no doubt the mgmt stressed that its non cash adjustment but the real question is whether its a one-off temporary over production / poor demand or it is a structural change where its current product line ups are no longer in demand?

in accounting terms, impairments are charged into profit and loss. It has to be recognized sooner or later. Cannot escape. Meaning that the profits earned last time, might not even be a profit, it could be a loss. This is bad.

now i look back the balance sheet since 2023, i noticed that the inventories were bloated consistently althought the revenue remains consistently flat. If i put some context of the ev industry in last 2-3 years to the numbers then it is quite a big red flag...

of course, it is just my hindsight aka horse behind a cannon haha....

Gerbilg-I also strongly suspect corporate fraud, also related to financial data integrity. What the hell in business write off 250mil in one lump sum? What if External auditor suspect the financial integrity and raise concern on the business ethic? Same case like SD? ……????

Green LT agreed. I still remember a lot of YouTubers cover it as well as some gurus, share that they have a lot of business from B*W etc… after the share hit all time high, suddenly they all seems know how to sell all right around at the top. It was a 10 baggers back then..

The D/E ratio and Current ratio is become terrible after the RM250m impairment in current asset.

2025Q2 D/E Ratio = 0.81 Current Ratio = 1.73
2025Q3 D/E Ratio = 1.03 Current Ratio = 1.33

Is it possible that they inflated the inventory to make the balance sheet look better?

Jaredgwee，Yes, the Chinese government wants certain industries in its own hands, not because these industries are highly profitable, but because they are essential to the country's national strategy.

When they begin to make massive deployments in certain sectors, a large amount of capital floods into these industries. Then, in an effort to grab market share, they drastically drive down prices. The result is often that these industries become severely damaged, leading to a sharp drop in the overall profit margin for the entire sector.

as investor , we better run when we see them coming.

Restia, I had been search and read a lot article regarding China massive invest in semiconductors sector... Power of 红色革命, Malaysia semiconductors is half water mostly focus on semiconductors packaging and testing only, China is full set full throttle another 3-5 yrs 3-5nm massive production nvidia, Intel, tsmc, AMD all GG

Of course no cask losses because cash accounting is not permitted in public listed companies. If a bank made RM 100m profit, it doesn't mean they gain RM100m cash. All entries are based on accrual accounting. A loss is a loss in the. A profit is a a profit. One must know how to differentiate between a profit and loss statement and a cash flow statement.

The RM250m inventories impairment in one quarter is definitely staggering in relation to the quarterly revenue, profitability and total inventories. Explanations in B1 as stated in the QR insufficient as the exact reasons (eg. loss of major customers orders, quality issue, over production etc.) ought to be disclosed in view of such significant amount involved.

Exactly. In real terms, it is still a significant loss. If these inventories need not be impaired, they can be sold off and the profit (cash) derived can be cash dividends to shareholders. Just like impairment on receivables (bad debts).

just wondering any shareholder that has been following its quarterly performance over the last one to two years? any findings of inventories creeping up while revenue drop that could have led to the impairment this qtr? And another element to watch for is receivables. revenue dropped >> more than receivables - slower collection of receivables and could ended up with ECL/impairment in the future too.

Let’s not speculate but leave it to the external auditors to verify accordingly. Audit process (interim) for FYE might already be in progress and will definitely be Key Audit Matters (Inventories & Impairments) to be addressed by the external auditors accordingly.

@GreenLT 你说得对。相信是有意隱瞞
This kind of problem has long been a Bursa issue. It doesn't happen today. Normally manufacturing companies are taking advantage of this loophole in the law whereby they are not obligated to do impairment evaluation each year. I think Bursa Malaysia should come out with a better measure to protect the small shareholders.

I am not sure the following information is true and whether this could be the culprit. I do not have any D&O shares and just sharing what I just found out. Shareholders can seek clarification with investor relations to validate whether this is true as it is not reported in the local media too. https://pressat.co.uk/releases/nichia-successful-in-recalling-dominant-leds-from-distributor-as-result-of-patent-infringement-lawsuit-72b26d5718eee89257eeb53484df51ce/

I think if Bursa interfere and control the trading market, KLCI would not be a free market, foreign investor would not like it, bursa stock price would drop as well. I think we dont be inspector 1st, let the market do the job, eventhough there is a fraud, the time external auditor check it and acknowledge is already too late, right?

If it is patent infringement, inventory write-off is just the beginning. Raises lots of questions moving forward - (1) what is the breakdown of the receivables account for the disputed products? It will most likely be impaired. (2) any impact to the revenue revognised previously which may have to be reversed back? (3) what is the revenue contribution for the disputed products on the total revenue? That will be the future revenue loss unless D&O can replace it with other products?

As a bursa retailer, we dont need to guess what really happened because we will always be the last one to know the facts. So just stay away from those strong downtrend stocks. It will save u a lot of headache if u follow this rule in your investment decision.

Why is that so? Because money does not lie, people do. Hence the market always know more than u do. Someone out there always know something u dont.

Good advice, AA. Avoid all speculative counters or “red flags” counters. Also, need to scrutinise all the relevant QR figures in P&L (Sales & COGS) and Balance Sheet (Inventories, Receivables, Other Receivables, Borrowings etc.) for any”red flags” indicators prior to buying any shares :-)

Cheng-it means company R&D “Jia Sai”, copy Nichia product design. This reflect company don’t have expertise and leading tech in automotive intense competition. Sooner, company will loosing ground and serious deterioration in business performance. A pathetic ending for D&O.

more to clarity though damage has been done, green. if it is true that its patents infringement, the disputed products line-up will never make it to the market anymore in the future; in countries covered by Nichia's patents. D&O has to release its own products or pay royalties to Nichia to use their patented products/solutions.