I've just started to follow JST and would like to take a position. My biggest concern that I haven't seen a good explanation for is why its account receivables are so high. It has $151m in AR as of 9/30/12 versus TTM revenues of $220m. This is over 9 months of sales in receivable. As comparison ABB has roughly 3 months of sales in AR.
No way should any company wait 9 months to collect cash on a sale. I'm concerned there may be some kind of revenue recognition issue with the accounting. Does anyone have a good answer?
since you just started to follow JST, you may not be aware, but this company came public as an IPO not a RTO. Doesn't have VIE structure, consistently has paid dividends. Silicon prices impact number of competitors and SS prices have been falling in PRC. The next annual report should comment on SS impact or hopefully it will be addresses in CC, i will try and ask on CC if i am able.
some thoughts, San Bian Sci-Tech Co., Ltd.(SHE:002112) to me is a much better comparison than ABB both in terms of relative size and the focus of what the companies do. JST AR to revenue is in line with San Bian. Over time the ratio of Working capital to revenue for JST has pretty much stayed in the same range 50-60%, there has not been really a great increase over time.