They Still Have a Long Way to Go
Cold and rainy day here so spent some time reading the Prelim Final Report.
1) Note is that the ratio of Revenue to COGS is roughly unchanged from 2017 to 2018 and nothing the balance sheet to indicate a large increase in non current assets ... so my conclusion is that LaaS is not a factor in the current numbers.
2) Outlook for 2019 is for "Vivid Technology is planning on strong double-digit growth in revenue for the coming year". So 10% minimum 99% maximum, probably somewhere in between.
3) Suppose, Vivid can contain their expenses other than COGS at the same level as 2018. If that were the case, and the same ratio between COGS and revenue is also assumed, VIV needs to increase revenue by ~ 300% to be profitable. Might be slightly less is they can extract themselves from the "Share of net losses of associates accounted for using the equity method".
4) If LaaS takes off, then the revenue stream will be delayed (spread over many years) but COGS will stay the same so profitability will be further delayed.
5) Still of the view that they need further funds to keep this business running - possible CR and borrowing.
6) Placing VIV sentiment back on Sell but will probably keep my (small) holding.
DYOR - anyone have a different viewpoint?
VIV Price at posting:
4.7¢ Sentiment: Sell Disclosure: Held
