Yeo hiap seng

Yeo hiap seng
1) Sitting on a one off huge pile of cash of 138.35 million from the disposal of super shares. Used partially to pay for disposal of subsidiary (-1.21million) and decrease in (-3.27 million) from fnb division 
2) Decrease in q1 revenue due to dispute with Cambodia distributior. Sales will be decreased in the short run 
3) Challenging business risks include forex rate, weak market condition, delay shipment to markets, water provision 
4) Decline in gross profit due to lower revenue and higher cost of finished goods (temporary, not yet delivered goods). 
5) Company is able to successful decrease advertising, distribution and administrative experiences to soften the decrease in profit. 
6) Loss of pepsico exclusive bottling agreement. 
7) Preliminary analysis on its balance sheet revealed after 2014, there is a sharp fall in profitability and revenue that decline has been persistent since then and the company profitability has not improved finished. 
8) Reviewing the annual report from 2014 to 2017, management made a critical error of buying assembly lines that failed to work? Recently dispute with Cambodian distributor Losing market share in some markets. Cambodian expected to be increasing market share but recent dispute with Cambodian distributor? Weak profitability due to market conditions? 
9) Attempts to restructure is to cut expenses and do cheesy marketing gimmicks like give out drinks and organise runs, Emphasis in automation to increase productivity 
10) The crux is losing market share and decrease in demand. It is not a matter of increasing supply and automation. If company resorts to further price competition it will not benefit shareholders. No moats 
11) 3 prong strategy of changing packaging and introducing new drinks, diversify into food production (which is not potential with its core competency but potential diwosify ), form partnership with other brands to improve distribution and sales 
12) We can believe that at face value. However it is possible that management is incompetent and pushing away all the faults to external factors, rather than taking concrete steps to restructure the company. Lousy management will continue to cost this company in the long run, and without any moats to protect the company, fundamentals will continue to deteriorate and what is cheap can get cheaper. 
13) It is trading at pe1.4 now, but I believe it is fundamentally weak rather than just undervalued at the moment. From Peter lynch philosophy, I cannot find a valid reason to ever buy this company. It is no dividend stalwart, growth and profitability is declining, non-cyclical (at most market cycles) and a pretty lousy candidate as a turnabout. There is no reason to buy this company at all and there are simply better options out there. 

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