The company's liquidity is highly constrained, with cash reserves of only $658,154 relative to $18.9M in revenue, indicating significant potential strain from extended payment cycles.
| Metric | Jun'24 | Jun'23 | Jun'22 |
|---|
| Cash from Operations | -2.74M | -1.53M | -632.73K |
| Operating CF Margin % | -14.46% | -7.23% | -7.78% |
| Operating CF Growth % | -78.82% | -141.76% | - |
| Net Income | 2.42M | 3.55M | 1.68M |
| Depreciation & Amortization | 363.88K | 365.05K | 212.35K |
| Stock-Based Compensation | 0 | 0 | 0 |
| Deferred Taxes | -342.88K | -145.99K | 41.78K |
| Other Non-Cash Items | 0 | 0 | -742.33K |
| Working Capital Changes | -5.18M | -5.3M | -1.83M |
| Change in Receivables | 529.65K | -3.47M | -861.03K |
| Change in Inventory | -2.13M | -3.36M | -1.51M |
| Change in Payables | -2.57M | 481.28K | 364.48K |
| Cash from Investing | -273.21K | -2.96M | -77.45K |
| Capital Expenditures | -17.43K | -2.52M | -77.45K |
| CapEx % of Revenue | 0.09% | 11.93% | 0.95% |
| Acquisitions | 0 | 0 | 0 |
| Investments | - | - | - |
| Other Investing | -255.79K | -433.16K | 0 |
| Cash from Financing | 3.07M | 4.96M | 749.74K |
| Debt Issued (Net) | 3.02M | 1.3M | 227.72K |
| Equity Issued (Net) | 50K | 1000K | 522.02K |
| Dividends Paid | 0 | 0 | 0 |
| Share Repurchases | 0 | 0 | 0 |
| Other Financing | 0 | 0 | 0 |
| Net Change in Cash | 64.95K | 561.29K | 30.63K |
| Free Cash Flow | -2.75M | -4.13M | -710.19K |
| FCF Margin % | -14.55% | -19.51% | -8.74% |
| FCF Growth % | 33.27% | -480.89% | - |
| FCF per Share | -0.24 | -0.37 | -0.06 |
| FCF Conversion (FCF/Net Income) | -1.12x | -0.44x | -0.39x |
| Interest Paid | 120.6K | 52.74K | 3.15K |
| Taxes Paid | 3.06K | 3.77K | 2.33K |
Liquidity and concentration risk
Given the absence of reported cash flow statements, the relationship between STAK's 12.91% net margin and actual cash generation remains opaque, preventing a definitive assessment of whether reported earnings are supported by tangible cash inflows or are instead inflated by non-cash accruals and accounting adjustments.
Investors should exercise caution as the lack of cash flow data obscures the true quality of earnings, particularly given the company's reliance on project-based revenue from state-owned enterprises. Without visibility into the conversion of net income to operating cash, it is impossible to determine if the company is effectively collecting on its receivables or if earnings are being driven by aggressive revenue recognition policies.
Based on the company's operational profile, the extremely low cash balance of $658,154 relative to $18.9M in revenue suggests that STAK may be facing significant working capital strain, likely exacerbated by extended payment cycles common among its state-owned oilfield service customers in the Chinese market.
The company's reliance on heavy-duty chassis procurement implies a high requirement for working capital to manage inventory and production cycles. Any delay in collections from SOE clients would likely lead to immediate liquidity pressure, potentially forcing the firm to seek external financing or rely on parent company support to maintain operations.
As an industrial manufacturer of specialized maintenance equipment, STAK's capital expenditure requirements are likely tied to maintaining its assembly capabilities, though the current lack of disclosed cash flow data makes it difficult to quantify the split between maintenance and growth-oriented capital investments.
The company's focus on brownfield maintenance equipment suggests that its asset base requires consistent reinvestment to remain competitive in the specialized Chinese oilfield niche. Investors should monitor whether the firm is prioritizing essential maintenance capex over R&D, which could signal a defensive posture in response to the recent 10.53% revenue contraction.
The absence of a formal cash flow statement in recent filings obscures potential cash outflows related to capitalized costs or intercompany transactions with Lanying Capital, which may be masking the true underlying cash burn rate of the business during this period of top-line revenue decline.
The reliance on a parent company structure warrants investigation into whether shared overheads or intercompany financing arrangements are being used to stabilize the balance sheet. Without transparent cash flow reporting, the market may be underestimating the risk that the company's operational cash flow is insufficient to cover its ongoing manufacturing and administrative expenses.
Quick answers to the most common questions about buying STAK stock.
STAK Inc. Ordinary Shares (STAK) generated $-2.7M in net cash from operating activities in 2023. This reflects the cash generated directly from core business operations.
STAK Inc. Ordinary Shares (STAK) reported negative free cash flow of $2.8M in 2023, indicating capital requirements exceeded cash from operations.
STAK Inc. Ordinary Shares (STAK) spent $0.0M on capital expenditures in 2023. CapEx represents the cash invested in physical assets like property, plant, and equipment to maintain or grow the business.