Eratat Lifestyle

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11 years 2 months ago #15596 by momoeagle
Replied by momoeagle on topic Eratat Lifestyle
Hi all,

I have some really simple calculations... with information gathered from 3rd party sources, specifically this website.

According to nextinsight report, "RMB50 million will be for opening self-owned flagship and up to 10 retail shops in Shanghai by year-end; and RMB44 million will be for working capital, substantially to secure the supply of apparel products for all its self-owned and new distributors’ retail shops."

www.nextinsight.net/index.php/story-arch...nd-cum-warrant-issue


So 44m is for probably 11 self owned stores and new distributors' shops... Total probably around 20 as a first estimate? (Estimated more shops on purpose for more prudent calculations below...)

Note that new suppliers are small and will not have many shops, from
www.nextinsight.net/index.php/story-arch...94-cents-stock-price


From www.nextinsight.net/index.php/story-arch...out-one-off-expenses
They have about 800 stores...
That means they need about 1760 mil to secure apparel supplies from suppliers at each time?

==> Let's give it a discount of 50% for more prudent calculations, how about 880 mil?

How would 500mil cash be enough then?




Also, on their report, the amount of trade deposits (probably the working capital to secure the apparels by the suppliers) is 156mil. This is for over 800 shops. This works out to around 225 new shops, which means my initial estimated calculations might be wrong for the number of shops.
But new distributors do not open many shops, probably 1 - 3 only according to CFO...!

And supposedly, they choose their distributors carefully, such that they have only 12 distributors at the moment... So there shouldn't be many distributors to start with...



Numbers somehow do not make sense to me.

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11 years 2 months ago #15598 by momoeagle
Replied by momoeagle on topic Eratat Lifestyle
An interesting thing to note

Eratat used to report their trade receivables from
1-30 days
31-60 days
61-90 days

The last round, they reported 1-90 days.
Quite inconsistent in their reporting.


Also, it is quite interesting that it is the CFO who is on the front of the NextInsight reports, and not the CEO who appears virtually non-existent on most of the reports.


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11 years 2 months ago - 11 years 2 months ago #15600 by newbiestock
Replied by newbiestock on topic Eratat Lifestyle
skeptic, is there anything better that u can say? i will take note of ur comment today. The time will come when eratat share price rocket and u hv to eat back your words.

momoeagle, nothing wrong with the CFO appearing in nextsinight. The CEO doesn't speak english tat well but in the AGM, u will see his photo in nextinsight cover page. what inconistent is there in the trade receivables reporting? dun get it. The credit days has been reduced from 150 days to 120 days. It's good enough.

Skeptic wrote: My exact sentiments, Rock, good points.

I think some people here are over-invested in Eratat and have fallen in love with the company. Whatever questionable or ambiguous actions that are done by the company are always somehow rationalized and looked upon positively. They cannot afford to lose so they subconsciously force themselves to only things with rose-tinted glasses.

The shareholder meetings are also quite useless because the CFO is not sufficiently grilled on their questionable actions of late. Questions such as the below are not sufficiently put forth to them. Shareholders tend to go easy on them because they also psychologically want to believe that everything is positive. They even do the job for the CFO and Investor Relations by defending the company day and night here even though they haven't got the answers to the questions below.

Amazing what happens when one falls in love with a stock.

"
1) Eratat have RMB502 million yet even cannot secure RMB100 million loan?

2) How Eratat utilise it's RMB502 million for it's business operation?

3) Eratat able to generate cashflow positive yearly, last year by more than RMB200 million yet so desperate for cash? (More than double the amount it desperately want to loan)

4) Any companies able to generate such impressive cashflow yearly maybe trading at over PE 20x. Why such great performance yet trading only at at PE2.5x"

Last edit: 11 years 2 months ago by newbiestock.

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11 years 2 months ago #15603 by the peak
Replied by the peak on topic Eratat Lifestyle
SIAS may do a research report on Eratat.

Maybe we can obtain more information from the SIAS report.

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11 years 2 months ago #15604 by gangho
Replied by gangho on topic Eratat Lifestyle
Newbizstock,

Thanks for all the update. Let's enjoy the div...

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11 years 2 months ago #15606 by newbiestock
Replied by newbiestock on topic Eratat Lifestyle
ya, gangho and peak. :lol:

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