Reply To Comment On Parkson Holdings

Posted the following yesterday, A Quick Look At Parkson Holdings Earnings

caseywong said...

• hi, i have been a silent reader of your blog. I have some holdings in Parkson. Would like to know what is so unreal about the receivables part? And what about the borrowings? Mind to share more of your view on this? Thanks.

Casey,

Unreal about the receivables part?

Compare the first table and the second.

The first table showed:

1. Trade receivables at 14.411 mil
other receivables at 261.134 mil

total: 275.545 million.

The current table shows receivables as a lump sump, at 451.349 million.



Think about it...

Here's my reason why I think it's unreal.

a. Last I checked, Parkson Holding is a retail business and in the economics of a retailing business, I cannot understand how Parkson can even have receivables. What exactly are they selling on credit? Who OWES Parkson Holdings so much money? And why? I for one cannot see no logic in why a retailer would even have a receivables account!

b. The size of the receivables. At 451.349 million, the figure is insane. It's simply too high! In a short span of 3 months, the receivables jumped 175.804 million!!!!!

Now try not to think about stocks for a moment. Indulge with me for a moment.

Think of a real life normal business where you and your business associate has setup. And imagine you went on a holiday and upon your return, your partner shows you the accounts and you find out that suddenly so many people owe you so much money. How? Wouldn't you not be concerned? Wouldn't you find it so unreal?

I do not know about you but I write what I feel. And in this instance, for Parkson Holdings, I find it so unreal.

Borrowings. I find the amount of borrowings Parkson Holdings is unreal too. Yes, in my flawed opinion, it's in my opinion that Parkson Holdings is too unrealistically high for me to consider Parkson Holdings as an investment grade stock. Do understand that for the borrowing issue, this is my own opinion, which like I said it is obviously flawed, hence, I do hope you take my view points stated here with a pinch of salt. And since I have repeatedly said that I am no investment advisor, I do hope you take all these comments as a mere second opinion and if you disagree, it's your rights to do so.

Cheers