Naibu – The Question is do you believe? Evil Knievil vs. Lucian Miers (I'm with Lucien)

Comments

1. ---

   wildrides

   29 January 2014, 12:19

   Interesting …………….. I am siding on the Turkey theory ……………..since all your evidence points that way .
   The fact that its a company operating in China tells you almost all you need to know .

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   Jonty

   29 January 2014, 14:06

   You would have much more credibility if you’d researched more carefully and reached this conclusion BEFORE recommending these as a buy through the subscription service Hot Stock Rockets.

   Changing your stance is one thing and everyone is entitled to do that when new facts appear. But do you not feel even in the slightest bit ashamed of making that recommendation and now converting to ultra bear?

   My subscription will be cancelled. I used to respect you and hold you in high esteem many years ago. This kind of financial journalism is not worth paying for and does you no credit.

   And yes, I fully expect and am ready for an abusive post in reply.

3. ---

   Tom Winnifrith

   29 January 2014, 14:34

   Jonty

   It was not the greatest tip at HSR but we got our readers out as soon as we realised the error of our ways. and with only a small loss. If you are indeed a subscriber you would know that.

   Over on Bulletin Boards I know that folks never make mistakes. We are human. If we make an error we admit to it quickly. that is the honest thing to do.

   Many years ago you respected me…hmmmm. Well I made mistajes then too. Perhaps one thing I have learned is to fess up quickly if you have made a duff call – “the first cut is the easiest”

   Best wishes (no abuse from me)

   Tom

4. ---

   Michael Boyle

   30 January 2014, 22:24

   Tom, I have respect for other posts which you have written to highlight the shenanigans of various companies and city institutions.

   However I believe that you are incorrect here to back Lucian Miers based on the research he has presented on Naibu. Anyone familiar with this Company knows that the articles by Lucien are not a fair critique of the Company and contain numerous errors. When I have time I will attempt to provide answers to all the areas you raised.

   However I would like to provide an answer to your last paragraph now with regards to Question 4 and the so called out performance of its peers.

   Naibu stated in their 2013 AGM Q and A (available on the Company’s website)

   What actions have been taken to check cash balances at Naibu’s bank? Are the balances held in China and Hong Kong?

   The Group’s cash is mainly held on deposit with the Agricultural Bank of China (one of the four largest state – owned banks in China). Cash management is carried out in accordance with statutory regulations and the Company’s rules, which includes for example segregation of duties, four – eye checking, etc. Bank reconciliations are also performed monthly by checking accounting records against bank statements to verify cash and bank balances.

   With regards to gross margins and the statement that Naibu’s gross margins are higher than it’s competitors, this is putting it plainly, incorrect.

   For the years 2010, 2011 and 2012 gross margins at Anta Sports (Largest player in the Chinese sportswear market) was 42.8%, 42.3% and 38%, at Peak Sports (mentioned by Lucien Miers) they were 38%, 39.4% and 36.5%.. Meanwhile at Naibu gross margins were 29.4%, 28.3% and 28%. Naibu’s gross margins are clearly not higher. Also worth remembering that since Naibu are targeting the mass market rather than the premium brands market, the gross profit per item is significantly lower than the other Company’s highlighted.

   As to the current dire state of the Chinese sportswear market, Anta’s interim results show gross margin returning to 41.1%. On 13th January JP Morgan commented ‘ The improving operating data from ANTA SPORTS and other sportswear companies over the past few months and their sustainable growth momentum will likely support the stock price of ANTA SPORTS, JP Morgan said. However, the broker said it remained conservative on sportswear stocks in long term. The inventory levels of ANTA SPORTS are under control and the worst time is over, JP Morgan said, thereby hiking the company’s 2013/14/15 earnings forecasts by 5%/7%/10%.’

   Furthermore, if the market is any sort of guide to sentiment and prospects, the fact that the shares in question are up substantially since last summer, Anta Sports(+70%), Peak Sports(+61%), points to an industry in recovery.

   Additionally with regards to Naibu’s performance it has to be remembered that they are not attempting to compete with the likes of Nike and Adidas in Tier 1 and Tier 2 cities where the competitive environment has been most challenging. Most of Naibu’s stores are located in Tier 3 cities, an area that the Chinese government has focused on developing. Naibu also mentions that its focus is on the mass market buyers, with an emphasis on the younger buyers, which is also another possible reason to explain why Naibu has been able to maintain profit growth. AIM listed Camkids has also managed to maintain year on year growth in profits despite the downturn, which it puts down to it’s focus on the childrens market which has been more resilient.

   I hope my comments on the Company in question show that Naibu could indeed be everything they claim to be. It’s rather frustrating to read comments like ‘it’s a Company operating in China, that’s all you need to know’, unfortunately most AIM listed Chinese Company’s are regarded in this way. It appears they are assumed guilty until they prove their innocence.

5. ---

   Fred

   1 February 2014, 08:47

   How about doing a little research? Naibu declared who they bank with in a Q&A on their website.

6. ---

   Bint Laden

   20 April 2015, 11:11

   Michael Boyle and ‘Fred’ must feel pretty foolish now. If the cash existed (and claiming you have £Y with ABC Bank proves precisely nothing) then the directors would appear to have stolen it all.

   Nice of them to pop back and admit their error, of course. Not.