CAMK (Camkids) manufactures clothing, footwear and equipment for children and teenagers.
It is a Chinese AIM company, which automatically makes it univestable. All the usual red flags are there, including:
- short listing history
- low PE and PBV
- no cash dividend despite being awash with cash
- operating margins which are far too high to be realistic
Profits seem to be declining, so I guess we should expect the whole thing to be toast eventually.
As ever, most of what the company says doesn’t stack up. They claim a need to conserve cash, which is why a dividend wasn’t paid. Later they say that they placed significant sums in medium-term deposit accounts in order to attract a better rate of interest.
Well, surely, if they had funds to put on deposit, then they have sufficient to pay a dividend? Their cash is greater than the market capital of the company. The could theoretically buy back the whole company with cash. How can a company with so much cash claim that they need to conserve it?
This company follows exactly the same patterns as other Chinese AIM companies, and will eventually end in exactly the same bad way.
May you all be well.