Please click and read this disclaimer if you wish to continue with the contents below.
For Chinese version click here
1) With the lock down of cities in China during Covid19 emergency period in the first few months, top and bottom line decline was to be expected.
Total revenue for the six months ended June 30, 2020 amounted to approximately RMB733.9 million, representing a decrease of approximately 19.5% .
Profit and total comprehensive income attributable to owners of the Company for the six months ended June 30, 2020 amounted to approximately RMB247.5 million, representing a decrease of approximately 16.6%.
The Board has declared an interim dividend of HK3.28 cents per Share(4.21 cents 2019) for the six months ended June 30, 2020.
2) COVID-19 was brought under control in May, and the delayed market demand was gradually released, resulting in a sustained and rapid rebound in operational data and financial conditions in May and June. This is a good hint on possible strong performance restoration in 2H onwards.
3) The net profit margin remained the same as the same period last year, at 41.9%. This is a compliment to the management.
4) Preneed service contracts increased by 78%. The main growth driver remain unchanged.
5) The management active transition to Cloud technology for tomb sweeping may have reduced the company's losses drastically. Because most places were under mandatory lock down.
6) Accounts receivable and net operational cashflow (312mil vs. 354mil) remained stable even during the most destructive period.
7) The Group made a major breakthrough in government procurement for their cremation machine, from contract sales of 10 sets of purchase orders. As of June 30, 2020, the group has signed contracts for 22 cremation machines(vs 9 sets prior to 1H2020) but has not yet delivered them. It is expected that the future business of cremation machine will make a considerable contribution to the group's revenue.
8) FSY has a good management team, proactively making correct decisions to mitigate business downside risk and to ensure continued growth.
9) The impact of the epidemic on FSY is still not small. Shanghai area alone has topline reduction of 100 million RMB(347mil vs 443mil). Hints on more acquisitions in the second half of the year.
10) As long as management is reliable this counter cyclical stock should have a long slope track. Short-term epidemic events should not change the long-term value proposition. See what the market thinks on Monday. So far registered a gain of 17.11% from my cost price.
No comments :
Post a Comment