AURA Clarifies Negative Cash Flow: Growth Indicator, Not Financial Issue

MGR Online•Economy•1d ago

Reader Briefing

AURA explains its negative operating cash flow as a sign of business expansion, particularly in its gold consignment and inventory, rather than a liquidity problem.

•AURA Design company is addressing investor concerns regarding its negative operating cash flow.
•The company states this is a natural occurrence reflecting growth in its pawned gold portfolio and inventory.
•Key performance indicators for this business model include non-performing loan (NPL) rates and collateral value, not just cash flow.
•Gold price fluctuations impact customer behavior regarding loan repayment and redemption.
•Analysts KTX view the negative cash flow as inherent to a growing business that needs to increase gold stock for expansion.

Overview

•AURA Design Company (AURA) is experiencing negative operating cash flow, prompting investor questions.
•The negative cash flow is attributed to the expansion of the pawned gold portfolio and increased inventory investment by AURA.
•AURA Design Company states that negative operating cash flow is not always a negative indicator.
•AURA Design Company emphasizes that for its business model, NPL rates, debt collection ability, and collateral value are more critical metrics than cash flow.
•When gold prices rise, customers are more inclined to redeem their gold, reducing the risk of bad debts for AURA.
•Conversely, falling gold prices can lead to customers not redeeming gold if its value falls below the loan amount, posing a risk.
•Increased gold prices have also slowed consumer purchasing power, leading to higher inventory levels and slower inventory turnover.
•Krungthai XSpring Securities (KTX) views the negative operating cash flow as natural for a growing business that needs to increase gold inventory for branch expansion, particularly with AURA's focus on consignment loans.

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Key Quotes

AURA

"'Negative cash flow' reflects 'expansion of pawned gold portfolio and inventory investment'."

“กระแสเงินสดติดลบ” สะท้อนถึง “การขยายตัวของพอร์ตขายฝาก และการลงทุนในสินค้าคงเหลือ”

AURA

"Operating cash flow (CFO) being negative is not always a negative sign."

กระแสเงินสดจากการดำเนินงาน (Cash Flow from Operations: CFO) ที่ติดลบ ไม่ใช่สัญญาณลบเสมอไป

AURA

"More important indicators than cash flow in this business type should consider NPL rates, debt collection ability, and changes in collateral value."

ตัวชี้วัดสำคัญกว่ากระแสเงินสดในธุรกิจประเภทนี้ ควรพิจารณาเรื่องอัตราหนี้เสีย (NPL) ความสามารถในการติดตามหนี้รวมถึงมูลค่าหลักประกันที่เปลี่ยนแปลงไป

AURA

"When gold prices rise, customers are motivated to redeem their gold."

ในช่วงที่ราคาทองคำปรับตัวขึ้น ลูกค้ามีแรงจูงใจไถ่ถอนทองคืน

KTX

"The issue of negative operating cash flow is natural for a growing business needing to increase gold inventory for branch expansion."

ประเด็นกระแสเงินสดจากการดำเนินงานติดลบเป็นเรื่องธรรมชาติของธุรกิจในช่วงเติบโตที่จะต้องเพิ่มสต็อกทองคำสำหรับการขยายสาขา

Key Entities

Organization

AURA Design Public Company Limited(ออโรร่า ดีไซน์ จำกัด (มหาชน))

A publicly traded company specializing in gold retail and consignment loans, currently addressing investor concerns about its operating cash flow.

AURA

The shorthand ticker symbol for AURA Design Public Company Limited, used in financial contexts.

Krungthai XSpring Securities Company Limited(บริษัทหลักทรัพย์ กรุงไทย เอ็กซ์สปริง จำกัด)

A securities company that has provided analysis on AURA's financial performance.

KTX

An abbreviation for Krungthai XSpring Securities Company Limited, used in financial analysis.