The Share Price Of ODA Tumbled By 2.632% After The China Mobile Litigation Update

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Orcoda Limited (ASX: ODA), a company from software and services industries which is into the business of transport logistic system announced that the district court of Gulou in Nanjing, Jiangsu Province, PR China issued a notification of the decision to the rule in favor of the China Mobile. There was an ongoing commercial dispute between Orcoda Limited and China Mobile Jiangsu which is a related company of China Mobile Limited over an unpaid debt of A$4.1 million. The court has advised the company can lodge an appeal by 17 January 2019.

However, Orcoda Limited was not satisfied with the court’s judgment as it claims that China Mobile was unsuccessful in providing the evidence during the court’s proceedings. As a result, it has taken further assistance from the Australian Embassy in China and requested a settlement meeting with China Mobile. Based on the settlement meeting outcome between the company and the China Mobile Jiangsu, the company will then be appealing to the court.  

Brendan Mason, who is the managing director of Orcoda Limited keeping in mind the shareholder’s interest, feels that they should take the appeal process which will escalate the case into the intermediate court.

The official listing date of ODA on ASX is 15 September 1986 where the performance of the company is consistently negative. The last one-year performance of ODA was -49.33%. Its YTD performance is -2.56%.

For the financial year 2018 which got ended on 30 June 2018, ODA made a net loss of $5,833,183 due to increased consultancy cost, rental & occupancy cost, ASIC, audit, and tax. The balance sheet of Orcoda Limited states the company has a substantial net asset base of $11,637,735 which means that the company is in a position to meet its long-term obligations. Its debt-equity ratio is 0.182 which means the company tried to use its resources during the period. ODA has a total current asset of $2,634,226 and a total current liabilities of $2,125,028 which indicates that the company might face challenges in meeting its working capital requirement and its short-term debts. FY2018 of ODA reports an increase in the accumulated losses which shows a weak operating performance of the company. The total shareholder’s equity is worth $11,637,735.

During the accounting period, there was an increase in the net cash held by the company. By the end of the period, the net cash and cash equivalent with ODA was $2,105,116.

The update regarding the court’s decision against Orcoda Limited had an adverse impact on its share price.  With the market open, the share price of ODA tumbled down by 2.632%. The shares traded flat on ASX and its closing price were A$0.185 which is 0.005 points below its previous trading day’s closing price. The closing price is towards the 52 weeks low price with the stock holding a market capitalization of A$17 million.


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