Tuesday, 8 January 2019

Short Write-up on Medinex and UnUsual Limited. A longer Write-up on Road King


First of all a very happy 2019 to all, hope everyone had a good first weekend of 2019. Personally I had a good weekend as I attended Wang Lee Hom's concert and had a good long talk with a friend at Macs later on that lifted my mood.
Moving on to today's write-up .........
Medinex
HC Surgical released its 2nd quarter results earlier in the day, 
Share of Results of an associate (Medinex) came in at $6000. This is a decrease of 99.1% compared to previous year's same quarter results. This would probably indicate that Medinex earned lesser than $300 000 for the 2nd half of the year as compared to $1 057 000 in 1st half of 2018 . This is a fall of 70% from first half to 2nd half. It remains to be seen how this IPO fares in the long run but I have voiced my concerns in my previous post on the IPO.
UnUsual Productions
If number of concerts in Singapore is a good gauge of revenue then the below table might be useful
In $
2017 Q4 Jan- March
Q1 April- June
Q2 July- Sept
Q3 Oct- Dec
(Estimations)
Concerts Occurred in Singapore
8
3
9
7
Revenue
16 323 227
6 029 172
18 809 192
13 900 000
Gross Profit
6 169 051
3 861 289
6 301 041
5 560 000
Gross Profit Margin
37.79%
64.04%
33.49%
40%
Admin Expense
1 878 498
1 154 674
2 046 442
1 807 000 (13% of revenue)
Income Tax Expense
867 621
510 617
1 058 201
821 070
(21.87% of Profit Before Tax)
Profit After Tax
3 485 625
2 359 258
3 242 773
2 931 929
EPS (Cents)
0.33
0.22
0.32
0.28

-A key thing to note would be that productions(61.65%) bring in higher margins than promotions(22.53%) in FY 2018. Also according to FY 2018, ticket sales contribute to promotions. This could explain why Q1 had better margins despite Q2 having higher concerts occurring. With that I would estimate gross profit to come in at $ 5 560 000 in Q3. My estimations of Profit after tax would be 2 931 929 or 0.28 cents
- Moving forward, it seems like there is only 4 concerts in Q4 (January to March). It remains to be seen if more events are added or overseas collaborations(those not listed on UnUsual website) would improve the top and bottom line.



Road King (HKEX: 1098)
Road King has released its operating statistics for full year 2018
In RMB millions
Q1
Q2
Q3
Q4
Full Year
Toll Revenue
698
772
857
752
3079
Property Sales
6978
10247
8298
8980
34503
Total Sales
6978
9549
9155
9732
37582

As Compared to full year 2017
In RMB millions
Q1
Q2
Q3
Q4
Full Year
Toll Revenue
Not Given
Not Given
Not Given
Not Given
2661
Property Sales
8992
6882
7392
5066
26304
Total Sales
8992
6882
7392
5066
28965

Total Sales amounted to a year on year gain of 29.7%. This is particularly impressive as I have previously read online that the Road King Management aims for 30 000 million in property sales in 2018 and they have achieved it.
Road King's property sales are usually recognized as revenue in the following years ahead and this year's sales would have provided some light on its FY 2019 results.
To have a better picture, let's compare to other listed property companies with operations in China
In RMB Millions
China Aoyuan(HKEX 3883)
Country Garden(HKEX 2007)
Logan Property(HKEX 3380)
China Vanke (HKEX 2202)
Shimao Property (HKEX 813)
Road King (HKEX 1098)
Full Year Sales
91 280
501 880
71800
606 950
176 146
34 503
Full Year Sales per Share
34.04
23.28
13.07
54.98
52.23
46.04
1H Portion
44.13%
61.93%
49.4%
50.2%
41.1%
49.9%
2H Portion
55.87%
38.07%
50.6%
49.8%
58.9%
50.1%
Gross Margins (1H 2018)
28.6%
26.5%
37%
33.7%
31%
47%
Net Profit Margins (1H 2018)
10.8%
12.3%
25%
12.8%
14.3%
20.2%
Net Gearing Ratio( 1H 2018)
67.5%
59%
66.3%
32.7%
62.7%
49%

From the table above(which is not comprehensive), we can tell that there isn't a clear cut winner but Road King has done well in the gross margins segment by topping the table. It is also believed that Road King has produced the highest gross margins in 1H 2018 among all China listed property companies. In the other segments it did not top, it placed itself in top 3 among the 6 company comparison. As not all December sales number are released yet among the various companies, this result is just a small sample size.
Nevertheless, I would be interested to hear about the property sales targets and estimated gross margins from the Road King Management in 2019.

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