Just forget all about the talking mentioned about ranging and contracts , and picking demand . they say it million of times and it turned out to be only Smoke ! So many things should be addressed immediately
1- the price of whole powder is way lower than one year ago and 2 years ago ( Feb 21 ) , prices went back to lower than they were when HLF sign the deal .
![https://hotcopper.com.au/data/attachments/4878/4878636-4b675d1e2bb54c00acdceba6defd4400.jpg](https://hotcopper.com.au/data/attachments/4878/4878636-4b675d1e2bb54c00acdceba6defd4400.jpg)
![https://hotcopper.com.au/data/attachments/4878/4878638-33248c40e23b311e0a3d11683157c366.jpg](https://hotcopper.com.au/data/attachments/4878/4878638-33248c40e23b311e0a3d11683157c366.jpg)
2- When Announced Theland China was 40USD M dollar i.e. 2.5 Mil every month ( 60AUD/24Month ) , after one year HLF could not reach 10% of this .
3- The ( THM ) revenue is only 7.2 M and this on the cost of 2M marketing ( paying 2 M to market 7M Sales is Rubbish ! )
![https://hotcopper.com.au/data/attachments/4878/4878679-43ac9f456e9bbe52f2f9e8315c36939d.jpg](https://hotcopper.com.au/data/attachments/4878/4878679-43ac9f456e9bbe52f2f9e8315c36939d.jpg)
![https://hotcopper.com.au/data/attachments/4878/4878682-08c76e3fbd182aba0e07b61499765bee.jpg](https://hotcopper.com.au/data/attachments/4878/4878682-08c76e3fbd182aba0e07b61499765bee.jpg)
4- Payables are massive 15.5 ( is HLF late on payment terms ) + contract liabilities 2.3
![https://hotcopper.com.au/data/attachments/4878/4878693-aa1ee11d33a84ae7f1f68ecb1e875861.jpg](https://hotcopper.com.au/data/attachments/4878/4878693-aa1ee11d33a84ae7f1f68ecb1e875861.jpg)
5- Locked capital in inventories are massive as well ( 14.2 M )
![https://hotcopper.com.au/data/attachments/4878/4878695-77ee50efb1ac8943a74f8e9f3f5e8d97.jpg](https://hotcopper.com.au/data/attachments/4878/4878695-77ee50efb1ac8943a74f8e9f3f5e8d97.jpg)
6- Borrowings as we all know 10M not 1K paid back
The way I see it , there is only 6 month remaining on this Company life cycle , unless they did the following :-
1- lift the sales to 64M+ for the next Half to get gross profit 15M ( 31/41.5 = 0.75 )
2- reduce the marketing fees
3- reduce the Employee benefits expense by reducing the salaries , is Former CEO still getting the same salary for his new position ? are we still paying the board the same amount with this kind of losses ?
4- clear out the inventory and free cash , and pay back at least 20% of the debt + the payables if they are out side the terms
other wise we might hand over the THM , or sell portion of the Company to some one who can manage properly . any way , my journey with this company ended with big losses , there was a potential , and still think i was correct when i picked this company , but the way the handled it was a big sign for me that i didnt pick on the right time .
if the Theland contract was Valid , we wont be here discussing the Online Blog that need 2$ to Get 7$ ( with out costs ) !
![https://hotcopper.com.au/data/attachments/4878/4878713-e1c98a16424df3b930daeb607d068ec6.jpg](https://hotcopper.com.au/data/attachments/4878/4878713-e1c98a16424df3b930daeb607d068ec6.jpg)