JAKS - THE NEW MIRACLE STOCK

Jaks seems to be the flavour of the month as its meteoric rise from the 70s to 1.00 was fast and aggressive, but perhaps too aggressive?

This company is not without its problems. Its has a litigation case where it has lost 50 million ringgit to the Star but now appealing. Surprisingly it has not been provided for in its books. That's just a time bomb waiting to happen. They are also stuck with a dead mall in Ara Damansara which will be constantly eating into their profits. The property division is also losing money to the tune of 34 million!

So where is the earnings coming from? It is due from the JV to build the power plant, a recognition work in progress from construction. An accounting procedure.

Take note that there is a cashflow deficit of 57 million in his latest books. I believe there could be a possible cash crunch in the near future.

Better times to come? Remained to be seen......

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