Superlon - The Insulation Company

 

Company : Superlon Holding Berhad

Business : Manufacture and sales of insulation tubes, nitrile butadiene rubber for HVAC&R industry. Company also doing trading HVAC&R parts (copper pipes). Products are mainly for export market with factory in Malaysia and Vietnam. See note below. It is a Taiwanese managed company.

 

 

Manufacturing locations

 

Company is in net cash position. However, no growth in CAGR on profit after tax. Small cap company with maximum revenue of RM100 million.

 

10 years revenue

Revenue stagnant at RM100 million and profit margin is declining after FY 2017. It seems that cost is rising up and eroding their margins.

 

Geographical breakdown of revenue as follow:

 

Breakdown of Malaysia revenue.

 

Lates Q1 result:

Q1 result dropped when compared YoY and QoQ. The worst is not over yet as Q2 is from August to October where Vietnam plant has shutdown.

 

 

Prospect:

• Market penetration to Oceania and Africa but not sure the contribution.

 

Risk:

• Vietnam plant shutdown
• Soft global demand
• Raw material butadiene cost – synthetic rubber rising?

 

Dividen:

Dividen is stable as company still have RM20 million cash but will drop. Pay-out ratio is 30%. See dividen chart below.

 

 

 Technical Analysis on Chart

Forming triangle but will take long time before breakout.

 

At time of writing, I don’t have Superlon share. However, it is interesting to know that Cold-Eye is major shareholder of this company.