Just a few things I noticed in the financial report
1. JIN is an agent selling lotto tickets however when reporting revenue & expenses they report as if they are the principal. So whilst they made $76m in sales this is really only on behalf of the companies who run the lotto. I think the commission they get is around ~9% of each ticket price and this is what they should be reporting as revenue. What they are doing isn't technically wrong but its an agressive accounting choice probably made to give the appearance that its a much larger company.
2. On page 52 of the 2011 Annual Report you can see that they have spent $2.7m on Customer Acquisition ie marketing. This isn't a huge problem if they are getting customers which they are....but capitalising the expense under intangibles is another agressive accounting choice. Most companies would expense this and if you did this it would take away a large chunk of Net Profit. Its a similar situation for Website development. A more conservative approach would be to expense these costs rather than capitalise and give the appearance of higer earnings.
Still think it could be a good stock but just a little hesitant when looking at the accounting choices the company is making. What are your thoughts?
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