Pink Sheets

I haven't been blogging any of the YaSheng news.

Q1 Results

Balance Sheet
This is largely unchanged, although inventories and AR are down slightly from year end.
AP is down more, debt is down.
Equity increased by around $13 million.

Income Statement:
Revenues are down slightly from Q1 '04
Gross profit is unchanged
SG&A is up 2.7%
There's an error in the statement: Q1 '04 total operating expenses don't include "S", just "G&A". The error isn't propagated.
Operating income is down slightly.
Net income is nearly the same.
9 cents a share again.

Cash Flow:
There's a huge difference in depreciation. In Q1 '04, depreciation is $1.9 million. In Q1 '05, it's $11 million. This is propagated, so it's not a typo or anything like that. When I look at the 9 months cash flow from the SEC 10-Q for Q3 '04 (and here), it looks normal. YaSheng is supposedly working on getting audited results right now. I'll bet they're getting a lot of work from the auditors.

Cash flow from ops dropped from $35 million to $28 million. Capex increased from $1.4 million to...huh? I've never seen this before. Capex in Q1 '04 was actually a negative $1.4 million. It's more normal in the SEC 10-Q for Q3 '04.

Capex was $13 million, leaving $15 million in apparent free cash flow. There was $15 million for an acquisition, but YaSheng backed out (see 4/1/05 press release) and the acquisition cash was backed out in Q2's cash flow statement.

Speaking of mistakes, I had passed on YaSheng but then changed my mind and invested in them based on what I saw in the Q2 results, but I didn't go back and write down everything in the blog. I missed the red flag stuff above and let's find out what other mistakes I missed in the Q2 results besides the two items I made fun of.

Q2 Results

On the balance sheet, I'm looking mostly at the differences from Q1, but also looking for any weirdness from year end.

Balance Sheet:
Cash holds steady
AR is up from Q1 and Q4.
Inventories are down slightly from Q1.
PP&E continues to grow by a large amount. This is definitely a capital intensive business and growing the business is eating cash.
AP continues to drop

Income statement looks very good from a does-this-make-sense perspective. Earnings are up to $22.6 million or 15 cents/share.

Cash Flow:
Depreciation is spot-on here for both years.
Cash flow from ops is $57 million.
Capex is $42 million, leaving $15 million free cash flow (none in Q2).
They paid $3 million cash in taxes vs $1.5 million in prior year.

I found YaSheng's old website, which is interesting. Glorious development.

All the rest of the press releases are useless hype.