Will they be buying tins of white stuff in their singles or by the dozen to store for the future & when they become unsingle
then start multiplying ? ;)
Printable View
What a shame on the part of Management to issue further cheap options to Chair and other Directors while the company is doldrums and haven't fully come out clean on recent debacle, not a great look on your part Ronnie :t_down:
Attachment 12117
You think so? Have a look at their reviews and customer service. Disappointing. Google easycom express or qexpress and have a look for yourself at what customers have to say. And ontop of that the issue of shares to directors at this stage? Poor form. Glad I excited. Can’t believe I was a top 10 shareholder in this mess. Already recovering my losses from other businesses with better potential.
https://www.nzx.com/announcements/364151
QEX Logistics Limited (NZX: QEX)Monday, 30 November 2020NZX LimitedWellingtonTrading result for the six months ended 30 September 2020The Board of QEX Logistics Limited (NZX: QEX) has today announced the unaudited half-yearfinancial results of the business for the six months ended 30 September 2020 (HY2021).
Overview
● COVID-19 related diagou sales decline and changing consumer habits in China affectedrevenue and profit for the six-month period
● The market remains challenging with squeezed margins continuing to create significantpressure across the sector● QEX continues to diversify channels to meet changing consumer purchasing trends in China.Two new channels, livestream and direct-from-warehouse sales were launched and theAustralian international parcels business now operating in trial phase
● Investigations remain ongoing into the missing (and presumed stolen) inventory from theShanghai-based warehouse. QEX continues to work closely with China Customs, authoritiesand a specialist legal team
● It has been determined that the inventory went missing prior to 30 September 2020, which isreflected in the HY2021 results
● Revenue for the period was $19.4 million compared to $27.8 million in the priorcorresponding period. The net loss after tax for the period was $5.9 million which includes a$4.3 million loss before tax relating to the missing inventory. Without the loss of theinventory, the net loss after tax would have been $1.5 million.
Commentary
Market conditions for the first six months of the 2021 financial year were challenging for QEX. Thiswas largely due to the continued impact of COVID-19 which includes the significant reduction indaigou sales due to border closures and changing Chinese consumer purchasing behaviour.Additionally, towards the end of the 2020 financial year (FY20), there was significant stockpiling ofinfant formula in China. While QEX benefited from this increase in sales in FY20, the 2021 financialyear (FY21) commenced with an oversaturation of product in the market. In line with reports fromour sector peers, this is likely to have contributed to the softening of sales early in HY2021.With concerns around COVID-19 being transferred via imported products, the lack of daigoubusiness, lockdown periods and transport challenges, many consumers are preferring to purchasemilk powder products from within China, either directly from bonded warehouses or throughlocal online retailers.
2While the Board’s current position is that the pressures created by COVID-19 are temporary anddiagou trade will eventually return, the entire sector still faces uncertainty about when this willbe. It is expected to continue to impact results until alternative channels are fully established orborders re-open.
As the Board has been communicating for some time, market conditions remain challenging,especially for milk powder, with lower margins continuing to cause pressure right across the sector. The logistics business was impacted in the six months, though not to the same extent asinfant formula. Market prices doubled due to increased airfreight costs, resulting in highermargins on smaller international parcel volumes.These external challenges are expected to continue into the second half, alongside the ongoingimpact created by the $4.3 million of inventory missing (and presumed stolen) from the Shanghaibased warehouse during HY2021.Despite the focus required to manage the Company through these extraordinary externalcircumstances, some progress was made towards the QEX growth strategy in HY2021.
Thisstrategy remains centred on diversification and included the launch of two new sales channelsduring the period.Recently, QEX launched a live streaming sales function, a Chinese e-commerce model that isgaining rapid popularity with Chinese consumers worldwide and in August, direct-fromwarehouse sales were launched in Shanghai.
At the end of HY2021, direct warehouse sales fromShanghai were generating between 5% - 8% of the Company’s milk powder sales.QEX’s Australian operations were fully established in late FY20, with the expectation that profitwould start to be realised in the first half of FY21. Due to the onset of COVID-19 shortly afterhowever, sales have been much lower than forecasted, with Australia delivering $3.5 million in revenue for the six months to 30 September 2020. In late September, the Australian internationalparcels business launched in an initial trial phase for a targeted group of customers.$1.7 million of capital was raised in HY2021 which has, for the most part, been used for workingcapital and supporting the Australian growth strategy.
Financial performance
Total revenue for the six months to 30 September 2020 was $19.4 million compared to $27.8million in the prior corresponding period. Net loss after tax was $5.9 million compared to a netprofit of $0.3 million in the prior corresponding period. This net loss includes the $4.3 millionbefore tax impact from the loss of inventory which it has been determined to have occurredduring the period.
Without the loss of the inventory, our net loss after tax would have been $1.5million.Milk powder sales were $15.8 million, compared to $24.0 million in the prior correspondingperiod. Revenue from international parcel delivery, logistics and customs clearance was $3.5million, compared to $3.7 million in the prior corresponding period.The gross margin % for HY2021 was 4.9%, compared to 10.8% for the same period last year.EBITDA for the six months was a loss of $5.7 million, down $6.6 million compared to a profit of$1.0 million in the previous period.
EBITDA for the current period includes the $4.3 millioninventory loss. Without this loss of inventory, EBITDA would have been a loss of $1.3 million.3The loss of inventory with a value of $4.3 million increased operating expenses by $4.3 million,reducing EBITDA and net profit before tax by the same amount. At this time the Group is onlyrecognising the benefit of tax losses to the extent they can currently be utilised. As a result, taxlosses of $4.0 million, with a tax effect of $1.1 million, have not been recognised in the result forthe period and will be recognised as the Group generates taxable profit in the future.The loss of inventory currently reduces equity and total assets by $4.3 million. This will reduce to a$3.2 million impact as the tax losses are used to offset taxable profit in the future.
At the end of HY2021, working capital was $6.1 million, compared to $10.5 million in the priorcorresponding period. Equity was $7.9 million, compared to $12.3 million in the priorcorresponding period.QEX continues to trade normally and is able to meet customer demand from current inventories.Update regarding missing inventoryIn late October 2020, QEX announced to the market that it was investigating the loss of a quantityof milk powder and infant formula from its leased Chinese Government Customs BondedWarehouse in Shanghai.QEX undertook a thorough assessment of the missing inventory, including a comprehensivereview of purchase and sales transactions throughout the current financial year and concludedthat the value of the missing inventory is $4.3 million. It was determined that the loss of theproduct occurred prior to 30 September 2020 and this is reflected in the HY2021 results.
As a result of the loss of inventory and the financial result for the 6 months to 30 September 2020,QEX’s subsidiary, New Y Trading Limited, which owns the inventory that has beenmisappropriated, and is party to the QEX group of companies’ principal bank funding facility, has,not meet two of its financial covenants comprised within the loan facility documentation. TheCompany’s bank has confirmed with QEX that there will be no change to the existing bankingfacility arrangement. They have also confirmed that the bank will provide a waiver for noncompliance with financial covenants for the quarter ended 30 September 2020.Investigations remain ongoing into the missing product, which is presumed stolen.
QEX is activelypursuing several avenues to determine the exact circumstances leading to, and personsresponsible for, the removal of these goods from the Shanghai premises. This includes workingclosely with China Customs and local authorities. A specialist legal team has been appointed toconduct further investigations. In response to the investigations conducted by QEX, China Customs has informed the Companythat a full audit of custom cleared goods, both into and out of the bonded warehouse will beconducted.The legal team acting for QEX in China continues to explore all available avenues of legal recourseagainst third parties in China in relation to this loss of inventory.
The Company’s previouslycommunicated insurance position remains unchanged at this point in the investigation process,with coverage for the loss incurred unlikely under any policy of insurance.QEX holds adequate inventory levels and this loss has not hindered the Company’s ability toservice all customer ordering requirements, including the recent Double 11 event.
4Outlook QEX continues to face uncertain and unstable sector dynamics arising from COVID-19. The Boardis closely monitoring the ongoing implications and demands of this new environment. These external pressures, alongside the impact of the missing inventory, present a challengingsecond half for QEX which will require significant focus and careful management. Strengthening customer confidence following the inventory loss, and associated adverse media coverage,remains a key priority.Over the coming six months, the Board will continue to assess all opportunities to improve thecurrent financial position of the company and to progress the diversification strategy. The Board thanks our investors and the QEX team for their continued support over an incrediblytough six months ENDS
Absolute shocker of a result!!!
Meanwhile just more or less a month after discovery of large empty space in warehouse in China Land,
QEX Board are still dribbling away, with little further progress on how large gap in Warehouse happen .. ;)
I wish them the best but I opted out some time ago. It smells like Wynyard all over. I hope not for existing shareholders.
If they can get things sorted and move forward who knows I may join their share register again
there is only one way to bring SP to north. sell off the company to an Australian Logistical company which wants to diversify the trade risk.
QEX - how to run a company in to the ground by ronnie xue
I don’t understand all the doom and gloom on this company. Through rapid growth this company has maintained profitability and met its growth strategy.
Yes this year is looking like it’ll be a poor year, but look 12-24months down the line when daigou are back. The company’s rapid response to other revenue streams will still be there PLUS the daigou revenue there from pre covid. Add to the fact that Australian operations and live streaming will be well up and running by then this company could reach $100m revenue by 21/22.
Are there risks with small cap stocks? Yes. Has there been mistakes made on the way? Yes, particularly the theft.
But this company and its management are still top notch in my books. Strong hold from me and let’s hope the $1.50 we saw two years ago comes back within the next two years for us patient folk!
I don’t agree with all the doom and gloom on this thread. Yes there have been some head winds recently, in particular the ‘theft’ and impacts on daigou from Covid.
However, the story on the rise of this company has been incredible. From home garage to warehouses in 3x countries and revenue of over $60m, whilst maintaining profitability the whole time over the 10years. Looking beyond the short term pain, I think the quick response to diversify over Covid including pushing the live-streaming has been commendable. Maintaining these new revenue streams when the daigou return has huge potential for even stronger revenue growth. Couple that with growth into other SE Asian countries and that they made $10m in November last year I can’t see why they couldn’t reach $100m revenue within the next few years.
High risk for sure given its recent head winds and small market cap. However, management have not behaved in a manner to put me off and in fact the recent declines has made it even more appealing!
Pablo, I agree.
The potential for QEX is enormous.
The risks are big, yet also well directed with their ability to reach customers in Asia and most notably, China. Customers who are needed by many Kiwi and Aussie businesses to bring money back to New Zealand.
Thoughts,
Pics peanut butter, New Zealand Honey, One Square Meals, Hogarths Craft Chocolate (and many other chocolate options), New Zealand Spirits (Lighthouse gin, Willowbank Whisky etc), perhaps large inflatable parks made for quality conscious fun parks by AflexTechnologies etc.
I like the QEX potential, and with wins will come a massive increase to the current share price.
Disc. Holder,
part of my riskier higher reward potential
Horses for courses though
better risk reward equations exist elsewhere though - particularly now in overseas stock markets
sections IMO
NZX market is getting overbought with no sight of demand finishing to the point it's getting difficult
to find good stock buys on fundamentals, for all the cheap mad money slopping around.
On the other side of the coin, one would have to be fairly unlucky to lose too much in
current times .. ;)
Share register too tight for QEX's best interests here IMO
They probably got to move copious quantities now on low margins to recoup what the lost
one way or another in past 6-12 months.
That is if there aren't any further stuff ups & losses in the QEX Camp in the future too ..
Don't intend going anywhere near this one any time soon now, but may be wrong!
Noticed that @nutz has selected QEX as one of their 2021 picks. Wonder if they see this thread what your reasoning behind it was....?
Looking forward to seeing QEX mid year announcement around how their Australian operations are going, selling direct from bonded warehouse, live streaming as well as an update on the ‘theft’.
Heading down to 25c level??
Normally really bullish with QEX. However no updates for quite a while and now it’s auditor resigns.....hoping the red flags don’t turn into a white flag :(
Remember as someone posted earlier -- "The potential for QEX is enormous"
That's if they don't lose or misplace or miscount the frigging Inventory, or
it dont grow legs first .. ;)
No further announcements just yet because auditors may be exploring uncharted powder
trails around facility from a distant distance .. ;)
Hopefully not a case of Auditor have Warehouse flunkies trot all the pallets for sample count
from very distant distance ...
Flunkies trot out all and more pallets with cartons they just emptied.. all duly counted ..
Auditor say not their problem if flunkies misunderstand and bring out pallets of both empty & full cartons
and not say .. ;)
So obviously not enough bubbles blown over spilt milk just yet - if you like .. ;)
China's SF Express has just announced it will takeover HK's Kerry Logistics. Not directly relevant to QEX, but suggests that it could be in the market for other acquisitions as it builds a more global network. Assuming no other material issues (beyond what's already been announced), QEX could be a low cost entry point to NZ for them.
Disclosure: None
Gives me some comfort that this is the reasoning behind the auditor change....
https://www.nbr.co.nz/story/qex-find...increased-fees
I still believe the management has a lot to prove to get me back in. If I was a newbie, I would not invest in this share, as for now it is pure gambling that they will come out of this ok. It is my own view and not financial advice, but it smells like Wynyard
https://simpleflying.com/air-new-zea...guangzhou/amp/
A positive article regarding international trade, which has a good undertone for businesses like QEX.
https://www.nzx.com/announcements/367556
Appointment of new Independent Director
"QEX Logistics Limited (NZX: QEX) has appointed Martin MacDonald to its Board of Directors as an Independent Director, effective immediately.
Mr MacDonald comes to QEX with significant governance, commercial and financial management experience, across both the public and private sectors."
https://www.nzx.com/announcements/367746
It has become a circus here
Hope they sort it out, feeling really bad for existing holders
A interest coverage of negative 6.5 times is pretty impressive
http://nzx-prod-s7fsd7f98s.s3-websit...745/340525.pdf
Oh dear...mayhem :eek2: If I were holder, I would get out at the earliest and take whatever money I can get, shades of WYN, CBL etc.....
Martin MacDonald was a director for 3 days before resigning......now that is impressive!!
QEX Appointment of New Independent Director (amended) - NZX, New Zealand’s Exchange
Wonder if the suspension will ever be lifted
Hmmm...now quotation suspended until further notice, nervous time for holders....
Financially, a very big lesson and bad situation for myself and many other share holders. Also negative for market confidence.
This share takes a bottom drawer position. Unable to sell, conract Link Market Services for advice.
Hopefully Ronnie has the year of the Ox in his mindset and works this out one way or another with exceptional work effort and dedication to the business he started.
I'm very glad I got out and preserved my capital, I had already lost a fair chunk on this especially being a top 10 holder. Since then I've recovered most of my losses in other opportunities, although never the opportunity cost. Unfortunate what has become although seeing the incompetence of management in handling presenting situations spoke volumes to me and was a major red flag. No faith was left in the BoD or Ronnie to execute. I feel the recent capital raise was done in poor taste with such a large limit, and was timed impeccably - citing funding required for further growth, when more than likely it was known to QEX that it would be in a financial dire - and to build up cash prior. I find it hard to believe that they wouldn't be aware of QEX financial position at the time of raising and to so boldly claim it was to fund growth and further opportunities was such a cop out given all the excuses in the AGM, all the other avenues and so forth. I think we were sold a pipe dream.
I still have cloud of doubts over that $4mln+ missing inventory, whether its really lost or made a backdoor entry into some key executive pockets?? I think NZX surveillance committee should ask some tough questions with Ronnie, we cannot let these kind of operators in our secondary markets, especially when so many retail investors are now pouring their hard earned savings.
Me too, Shanghai is quite a modern T1 city - bonded warehouses are very secure and there is a lot of surveillance in China. I find it very hard to believe that the Police have investigated or even been advised at all, let alone that there is no footage or trace of where the inventory went - it would be interesting if someone is able to follow up on that. 4m of inventory on baby formula is a very large volume of goods to go missing that even if you take a "small" chunk everyday, it would have to be a substantial volume, and for this to all go unnoticed by all staff members, systems, and those who stock take? It seems very odd to me, and again, very well timed with the capital raise. All speculation on my behalf although it all feels very, and dare I say it, very fishy to me.
Shipping is a very tightly controlled industry, and whilst it's not uncommon for goods and packages to go missing, 4m worth of inventory is a lot to go missing without a paper trace, surely at each stage of the process the inventory would be accounted for. It doesn't just go "missing". Especially given paying duties on goods once they leave the warehouses. There are a lot of checks and balances so to narrow down at which stage of the process there is a discrepancy? I'd believe that's something doable.
Then adding on no insurance provisions for misappropriated goods when all you're doing is handling goods? Maybe I expected too much out of an NZX listed entity or a corporation that was seemingly worth up to 50mm.
The thing that puzzles me the most is the new Director MacDonald stating on Monday. Surely This guy would have done his due diligence on the company before he agreed to be appointed to the board. He would have talked to the other directors and understood the state of the company. I took MacDonalds appointment as a positive sign.
Then 4 days later he resigns.
Auditor resigning a week ago wasn’t a good sign either
everyone is resigning.... it's so obvious this company is dodgy as.
Appointing a new director who seems reasonably well connected and able is not the act of a dodgy company. A dodgy company would keep its business to itself and not invite scrutiny from a new director. I am guessing something has come out of left field and caused a huge rift between directors and Ronnie. The interest covenant problem was expected after loosing 4M$ stock and MacDonald would have known about that.
MacDonald probably talked into job by English and then when English packed a sad he thought he better go as well.
Disappointing to also see Danny Chan go, as I thought his connections with the region added a valuable contribution to the board.
The best we can expect would be that the board and Ronnie kiss and make up. I cannot think of a case previously where the board has resigned in unison. Hopefully we will find out what the bone of contention is and that there is a solution.
For Danny Chan to take a step like this means something is seriously seriously wrong. It will require far more than a kiss and make up or apology and handshake.
Does obligation to keep the market informed continue, regardless of suspension on NZX ? ;)
The lost / misplaced / stolen stock must have inflected a fairly hefty blow on things -- let's hope it doesn't turn terminal ..
Why have the Board basically kept their mouths shut through the period after ? ;)
The Board departees and Auditors as well all hoofing it out the door certainly doesn't look good..
Always thought this would end sadly for holders after missing inventory ........
Looking very much like a mega-omni-cluster.......;):(:scared:
Looks like curtains down from here, feel sorry for holders. What a dodgy character...:eek2:
Took a while to come clean eh ....maybe going into media soon
Only $2,900 so no problem - that's money but what about reputation (his and NZ's)
http://nzx-prod-s7fsd7f98s.s3-websit...053/340953.pdf
First time that matter has come out in NZX announcements for QEX
Only roughly 3 months further down the track - so much for 'keeping the market informed & disclosure'
Now let's see what NZReg have to say about it, a wet bus ticket issued or remaining asleep in the chair .. ;)
Can see why new Director flew away almost as fast as he arrived after waking up another to things .. ;)
Feel sorry for punters holding this one - you may have been properly QEX-ED over .. !
Maybe a Shareholder class action is possibly the last resort needed to sort things out properly ? ;)
I remember when this floated, one of the no hoper outfits promoting it, said "its one to watch"
They weren't wrong were they?
Yeah, preferably from the sidelines.
Even the newly appointed auditors are abandoning the ship, ah Ronnie can you be accountable to shareholders at least?
Paul McBeth writes in business desk that in general there is a concern about related party transactions which is what Winner is pointing out.
The most recent issue McBeth notes is the following
“Or this - when in the six months ended Sept 30, two customers insisted they could only pay QEX using Alipay, something the NZX-listed firm was unable to do. Xue stepped up and received the $130,000 on the firm’s account, promising to on-pay the funds. At the end of the period, he hadn’t.”
Maybe the above issue was the tipping point for the board.
I see this as a very tricky situation. Ronnie is the majority shareholder by a country mile. We shareholders do not have any board representation. Share trading is suspended for how long we do not know. Ronnie is unlikely to be able to appoint a new board unless he ropes in his relatives and as a consequence there will be no independent directors.
Does anybody have any idea how this is going to turn out other than badly?
I think businessdesk is the only news organisation to do any analysis on QEX. All credit to them.
He could have just let it slip his mind $130,000 will be peanuts to him ,he could not be that stupid as to ripoff his own company in such a blatant manner.
I think he is a bit arrogant due to owning 80% of the company and has had a wakeup call hopefully.
Also how it will turn out is anyone's guess, mine is he will get through it , and most shareholders will sell up as soon as possible & there will be buyers as well .
What's your guesstimate Brain!!
Thanks Brain for snippets from Business Desk write up. I still have reservations about the missing $4mln inventory from bonded warehouse and believe it’s a dodgy deal.
I honestly cannot see how this can be resolved. He has to replace the board and no self respecting director is going to take this on. The best solution would be that the old board is reinstated and they get Ronnie and the company under control. Failing that he takes the company private again by buying out all the non related shareholders
I think I would take that (or anything) as a get out Brain , I cannot see Ronnie letting anyone override his decisions and authority not going off his record thus far .
Could be interesting & different .
The CFO has resigned. Maybe she didn’t like the way Ronnie was running things. The situation with this company seems to go from bad to worse.
I guess that this trading halt cannot continue forever. Is Statutory management an option?
This is a bit different though. SCY did have a board of directors before it went into receivership and receivership is a resolution. QEX doesn’t have a board so the shares can no longer be traded. Presumably the company is still trading.So my question is what is the next step because Ronnie is not going to be able to appoint a credible board.
QEX seems to me to be in a permanent state of limbo unless the regulator takes some action
Good points -- but how will Board effectively approve Auditors (ahem) remuneration, Ronnies enhanced package
for carrying the whole can short of a bit of stock and a few more warts added on etc ? ;)
Will Reporting matters become invisible totally .. not that it wasn't already quite scant before most of the Board etc decided
to go walkies ? ;)
The auditors resigned at the same time as the board and that was followed by the CFO. So we have a public listed company which is still trading presumably with one sole director being Ronnie ,no CFO and no auditors. Has this situation ever risen before?
Based on experience with other companies, the cost of getting new auditors on board a company in this position is likely to be significant.
Disclosure: not held
Yes I have been asking the same question and have been hoping that one of the many learned people on this forum could give an answer. Since it is very unlikely that Ronnie will be able to appoint a board ,CFO and new auditors I thought statutory management is about the only answer. We are waiting for the NZX and FMA to take action.
Think the NZX can just delist QEX
Don’t think Ronnie would mind if this happened
I take it they ain’t gone broke yet
Totally agree that the company is probably not going broke and delisting would suite Ronnie but it would make the NZX even more of a mockery than it already if problems with the governance of a public listed company results in delisting rather than close supervision.
I have always been for NZ having its own stock exchange but examples like this make me think that maybe the exchange should be run by people who know what they are doing. The Aussies perhaps and I can’t believe that I have just written that.
Hope Ronnie has some magic he has been saving up, to share with shareholders. Come on Ronnie.
Does he reside in New Zealand? Be applaudable if he made some sort of communication with shareholders.
The 16th April brought an update from QEX'ed:
https://www.nzx.com/announcements/370757
QEX – Update on the Ministry for Primary Industries Charges
It appears that MPI still intend on putting New Y & Ronnie over their high temperature bar-b-queQuote:
16/4/2021, 9:23 am GENERAL
Market Announcement
QEX Logistics Limited (NZX: QEX) – Update on the Ministry for Primary Industries Charges
QEX Logistics Limited (QEX) advises that the charges previously brought by the Ministry for Primary Industries (MPI) under the Animal Products Act 1999 against QEX’s subsidiary, New Y Trading Limited (New Y), and QEX’s CEO, Jinjie (Ronnie) Xue, will remain unchanged.
As disclosed to the market by QEX on 23 February 2021, the charges were previously under review by MPI and it was not clear at that point in time whether the charges would be dropped or if additional charges would be brought. MPI have now confirmed that the charges (as they stand) will remain.
The matter will go to trial but a date is yet to be set down. New Y and Mr Xue will be defending the charges.
This charges do not prevent New Y from continuing to trade.
Guess Ronnie won't have too much time to be bothered with anything else with that going on .. ;)
(not that reporting or updates were much better before the current shambles blew up around their ears .. ;) )