CIFL aiyo salli?

Slstock · 26 Re: CIFL aiyo salli? Wed Mar 13, 2013 7:50 am

Slstock

Director - Equity Analytics

Posts : 6610
Join date : 2011-01-22

I agree about the competetion and some of the concerns you raised. But on the other hand smaller companeis if managed well can grow faster and quicker than more established one. Reg SEMB till will only tell. Atleast is had been heading up not down the last few quarters.

I recall SEMB had some alliance with Ashok Leyland. Not sure whether it still exists. LEyland also was not doing well due to economy.

Like I mentioned else where , the decision to invest or trade is up to us. Also SEMB.X warrant conversion was at 2 times current price but few were converted. SEMB.N at Rs 1.

Your below comment 'I do not agree.

knockknobbler wrote:

An investor who is looking for stabity,
growth, and returns on a long term basis, will not enter into this type
of industry, though some companies within the industry might show good
results on quarterly/ annual basis, and indicate consistent
improvements.

Think about the companies you mentioned CFIN, LFIN, PLC. CFIN has shown consistent growth over decades not years. LFIN after a big turn around from Vanik management , it is giving a good run to CFIN.

PLC is probably the safest due to gov backing.

knockknobbler · 27 Re: CIFL aiyo salli? Thu Mar 14, 2013 8:23 am

knockknobbler

Manager - Equity Analytics

Posts : 178
Join date : 2013-02-21

slstock wrote:

Your below comment 'I do not agree.

knockknobbler wrote:

Think about the companies you mentioned CFIN, LFIN, PLC. CFIN has shown consistent growth over decades not years. LFIN after a big turn around from Vanik management , it is giving a good run to CFIN.

PLC is probably the safest due to gov backing.

I agree CFIN has shown consistent growth over decades.

This is exactly the same point, I am making. Think about the industry structure and market conditions during those decades . Finance companies had a distinct market segment for their products /services-. leasing, hire purchase , property loans ,personal loans etc, . The main point is established Banks did not intrude into this area. There were few finance companies ( less than 5 ?) and they were mindful about the risk /return ,since they have developed business practices , expertise over the years.

There was not cut throat competition .The people behind the finance companies were respected and trusted ( even -Kotalawala @TFC). When VANIK was developing liquidity problems, LFIN was not in trouble ,because the operations / management were separate. That's why VANIK was able sell LFIN at a good price, unlike the sale of it's other assets. .
CFIN had another advantage because of their regional presence ( Kandy area ).
Compare the industry structure, market conditions ,then and NOW. Can a rational fund manager conclude that companies like CFIN, LFIN, can maintain same growth rates and risk profile ? I doubt !
With regard to PLC, (I have not studied ) ,but I sense PLC is the most inefficient company in this lot, because it originated from Peoples Bank and it has grown oversize. Recently I heard a person with political connections was appointed as CEO ,paying very high salaries and perks.Probably , you know about the new Chairman and have an idea about his qualification, experience, suitability of leading a business enterprise of this nature. I hope a research / study is available, comparing staff /overhead costs to income , profits and NPL ratios.

Arena · 28 Re: CIFL aiyo salli? Thu Mar 14, 2013 9:33 am

Arena

Assistant Vice President - Equity Analytics

Posts : 702
Join date : 2012-07-31

knockknobbler

Very good comment. Thanks.

VFIN still maintain a 50% + growth over rev. and profit over last year as well. I dont know how they exaggerate the growth like this since we dont see any rushing advertising campaigns or branch expansion like COCR of Lfin. My point is VFIN shows the childhood of LFIN and the people who get a stake will be winners in 3 to 5 years time. That is what Divsa finance has done ( See the top 20 list of VFIN )

And if you take COCR they create new products. See their advertisement on Fixed deposits and Electronic items. This is the first time we saw some thing like this in Sri Lnaka. Any way if you are really aggressive you can beat others in any market.

For an example LFIN now having a portfolio of imported Branded luxury vehicles where they give the vehicle to the buyer with in few days but the leasing should be done through LFIN. They can deliver the vehicle faster than other reputed vehicle sales................Like wise Finance is a sector in which you can create new things to make money. having huge No. of players is not a issue in a growing country as far as the sector is well governed.

Slstock · 29 Re: CIFL aiyo salli? Thu Mar 14, 2013 10:00 am

Slstock

Director - Equity Analytics

Posts : 6610
Join date : 2011-01-22

Both KK and Arena comments needs to be noted.

When the competition gets tougher the survival of the fittest ( most innovative and aggressive) will win.

Regading VFIN, they have opened 2 new bracnhes within the last 6 months few months. I agree VFIN is going at a very fast rate and has a lot more possibilities to expand. Still trying to figure out why DP wants LFIN and VFIN. Many products are replicating. Does he want to make VFIN grow and sell off or merge with LFIN?

COCR and VFIN seems very potential companiesfor the future. But COCR ambitions are a bit too optimistic. They said they wantto make the share R 280 or something withing 2 or 3 years! Let give a few more quarter to figure out the growth momentum of these companies.

Arena wrote:knockknobbler

Very good comment. Thanks.

VFIN still maintain a 50% + growth over rev. and profit over last year as well. I dont know how they exaggerate the growth like this since we dont see any rushing advertising campaigns or branch expansion like COCR of Lfin. My point is VFIN shows the childhood of LFIN and the people who get a stake will be winners in 3 to 5 years time. That is what Divsa finance has done ( See the top 20 list of VFIN )

And if you take COCR they create new products. See their advertisement on Fixed deposits and Electronic items. This is the first time we saw some thing like this in Sri Lnaka. Any way if you are really aggressive you can beat others in any market.

For an example LFIN now having a portfolio of imported Branded luxury vehicles where they give the vehicle to the buyer with in few days but the leasing should be done through LFIN. They can deliver the vehicle faster than other reputed vehicle sales................Like wise Finance is a sector in which you can create new things to make money. having huge No. of players is not a issue in a growing country as far as the sector is well governed.