Thursday, February 25, 2016

Quick review of CMPH and Venture Q4 results

will be done using the same format as the previous post. No flooding of numbers.

1) CMPH
Hope to see:
a) 3.5 cents dividends maintained 
b) OCF of 1.8 - 2 billion HKD
c) Stable operating numbers for it roads, especially YTW

In reality:
YTW continue to do well but it's JVs are not doing so well. 3.5 cents dividends are  maintained but OCF is only 1.5 billion. 


Guixing and Guiyang are profitable and NP improving from previous management 

JiuRui operating numbers is still bad.

Management outlook is challenging and will have an impact on tolls and revenue due to lower economic activities. 

Management also announced scrip dividends scheme which will save the company cash of the owner opted for it but will end up diluting the stakes of Miniority shareholders.

Action:
Hold, will sell into strength if Mr Market likes the results which is highly unlikely. With the absence of anymore growth drivers to provide buffers, and general market sentiments, chances are this will be a panadol type of investment. 

2) Venture:
Hope to see:
a) continuous recovery in earnings
b) dividend of 50 cents maintained 
c) Better margin and FCF

In Reality:
I got what I wanted. NP and FCF now cover more than dividends payout with the balance sheet improving. 

Action: Hold



4 comments:

  1. Going forward, do you think 7 cents annual dividends can be maintained by the operating cash flow ?

    ReplyDelete
  2. Hi Betta man, chances are higher than OCF cannot sustain 7 cents payout

    But they can wait out the repayment of loans for the 2-3 years by opting for scrip dividends

    ReplyDelete
    Replies
    1. If they are not buying anything more, the expenses will be much lower then

      Delete
  3. Now they doing scrip dividends
    Be careful...
    Rights issue, scrip dividends... Big red flag of constant dilution
    If its a growth stock like banks, investors wouldnt mind scrip as they can get more shares
    But for a dividend counter, investors want cash.. And management is avoiding paying out cash!

    ReplyDelete