Hongwei Technologies half year financial results
For Hongwei Technologies, there weren’t much changes in this half year result presentation.
Net profit fell from 29 million RMB to 25 million RMB. The main reason for the fall have been a 165% increase in interest expense and 93% increase in income tax. Other than that Revenue grew 1.9%.
The shocker for Hongwei technologies lies in the cashflow statement. You will see a -17 million RMB operating cashflow vs 16 million RMB operating cashflow. Much of this can be attributed to a 30 million RMB increase in Trade Receivables, though the good thing is investnories went down by 4 million.
Its dissappointing that there weren’t any explaination why the receivables balloon by so much. I really hope this is a one time thingy and it will be collected next quarter.
The lifeblood of a dividend stock lies in its operating cashflow and if its so inconsistent, we might as well look elsewhere. However, do note that this is a half year report and its better to wait for the full year results to evaluate whether to add or sell.
I’m covering this under my dividend screener, but if the cashflow turns out to be bloody inconsistent and the economics of business is bad as a consistent dividend play, i would take it out.
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[...] Hongwei Technologies half year financial results The shocker for Hongwei technologies lies in the cashflow statement. You will see a -17 million RMB operating cashflow vs 16 million RMB operating cashflow. Much of this can be attributed to a 30 million RMB increase in Trade Receivables, though the good thing is inventories went down by 4 million. Read more… [...]