Questions that need answering....

After reviewing the Annual reports for Lee and Man Handbags Holding Limited, it became apparent that after a peak in 2012, the profit margin decreased in subsequent years.

On the 19^th June 2015, Lee and Man made a profit warning announcement to advise shareholders of a potential decrease in profits for year ending 30 June 2015. The decrease in profits was linked to the rising costs of labour in China and price competition from manufacturers in the Philippines and Vietnam.

On the 22^nd June Lee and Man Handbags Holding Ltd released a trading halt notification to announce to shareholders that shares of the company will halt from 9:00am on the 22^nd June on The Stock Exchange of Hong Kong, with no further notice from Lee and Man Handbags since.

This led me to my first KCQ and point of confusion:

KCQ 1: I cannot see a pattern.

I expected that if the profit was high or low then another aspect of the reports would be high or low at a similar ratio. For example, in 2013 and 2014 the revenue was almost spot on equal, and the expenses were fairly close in amount.  I would think that business running costs would be fairly similar during a year – they might employ some more staff or their rent may go up - but their end of year overall profit was decreased in 2014 by over half from that of 2013. Which I thought to be a very large contrast.

 Is it possibly down to different directions?  In 2011, 2012, and 2013, one of the directors was a Ms Poon Lai Ming.  Noted as having 36 years experience in the handbag industry. In the 2014 Annual report of the company,  Ms Poon was not mentioned as a director.  Has the company gone in a different direction, or has needed further direction in relation to the expertise of a long time handbag connoisseur?

Nonetheless, some serious sleuthing has revealed that this is not the end for Lee and Man Handbags. On www.jobsDB.com, Lee and Man Handbags advertised for an Assistant Merchandiser (Handbag), a Merchandiser (Handbag) and a Senior Finance Manager, dated as current as the 7^th July 2015.  Bloomberg’s Business Online indicated that Lee and Man handbag stock were at a 52 week high on the 29^th June 2015. See Article

Unfortunately, L+M Handbags annual reports are released year ending 31st December, so we will not know more until an interim report can be published. Not fair.