I do not own the share of China Oilfield, but I did study a little bit about the company during the IPO time. Basically, it has an interesting business. That is to use the tertiary oil recovery technique to extract more oil from the mature oil well and their main business is focusing on Daqing area.
Today I saw this research report regarding the company for FY08Q1. Main points:
- No revenue
- RMB15million loss, 10million for stock option grant expense
- 2H for 80% of full year turn over
- little earning visibility
The stock expense is more accounting related and does not affect the cashflow. That means you could loss money but there is no cash outflow incurred for the company. Likewise for company which report earning increase, but there is no cash coming into the company really.
Lumpy earning is too much to my liking. Investor has to ask himself how much he understand about the company business model and whether can make an educated and reliable forecast of the earning.
Tuesday, 6 May 2008
Subscribe to:
Post Comments (Atom)
0 comments:
Post a Comment