Comments on: Annual Report: IFS Capital FY 08 http://www.investmentmoats.com/money-management/dividend-investing/annual-report-ifs-capital-fy-08/ Investing in the stock market Fri, 10 Feb 2012 15:38:33 +0000 hourly 1 http://wordpress.org/?v= By: Owen Teo http://www.investmentmoats.com/money-management/dividend-investing/annual-report-ifs-capital-fy-08/comment-page-1/#comment-36820 Owen Teo Wed, 11 Mar 2009 10:41:04 +0000 http://www.investmentmoats.com/?p=713#comment-36820 Small time businesses need more money than ever to pay its overheads rather then running its business. Hence, credit risk has gone up and therefore credit has tightened overall. On one hand, you slow down lending, so little new revenue. On the other hand, your exising customers also face credit tightening from other banks, so they may be in liquity crisis and you will face loan provising if they cannot pay when principal or interest is due. On the third hand, you have high overheads to pay while revenues is coming down and provisioning is increasing ..... Small time businesses need more money than ever to pay its overheads rather then running its business. Hence, credit risk has gone up and therefore credit has tightened overall. On one hand, you slow down lending, so little new revenue. On the other hand, your exising customers also face credit tightening from other banks, so they may be in liquity crisis and you will face loan provising if they cannot pay when principal or interest is due. On the third hand, you have high overheads to pay while revenues is coming down and provisioning is increasing …..

]]> By: Drizzt http://www.investmentmoats.com/money-management/dividend-investing/annual-report-ifs-capital-fy-08/comment-page-1/#comment-36768 Drizzt Sun, 08 Mar 2009 01:26:27 +0000 http://www.investmentmoats.com/?p=713#comment-36768 thanks for the contribution. I'm with you that Q1 is gonna get alot worse. But i am wondering why short term financing will be this hard hit. If the small-time businesses do not require cash, then it only means that there are no business to go around such that they need any financing at all! thanks for the contribution. I’m with you that Q1 is gonna get alot worse. But i am wondering why short term financing will be this hard hit. If the small-time businesses do not require cash, then it only means that there are no business to go around such that they need any financing at all!

]]> By: Owen Teo http://www.investmentmoats.com/money-management/dividend-investing/annual-report-ifs-capital-fy-08/comment-page-1/#comment-36686 Owen Teo Mon, 02 Mar 2009 10:18:24 +0000 http://www.investmentmoats.com/?p=713#comment-36686 Given current environment, you may have to analyse company's financial statement quarter by quarter. For example, Singapore's 2008 GDP grew by 1.1%, not bad. However, in Q4, GDP declined by 16.4% in Q4 2008 ! Generally all the banks' earnings have been downgraded although FY2008 NI decreased generally by only 40%. But most Q4 numbers were certainly ugly and it will carry forward to 2009. Company's latest finacial forecast does not provide for quarterly number (obviously they do not want to show you how bad the number is), but we can definitely derive from its Q3 and 2008 full year number. If you compare FY 2008 and Q4 2008 numbers, Q4 was a loss of S$1.8 million pre-tax and S$350k post tax ! If you think that Q4 number was a bit alarming, you would be shocked if you know that Q2 loan assets (including receivables) increased from S$277m to S$311m between Q2 and Q3 2008 and then declined sharply to S$256 million in Q4 2008 ! This means Company will be highly velnerable in Q1 2009 at least. Assuming zero provisions and same revenues as in Q4 2008, a decline of another 50% in bottom line is possible. Any new provisions will render it in red territories.... Given current environment, you may have to analyse company’s financial statement quarter by quarter.
For example, Singapore’s 2008 GDP grew by 1.1%, not bad. However, in Q4, GDP declined by 16.4% in Q4 2008 !
Generally all the banks’ earnings have been downgraded although FY2008 NI decreased generally by only 40%. But most Q4 numbers were certainly ugly and it will carry forward to 2009.

Company’s latest finacial forecast does not provide for quarterly number (obviously they do not want to show you how bad the number is), but we can definitely derive from its Q3 and 2008 full year number.

If you compare FY 2008 and Q4 2008 numbers, Q4 was a loss of S$1.8 million pre-tax and S$350k post tax !

If you think that Q4 number was a bit alarming, you would be shocked if you know that Q2 loan assets (including receivables) increased from S$277m to S$311m between Q2 and Q3 2008 and then declined sharply to S$256 million in Q4 2008 !

This means Company will be highly velnerable in Q1 2009 at least. Assuming zero provisions and same revenues as in Q4 2008, a decline of another 50% in bottom line is possible. Any new provisions will render it in red territories….

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