This is an update on one of my portfolio positions, 800 Super Holdings, which I have held since late 2015. I was perusing their latest set of results and checking profitability. On the surface everything looked fine, revenue was slightly down but profit margins expanded to give a full year profit of S$17m compared to S$16.7m last year. Compared to the current market cap of $219m, this seems to put them on quite a fair valuation given the growth and I was happy to continue holding.
However, a closer look at the cash flow statement showed something worrying.