rising in a down market , page-5

The announcement this morning is perhaps a DIRECT response to my previous post re having the capital to both pay out dividends as well as to expand to phase 4 and for M&A. They simply cannot do both.

Its good to see management is reading this forum :)

Also, unless I am missing something, I believe their gearing is misreported on page 11 of 2009 financial report, see this section from their annual report:

"The following table shows the gearing ratio which is used by management as a performance measure of control.
Total liabilities per statement of financial position 89,385,056
Less notes receivable per statement of financial position (19,915,998)
Total borrowings
69,469,058
Less cash and cash equivalent per statement of financial
position
(24,116,119)
Net debt
45,352,939
Total equity per statement of financial position 42,023,644
Total capital 87,376,583
Gearing ratio (Net debt / Total capital) 51.9%
The notes receivable ($19.9 million) are managed with the notes payable ($23.0 million) as a net position,
while the cash is deducted as it is effectively used as partial security for letters of credit on raw material
purchase, borrowings and notes payable."

If the notes rec & payab are managed as a net position, why then have they not excluded payables from total liab but minussed receivables. Real gearing would seem higher than 51.8% at more like 68%.

This Chinse nylon tarrif and increase in export rebate tax bodes well for both domestic and international yarn demand and it will be interesting to see how they go in 2010.