A pity the fake news in the other thread didn't dip the price...

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07/09/21

16:14

Post #: 55897232
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Originally posted by VYR: ↑

Whilst its good to see the JV turning a 5.5% profit its interesting to note that its revenues were only $23,820,000 which is less than VMT's cost of sales $28, 704,739 ?????

In the second half of 2020 its revenues were $28,652,928 which is understandably more than VMT's cost of sales of $26,035,455 given the JV also manufactures the bikes Super Soco sells in China.

When I fed VMTs revenues and costs into my spread sheet it was expecting the JV revenues to be $31,575,000 so they seem to be short to the tune of $7,755,000

Maybe now this change has been discovered VMT is asking some questions of Its JV partner and the result could well be more revenue and profit emerging.

The JV profit margins will grow strongly as revenues grow as a lot of the costs (rent, utilities, depreciation, administration etc are fixed and extra revenue is very creamy as sales grow.

We have been told the factory has a capacity of 400,000 units PA and the current two lines can produce 130,000 units with very little increase in costs.

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A pity the fake news in the other thread didn't dip the price some more, I was hoping to pick some extra up in the low 40's. Alas, I think those days might be behind us now.

Separately, I had a lawyer friend of mine confirm that these 'enforcement of contract' disputes are commonplace in manufacturing. He also advised that Chinese courts basically always (97% of the time) end up in favour of the Chinese company.

Cheers

VMT Price at posting: 45.5¢ Sentiment: Buy Disclosure: Held
7 Upvote

0 Great analysis

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