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Old Chang Kee recorded a big loss in Q4.

Tuesday, May 30, 2017


I received a small handful of messages regarding Old Chang Kee's latest results and this is a quick blog about the matter.

Old Chang Kee is a fantastic cash flow generating machine and it remains one of my better although smaller investments. I have no intention to let go of my investment because nothing has changed.

Of course, when I saw the article in The Business Times declaring a huge loss for Old Chang Kee in Q4, I took notice. I spent one minute looking at the financial statement and decided that all is well.

One minute? Yes, only one minute.




I just looked at the income statement to see what has changed. Noticing a spike in expenses, especially other expenses, I scrolled down to find the reasons for the spike.

What I was looking for was whether the spike was going to be material and whether it was going to be enduring in nature. Some of the increase in expenses will continue to be challenging. Labour cost. Rental cost. You get the idea.




However, most of the increase in expenses comes from a revaluation loss which is a non cash item. Non cash item does not affect cash flow. So, unruffled, I went back to gaming.

To be investors, we should pick up some basic knowledge about accounting. Leave the more complicated stuff to the professionals but we should have some basic knowledge.

Financial statement:
http://oldchangkee.listedcompany.com/newsroom/20170529_174958_5ML_AYW9SB1XWVC26BOD.1.pdf

Related posts:
1. Income Statement.

2. Recommended books.

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