This is a great video on fundamentals of Opensys done by YAPSS
Which I think is a waste if not shared with many smart i3 investors.
https://www.youtube.com/watch?v=Uu-lDarLOI0
If you are too lazy to watch the whole video, here’s the snapshots of the key points
Which I think is a waste if not shared with many smart i3 investors.
https://www.youtube.com/watch?v=Uu-lDarLOI0
If you are too lazy to watch the whole video, here’s the snapshots of the key points
Opensys’ free cash flow and cash yield
FCF = CFFO – Net Capex
Cash flows from operations (CFFO) was
RM20.9 million last year, way much higher than the net profit of RM10
million. Net capex remained the same at RM6 million.
CY = Free cash flow (FCF) / Price
FCF for Opensys surged 48% to RM14.8
million last year as compared to RM10 million in the previous year. At
34 sen, the cash yield (CY) is 15%.
Is cashless society a threat?
“In tech-savvy Singapore, where
almost everyone has a mobile phone, nine out of 10 people, still prefer
to pay for everyday transactions the old-fashioned way – with cash.
According to interviews conducted by Bloomberg in September 2017, some
of the reasons why Singaporeans prefer cash are because it is more
convenient than swiping a bank card or in case when they can use digital
devices, machines sometimes break down and cannot process a payment.”
Read what the management had to say (Warning: You will change your mind after reading)
Cash cow
“In
maintenance services, the banks pay us an annual maintenance fee of
10-12 percent based on the selling price of the machines that we sold
them. In return, we service and repair the machines to ensure high
availability and optimum uptime.” Opensys annual report
Opensys
mentioned that it had installed over 2,500 CRMs in Malaysia since 2014.
Maintenance fee is recurring after 2-3 years free warranty period.
Lifespan of machines is 8-10 years. What is total profit for 2,600
machines? Recurring for the next 5-7 years? Nobody seem to realise
Opensys is a cash cow in the making!
Disclaimer: The article above does not represent a recommendation to buy or sell.
https://klse.i3investor.com/blogs/Amazinggrowth/204254.jsp
