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eFuture Holding Inc. Message Board

  • mmmparsley mmmparsley Jun 29, 2010 10:38 PM Flag

    Audited 20-F Is Out...

    I am grinding my way through it tonight.

    The spectrum of markets served by Efuture (the holding company) is vast. They don't need all these projects to succeed to justify the very small market value investors are giving to this company. Although they've been expanding their sales and marketing force as well as hiring many new engineers and customer service reps to meet and anticipate future demand, they also sterss in the report the ability to scale back if the Chinese Retail and Consumer Goods industries unexpectedly drop off precipitously.

    Although of all global sectors, Chinese Retail and Consumer Goods is one of the least likely to cool off in the next few years, it's nice to hear that they can rapidly curtail costs if demand drops.

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    • Grt report . Diverse customer base and grt partnerships. They had a statement of 20million of orders or backlog that should support growth for next few years. I didn't understand that exact statement whether it was just backlog or new orders in 2009?

      • 1 Reply to jtechkid60
      • Backlog...

        No timeframe for revenue recognition was given.

        Was it really 20 million? I thought it was somewhat less than that. Would you mind looking again to confirm that number.

        After analyzing the cash flow statement for quite some time and reading the detail of how they came up with their estimates for certain numbers, this company is about as operating cash flow breakeven as possible.

        Not all ledger lines are equal, so I tried to adjust to cash flow statement so that is discounts all one-time payments (such as executive options/restricted shares). I also discount all amortization due to "intangible assets", because it's not like the company has to repurchase these companies, or companies like it, to continue growing. Organic growth from these acquisitions and the core business is likely and expected, as stated multiple times in the annual report. The purchases (Wangku 51%, bfuture, Proadvancer,small stake in Cfuture etc.) are behind them, and they have spent the money (or issued the warrants associated with the purchase) already.

        In other words, they are writing down as a loss depreciation in assets that are actually continuing to appreciate in value as their respected brands grow. And if you've been reading the Chinese press on e-future subsidiaries - most are indeed growing (signing up a diverse client base) and gaining positive exposure.

        The numbers don't look good on the income statement, and that may be scaring many away, but the company is quite healthy.

        I would be more worried about the Cayman Islands/China connection if executive salaries were inflated and they had no skin in the game. But executive salaries/board salaries are very fair and they have quite a lot of skin in the game. About 19% of the company (and growing) is owned by employees and executives of E-Future and E-future subsidiaries.

        Dave

 
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