GRAND POWER LOGISTICS GROUP INC. V.GPW

2014 Annual Results

[C32BTT]

The Good:

-Results look pretty good for the year end.  The revenue has increased to $72,736,572 compared to $62,533,671 from last year and profit per tonne shipped has also increased from $187 to $196.  Although, the net profit was only $581,019 for this year compared to $1,512,444 for last years, the overall operating cash flow has significantly increase to $3,452,521, which is a better gauge of how the company is doing than the net income figure.  

-The have bought back a total of 502,000 shares.  Leaving 74,959,278 common shares outstanding.

-They have made an investment of US$1,822,233 in a commercial property in Macau.  Hopefully, it was a good move like the one they made in Yanshan Logistic Park.

-They also paid down some of their debt by $1,227603.

The Bad:

-Looks like the company is trying to raise money for working capital, which is surprising considering the cashflow they have made this year.  So, they want to issue 8,000,000 new shares at $0.05 with 1 warrant allowing the shareholder to buy another share at $0.12.  I'm not exactly sure why they would want to dilute the shareholders value by issuing more shares when they have previously bought back their own shares.  That just doesn't make any sense to me. 

-They still have not yet received the remaining consideration for their investment in the Yanshan Logistic Park from the buyers, so at the moment the company has only collected approxiamately US$1,700,000.  The remaining amount is US$3,439,000 (CAD$4.2 million), which is about $0.056/share and that is expected to be collected this year 2015.  Using that as a proxy, the shares currently trading around that price would make it seem like the shares are undervalued considering the bookvalue is about $0.20.

[XTCXTC]

Thanks for the awesome summary. I totally agree with the stock being undervalued.

[fumperbun]

Something else going on in the background. Really good management dealing with a lot of money coming in. Not your typical TSX company by any means. This one actually has a real business.

[LiquidReality]

Of course something else is going on in the background!! Not that long ago they were buying back company stock. Now they do a 0.05 NON BROKERED private placement. That means they controlled who put the money in, and also notice NO commissions were paid on it. I would guess they are either placing some new strategic investors or averaging down some current ones. Either way, the stock is undervalued