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FINANCIAL CHRONICLE™ » FINANCIAL CHRONICLE™ » PC House Right Issue

PC House Right Issue

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21PC House Right Issue - Page 2 Empty Re: PC House Right Issue Thu Mar 14, 2013 7:29 pm

CSE.SAS


Global Moderator
@Redbulls wrote:
@Dileepa wrote:
Exactly! I have to say CSE lacks quality companies and honest business men.
Not to promote anything, but to give an example of what I feel a safe to investment is 
PC House Right Issue - Page 2 Nest10
Yes NEST is a good one.
There are some more counters to be considered.



It is a highly efficient company with minimum capital, well run with little retained profits used for reinvestment!

They had revenues of approx Rs29B in 2012 on sales of household brands such as Nestomalt, Maggi etc. and profits before tax of Rs3.5B and PAT of Rs3B.

In effect it pays out its whole net profit as a dividend and 91% of the shares are owned by Nestle SA the parent, with 19 other shareholders owning 4%.

Whilst the Company has a NBV of about Rs5B in fixed assets, its total share capital and reserves is only Rs3.8B which includes this year’s profits!

22PC House Right Issue - Page 2 Empty Re: PC House Right Issue Thu Mar 14, 2013 8:06 pm

The Alchemist


Senior Manager - Equity Analytics
Senior Manager - Equity Analytics
@CSE.SAS wrote:
@Redbulls wrote:
@Dileepa wrote:
Exactly! I have to say CSE lacks quality companies and honest business men.
Not to promote anything, but to give an example of what I feel a safe to investment is 
PC House Right Issue - Page 2 Nest10
Yes NEST is a good one.
There are some more counters to be considered.



It is a highly efficient company with minimum capital, well run with little retained profits used for reinvestment!

They had revenues of approx Rs29B in 2012 on sales of household brands such as Nestomalt, Maggi etc. and profits before tax of Rs3.5B and PAT of Rs3B.

In effect it pays out its whole net profit as a dividend and 91% of the shares are owned by Nestle SA the parent, with 19 other shareholders owning 4%.

Whilst the Company has a NBV of about Rs5B in fixed assets, its total share capital and reserves is only Rs3.8B which includes this year’s profits!


As Warren Buffet once said, Great Companies do not necessarily make great stocks. If you look at NEST, its trading at over 30 times earnings, over 20 times Book Value and at a 3 % Dividend Yield. But no doubt - Great Company.

But then again, we should not be talking about great companies on a PC House thread !

23PC House Right Issue - Page 2 Empty Re: PC House Right Issue Thu Mar 14, 2013 8:26 pm

Chinwi


Associate Director - Equity Analytics
Associate Director - Equity Analytics
Why they (PCH) have decided to face this kind of embarrassment by going for a rights issue to collect 343 million when they have,

A) 1,230 million in Inventories and
B) 1,040 million to receive from outside parties.

C) They have to pay just 160 million to outsiders.

D) Furthermore, they have 350 million in retained earnings !
( Rainmaker's favorite !)



A) and B) = mayday mayday ... --- ... ... --- ...
C) = No friends no rescue
D) = summa
I really feel sorry for everybody including young husband and wife.

24PC House Right Issue - Page 2 Empty Re: PC House Right Issue Thu Mar 14, 2013 8:27 pm

Fresher


Moderator
Moderator
Will this rights issue really solve the problem? I guess not.

And as Whitebull pointed out, this is just a small way of postponing their bankruptcy

25PC House Right Issue - Page 2 Empty Re: PC House Right Issue Thu Mar 14, 2013 8:50 pm

mark


Expert
Expert
harine putha,now sell sell sell
get out..

26PC House Right Issue - Page 2 Empty Re: PC House Right Issue Thu Mar 14, 2013 9:23 pm

Fresher


Moderator
Moderator
PC House Right Issue - Page 2 Pch_co10]

The quarterly data summarised.

I was rather surprised. I was under the impression that PCH was building up inventories and receivables rather rapidly.

But last quarter of 2012 was the turning point, where probably the revenue decreased and the stock ended up in inventory.

things that I note
1) Borrowings has mostly been short term, which seems to have been rolling over for many periods.
2) Virtually no payables

Do these mean that anyone, lenders and suppliers, are not willing to give them credit?

3)They have been working with low amounts of cash.
4)Although revenue is decreasing the gross margin has improved. But the loss of gross profit is hurting the bottom line mainly due to the high finance cost, which is now more than 10% of the revenue.

I feel if the new money is used to pay off some debt, they might have a chance to turn around. Provided the WC is adequate and the business is managed efficiently. The management, well, ... up to them.

Another thing is if these inventory is actually worth this much? or is it just obsolete stock being carried forward? And are all these receivables recoverable?



Last edited by npp on Thu Mar 14, 2013 9:30 pm; edited 1 time in total

27PC House Right Issue - Page 2 Empty Re: PC House Right Issue Thu Mar 14, 2013 9:24 pm

sureshot

sureshot
Vice President - Equity Analytics
Vice President - Equity Analytics
ultimately rish & granny will have to buy the rights.

hope pch hits 2.00

28PC House Right Issue - Page 2 Empty Re: PC House Right Issue Thu Mar 14, 2013 10:01 pm

Jiggysaurus

Jiggysaurus
Assistant Vice President - Equity Analytics
Assistant Vice President - Equity Analytics
@sureshot wrote:ultimately rish & granny will have to buy the rights.

hope pch hits 2.00

sureshot will this be the future for mr and mrs baloney as well?

inefficient management begging for more money from shareholders.

29PC House Right Issue - Page 2 Empty Re: PC House Right Issue Thu Mar 14, 2013 10:40 pm

CSE.SAS

CSE.SAS
Global Moderator
More than 50% of issue shares under margin account as at 31-12-2012

PC House Right Issue - Page 2 Pch10

More Info :- PCH Interim Financial Statements as at 31-12-2012

30PC House Right Issue - Page 2 Empty Re: PC House Right Issue Thu Mar 14, 2013 11:28 pm

Gaja


Associate Director - Equity Analytics
Associate Director - Equity Analytics
@Chinwi wrote:Why they (PCH) have decided to face this kind of embarrassment by going for a rights issue to collect 343 million when they have,

A) 1,230 million in Inventories and
B) 1,040 million to receive from outside parties.

C) They have to pay just 160 million to outsiders.

D) Furthermore, they have 350 million in retained earnings !
( Rainmaker's favorite !)



A) and B) = mayday mayday ... --- ... ... --- ...
C) = No friends no rescue
D) = summa
I really feel sorry for everybody including young husband and wife.

Friend the this is the same i feel, see i commented above

If the Working capital requirement is the major issue, i think they should have a serious look on the Inventories and Trade Receivables.

Am looking forward the 2012/2013 results to see the Impairment implication

31PC House Right Issue - Page 2 Empty Re: PC House Right Issue Fri Mar 15, 2013 3:36 am

anges


Assistant Vice President - Equity Analytics
Assistant Vice President - Equity Analytics
I hope people will not fall into trouble by buying this junk stock ! this will go down below rs 1/=

32PC House Right Issue - Page 2 Empty Re: PC House Right Issue Fri Mar 15, 2013 4:25 am

Slstock

Slstock
Director - Equity Analytics
Director - Equity Analytics
1) Have they sold to Govn dept/projects ?

Else why these receivables do not reduce over an year. Is someone giving a "polla" to rishan.


2) Being in the tech industry growing inventories = most of it outdated.

If inventory stock do not sell it is better to sell at cost or below before they get nothing


If so this right issue amount is peanuts to issues he is going to face.

If Rishan put more effort to manage his companies better without worrying about trading and pumping his shares , ( PCH,PCHH, PCP , OGL) maybe his present plight would have been better.

Even OGL is reporting very much less profit that they should



33PC House Right Issue - Page 2 Empty Re: PC House Right Issue Fri Mar 15, 2013 9:00 am

K&M


Senior Equity Analytic
Senior Equity Analytic
npp wrote:PC House Right Issue - Page 2 Pch_co10]

Do these mean that anyone, lenders and suppliers, are not willing to give them credit?

3)They have been working with low amounts of cash.
4)Although revenue is decreasing the gross margin has improved. But the loss of gross profit is hurting the bottom line mainly due to the high finance cost, which is now more than 10% of the revenue.

I feel if the new money is used to pay off some debt, they might have a chance to turn around. Provided the WC is adequate and the business is managed efficiently. The management, well, ... up to them.

Another thing is if these inventory is actually worth this much? or is it just obsolete stock being carried forward? And are all these receivables recoverable?

Appreciate your analysis on PCH, even i feel that this working capital requirement is to payoff its debt referring to your 3rd point the amount of cash held is not enough to meet that demand.

PCH most probably has supplied there goods to some government projects/loss making entities, this can be one reason why PCH is stuck with a Hugh chunk of receivables once they receive some portion of it they will have the chance of moving forward with more capital in hand.

Tech Firms needs to be innovative, its the most rapidly changing sector, you need to have the latest technological products to cater to customers requirements and customers now days go for the latest products. My feeling is PCH does not have enough cash for this shift. High level of worthless, out of the date inventory levels and high level trade receivables leaves PCH with less cash to expand. Since these inventory might have been held for a very long period suppliers might be refusing to supply more untill the credit is paid off.

So lets hope that this right issue will help the company to walk again, this can be a very good lesson to be learnt.



34PC House Right Issue - Page 2 Empty Re: PC House Right Issue Fri Mar 15, 2013 9:35 am

Gaja


Associate Director - Equity Analytics
Associate Director - Equity Analytics
Now 3.30/=

35PC House Right Issue - Page 2 Empty Re: PC House Right Issue Fri Mar 15, 2013 9:38 am

No


Senior Equity Analytic
Senior Equity Analytic
gahen watunu investorslata Ha...... anna wage. affraid

36PC House Right Issue - Page 2 Empty Re: PC House Right Issue Fri Mar 15, 2013 9:41 am

keeper

keeper
Assistant Vice President - Equity Analytics
Assistant Vice President - Equity Analytics
Which is the good price for buy?Below RS.3.00

37PC House Right Issue - Page 2 Empty Re: PC House Right Issue Fri Mar 15, 2013 9:48 am

Slstock

Slstock
Director - Equity Analytics
Director - Equity Analytics
Well as I mentioned above I suspected this can drop to Rs 3 but I did not think it will happen in a single day!

38PC House Right Issue - Page 2 Empty Re: PC House Right Issue Fri Mar 15, 2013 9:57 am

Gaja


Associate Director - Equity Analytics
Associate Director - Equity Analytics
Can we expect dealing by director very soon, either buying or selling?

39PC House Right Issue - Page 2 Empty Re: PC House Right Issue Fri Mar 15, 2013 10:03 am

Slstock

Slstock
Director - Equity Analytics
Director - Equity Analytics
Possibly some buying if they want to save their face. if they sell that will be ashame and an indication for investors.

Will this drop below right issue price, If so why go for rights? Not to mention margin calls on PCH. Dropped 25% in a day.





@Gaja wrote:Can we expect dealing by director very soon, either buying or selling?

40PC House Right Issue - Page 2 Empty Re: PC House Right Issue Fri Mar 15, 2013 10:48 am

Chinwi

Chinwi
Associate Director - Equity Analytics
Associate Director - Equity Analytics
@Gaja wrote:

Friend the this is the same i feel, see i commented above

If the Working capital requirement is the major issue, i think they should have a serious look on the Inventories and Trade Receivables......

Yes Gaja,

Actually the real time bomb is in those values. You can have some hopes even after a rights issue like this , big trade losses or after a big fraud discovered in a company.... etc.

I do not like even to think what are those billions specially in an IT hardware trading company. Horrific.

41PC House Right Issue - Page 2 Empty Re: PC House Right Issue Thu Mar 28, 2013 10:04 am

Gaja


Associate Director - Equity Analytics
Associate Director - Equity Analytics
http://www.cse.lk/cmt/upload_cse_announcements/5251364444433_.pdf

42PC House Right Issue - Page 2 Empty Re: PC House Right Issue Thu Mar 28, 2013 10:13 am

RANGANA PERERA


Manager - Equity Analytics
Manager - Equity Analytics
What happen next ?????????????? MR GAJA Basketball

43PC House Right Issue - Page 2 Empty Re: PC House Right Issue Thu Mar 28, 2013 10:17 am

CSE.SAS

CSE.SAS
Global Moderator
http://dynarisholdings.com/

44PC House Right Issue - Page 2 Empty Re: PC House Right Issue Thu Mar 28, 2013 10:18 am

CSE.SAS

CSE.SAS
Global Moderator
http://telearc.com/group_company.html

45PC House Right Issue - Page 2 Empty Re: PC House Right Issue Thu Mar 28, 2013 10:39 am

Hawk Eye

Hawk Eye
Assistant Vice President - Equity Analytics
Assistant Vice President - Equity Analytics
K&M wrote:
npp wrote:PC House Right Issue - Page 2 Pch_co10]

Do these mean that anyone, lenders and suppliers, are not willing to give them credit?

3)They have been working with low amounts of cash.
4)Although revenue is decreasing the gross margin has improved. But the loss of gross profit is hurting the bottom line mainly due to the high finance cost, which is now more than 10% of the revenue.

I feel if the new money is used to pay off some debt, they might have a chance to turn around. Provided the WC is adequate and the business is managed efficiently. The management, well, ... up to them.

Another thing is if these inventory is actually worth this much? or is it just obsolete stock being carried forward? And are all these receivables recoverable?

Appreciate your analysis on PCH, even i feel that this working capital requirement is to payoff its debt referring to your 3rd point the amount of cash held is not enough to meet that demand.

PCH most probably has supplied there goods to some government projects/loss making entities, this can be one reason why PCH is stuck with a Hugh chunk of receivables once they receive some portion of it they will have the chance of moving forward with more capital in hand.

Tech Firms needs to be innovative, its the most rapidly changing sector, you need to have the latest technological products to cater to customers requirements and customers now days go for the latest products. My feeling is PCH does not have enough cash for this shift. High level of worthless, out of the date inventory levels and high level trade receivables leaves PCH with less cash to expand. Since these inventory might have been held for a very long period suppliers might be refusing to supply more untill the credit is paid off.

So lets hope that this right issue will help the company to walk again, this can be a very good lesson to be learnt.









Last edited by Hawk Eye on Thu Mar 28, 2013 10:53 am; edited 1 time in total

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