terms can be cut down.
200+ million rmb cash balance is a conservative estimate by end Q3 (10-12 cents cash). if cash well utilised and all receivables collectible, may hit 250 to 350 rmb million cash by end of Q3. But by end of Q4, due to trade deposit, i expect cash to drop a bit but net cash shld still be at least above 200 rmb million cash.
The cashflow cycle then repeats. So, on a conservative estimate, its cash balance shld grow at least 10% - 15% in the next 1-3 yrs.
And, as Eratat opens new shops (maybe around 15-30 each yr), revenue and net profit should grow consistently due to larger book order. Overall, Profit margin still hv room to grow another 2%-4%, as the proportion of PREMIUM sales increase.
tat's my forecast for Eratat. I will monitor its quarterly earnings closely and observe if my estimates are right or wrong.
[hr]
[ethan999 31-08-2011]:
Eratat Cash at June 30th: 178 million
Receivables collectible within 1-60 Days (already collected since 60 days have passed) - 222.5 millon
Total cash now: 178 million + 222.5 million = 400.5 million
Receivables collectible before 30th September = 117.4 million
Receivables collectible before 30th October = 124.6 million
+ estimated q3 net profit of > or = 50 million
Deduct amounts paid for dividends, admin and advertising expenditures
You do the math but there is a lot of cash coming in for Eratat.
As its distributors become more established and suppliers become more accomodating as Eratat becomes a bigger player and regular established customer, receivables will get shortened and payment terms to suppliers become more favourable, Eratat is going to become a fantasic cash generating machine.
Just found this > Shareholders Fund (RMBm)
2007 -> 30.269
2008-> 163.689 (+440.7%)
2009 -> 443.678 (+171%)
2010 -> 533.995 (+20.4%)
2011 (1H) -> 585.874 More than 15% growth in shareholder fund yearly.
EPS (RMB)
2008 -> 0.169
2009 -> 0.303
2010 -> 0.233
2011 (1H) -> 0.172 No significant drop in EPS.
No Of Shares
2008 -> 415.112 m
2009 -> 415.591 m
2010 -> 414.773 m
2011 (1H) -> 414.035 m No significant increase in number of shares.
Aft-Tax & MI P&L (RMBm)
2007 -> 40.619
2008 -> 70.154 (+72.7%)
2009 -> 125.924 (+79.5%)
2010 -> 96.642 (-23.3%)
2011 (1H) -> 71.214 Expect 2011's profit to be better than 2010.
Saw this posting by MisterP in CNA forum. Those guys are still yakking about the placement price!
MisterP says:
The share placement at 0.202 was all about raising CASH.
Eratat needed cash to expand and, as I covered in a previous post, the company needs cash to grow given its close to 6 month cash cycle. Are earnings today and going forward more than 15% higher than without the extra cash? The answer is yes (if you can read accounts you can see the return they are getting on their cash, and that cash is the absolute determinant in how fast they can grow).
The 15% expansion of the share base has thus resulted in a higher EPS for the existing shareholders - a positive result.
Eratat remains a company with zero debt, a super-low P/E, pays a dividend, has good growth prospects, and management is delivering to plan.
Domestic consumption in China, specifically consumer buying of fashion and apparel, will surely be unaffected by the European troubles. Eratat trading at below 14 cents is a bargain!
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