Disclosure: I own IFM stock, bought it at much higher price. So believe me, I don't want to hear bad news either.
So a couple days ago I read the short announcement, profit is stable but for FX, dividend slightly lower but still a great yield, and so on, and bought more.
Then today I finally got my ass to go through 22 pages of the report and bam, it shits me:
Page 6. Development costs capitalized is up by 3 millions. I thought a few months ago they announced that their new software is out and they finally will expense their "shadow expense" out of the balance sheet? What the heck?
They paid $8 mil in goodwill for company earning $0.5mil in revenue, can't comment on that. Their decision.
Then page 7, bank borrowings up from ZERO to $3 million...
My conclusion: if we take out $3 mil that they capitalize (Development cost, FFS, how much is that really worth?), they actually barely making profit. Then they pay out 80% of their "profit" as dividend, and has to borrow money to finance that...
Did I get it wrong?
anyone else found dec'11 report alarming?
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