ThumbTackInvestor

@huangxinlong @dexterchoo
I've had time to go through in detail the FY17Q1.
You guys already know about the increase in operational costs due to the metric acquisition.
Backing out all the effects of metric, the expenses either grew very marginally (selling and distribution expenses increased by RMB 0.5mil) or even decreased (Administrative expenses would've dropped by RMB 3mil if we exclude metric)

What's more interesting to me though, are the changes in the revenue mix.
I wrote about this way back in my initial investing thesis: Dutech is increasingly going to change from High Security to Business Solutions.
In FY17Q1, for the 1st time, the GPM for BS has now exceeded that of HS.
GPM figures:
HS in 2015: 32.1%
HS in 2016: 32.0%
HS in FY17Q1: 26.7%

BS in 2015: 28.6%
BS in 2016: 29.2%
BS in FY17Q1: 27.8%

Over time, GPM for HS should either be maintained, or drop (depending on steel prices). BS's GPM should increase, but I'm not sure, looking at the data above, whether we'd get the 30+% type of figures for BS, as we have had in HS. So perhaps the GPM would drop eventually, as Dutech's revenue starts to having strong weightage from the BS segment instead of HS.

Inventory shot up by 60+mil RMB, with a corresponding drop in cash outflow in the CF. They spent a lot of money buying raw materials last quarter.
Obviously, going forward, turning around metric would be the key.

But you guys already know that.

huangxinlong0

Reply to @ThumbTackInvestor : I was queuing at 46.5 and some fellow cut my queue. Decided not to haggle and bought 10 lots.

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huangxinlong0

Waiting for your blog post hehehe

huangxinlong0

Reply to @dexterchoo : http://www.nhiz.gov.cn/tz/infodetail/?info...

some digging i did. Share with you Dexter

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