Feb 22 Performance

SHARES ADDED

• Thong Guan @ RM2.60
• MagniTech @ RM1.93 @ RM1.97 @ RM1.99
• ATRIUM @ RM1.47
• FAVCO @ RM2.50 @ RM2.55
• KAWAN @ RM1.67

PACKAGING

BPPLAS profit improved QoQ and YoY. Share price increase 13%. Thong Guan on the other hand dropped to -5%. The Q4 result from Thong Guan is yet to release.

 

FURNITURE

LiiHen annouced 3.5 cent dividen. Q4 profit improved by 165% compared to Q3. The worst is probably over but still have issue like labour, resin cost and high shipment cost.  Pohuat is flat but notably investment guru, COLD EYE has emerged as top 30 shareholders. It is good time to add Pohuat!

PLANTATION

Both INNOPRISE and HSPlant are star performers this month. Superb profit and revenue due to high CPO price. HSPlant announced 15.5 cent dividen and share price spike to RM2.89 with an appreciation of 50%. INNOPRISE announced 6 cent dividen and share price rocketed to RM 2.01 with an appreciation of 72%.

I dispose all HSPLAN share and two third of INNOPRISE shares. Capturing profit of 35% for HSPLANT and average of 52% for INNOPRISE.  

Lesson to be learned here is to capturing maximum profit. So timing is important. Usually share price will soar for few days or weeks if all sentiments are good.

  

OTHER

SamChem and CSC Steel perform well. Share price improved by 19% and 18% respectively. Both counters registered profit improvement on Q4. CSCSteel declared 14 cents dividen, higher than expected. Samchem declared 1.5 cent. Proft taking activity took place at RM1.00. However, SamChem is good for long term growth and may accumalate when price drop below RM0.90.

New kids on the block are FAVCO and KAWAN. FAVCO has announced 8 cents ( a bit disappointed). KAWAN Q4 result is yet to release.

FINANCE

No surprise from finance sector except better result in Takaful. RCE and ELK-DESA are flat.

Favelle Favco - Benefit from Oil & Gas Recovery?

Company : FAVELLE FAVCO – Benefit from Rising Oil Price?

Business:

Manufacture cranes and intelligent automation for Oil & Gas under Exact group. Revenue split is approximately 77% for cranes and 23% for automation. Their business is highly expose to Oil & Gas, shipyard and high rise building. The crane business has foothold in USA, Europe, Middle East and Asia.

 

 

 

Fundamental:

Company has huge cash pile of over RM300 million so no problem to pay dividen every year.

 

Low profit margin and almost no growth in terms of CAGR revenue and PAT. This is partly due to slump of Oil & Gas sector.

 

Revenue stagnant at around 550 million and profit margin is compressed.

 

Lates Q3 result:

PROSPECT

 

There are few positive things on FAVCO.

• Recovery of Oil price – especially Ukraine-Russia tension
• Shareholder share buy back recently

 

Revenue Split

 

58% of the revenue are generated outside from Malaysia. Automation is 100% from Malaysia.

Dividen:

No clear dividen policy but it is about 40% and once a year. Hopefully it can go back to 15 cent which will give 6% yield based on RM2.50

 

Technical Analysis on Chart:

Price does not fluctuate much and possible to go back pre-Covid level of RM2.80 – RM3.00 if Oil & Gas industry recover well.

At time of writing, I have some FAVCO shares.

Jan 22 Performance

SHARES ADDED

• Hevea (average down)
• MagniTech
• WellCall (Top up @ RM1.20)
• CSC Steel (@RM1.30)

PACKAGING

Packaging generally flat. Hopefully Q4 results will be good and expecting some dividen from both companies.

 

FURNITURE

LiiHen sprang a surprise by annoucing bonus issue of 2 for 1. Share price jumped 30 cents from RM2.70 when bonuse issue was announced.  Poh Huat remain flat. Hevea is still hovering around 46 cents. Price seems to be stable at this range and hence decided to average down by adding some more shares.

PLANTATION

Both INNOPRISE and HSPlant look good as dividen is coming soon. HSPlant may annouce higher dividen as profit is reaching record high.  

OTHER

SamChem is good for technical play. Price is trending up and will take profit when reach RM1.00.

CSC Steel is another technical play with 7 cent dividen coming. WellCall has pulled back after appreciated about 30%. Price down to RM1.20 and managed to top up some at this level. Since then price going up again to RM1.26. WellCall is constantly paying out dividen. ATRIUM has annouced Q4 results and 2.55 cent dividen. 

FINANCE

This sector is flat. RCE has been dropping after bonus issue. Takaful is no change but 12 cents dividen has been received in January 2022.

 

CSC Steel - Short Term Technical Play

 

Company : CSC Steel – Short Term Technical Play

Business:

Manufacturing of Cold Roll Coil (CRC). Very competitive landscape because of foreign dumping from Korea, Vietnam, India and China. Margin is low, less than 10%!! 2021 is improving because of higher steel price and China is curbing CO2 emission.

Manufacturing plant is located in Melaka. The major shareholder is CSC Steel Taiwan. It is a well-managed company with profit every year except 2014.

The usage of CRC as follows:

• Household appliances : Furniture, lockers, cabinet filling, hinges, computer cases etc
• Construction : Roofing, garages, steel sheds, gutter, window frame etc
• Industrial : Tube, scaffolding, steel mesh, drum, air conditioning ducting etc
• Automotive & Tooling : Tooling, hardware, machinery, parts etc

 

Fundamental:

Company has huge cash pile of RM300 million so no problem to pay dividen every year.

 

 

Very low profit margin and no growth in terms of CAGR revenue and PAT.

 

 

Revenue stagnant. Forecast revenue for 2021 will be around RM 1.25 billion if Q4 recovers well. The business is largely depending on domestic spending especially construction and industrial activities.

 

Cost of sales related:

• Raw material cost of Hot Roll Coil.
• Labour ?

 

Lates Q3 result:

YoY and QoQ dropped because of lockdown and factory are not in production. Hopefully Q4 will recover to RM300 million.

 

Prospect:

 

Major Shareholders:

Dividen:

Dividen policy is 50% of its profit. Assuming 7 cents dividen that will translate to 5% dividen yield in coming 4 months. There is room for price appreciation of 15-20%

 

 

Technical Analysis on Chart:

 This is for short term of 3 – 6 months holding. Buy at your own risk.

 At time of writing, I own some CSC Steel shares.

2021 Performance Review

Below is the performance for year 2021 since starting to post articles. Monthly performance review will be posted starting this year 2022 to track and monitor investment.

For year 2021, the sectors that performed well were packaging, finance and plantation. 

Packaging Sector

The star performer is definitely BPPLAS. Share price double after declaring bonus issue. Portion of the share was sold at RM2.93 (approx) and acquired again after bonus issue. Thong Guan on the other hand was moderate. Price hovering approx RM2.70 but still appreciated 12%. Better than Fixed Deposit and other unit trusts!! 

Plantation Sector

This sector was good due to high CPO price. Innoprise performed better than HSPLANT due to its dividen policy. However, coming quarter, HSPLANT will declare its dividen so price appreciation is expected.

Furniture Sector

Furniture sector was the worst due to MCO shut down, high shipping cost, labour shortage and material supply chain disruption. I believe this sector will pick up starting second quarter of 2022 and therefore good time to accumalate. HEVEA was a bad investment. Acquired at high price but managed to average down recently so hopefully it can recover soon. Poh Huat and LiiHen are cash rich so nothing to worry.

Finance Sector

RCE Cap was the best performer among its peer. Appreciated almost 100% and sold half. After bonus issue on coming 5th Jan, I will buy back again. ELK-Desa and Takaful were flat.

Others

For industrial manufacturing, Wellcall was a surprise. The share price picked up at the end of 2021. Coming quarters will be good as demand for its product remain strong.

Overall 2021 performance was not bad. The conclusion that can be drawn is better analysis better return and definately needs patience. Wish you all best in 2022! 

2021 Total Dividen

2021 is coming to the end. I have tabulated out the dividen received for the full year of 2021. A total of RM16,275.60 has been received.

The top two contributors are comimg from plantation and financial sectors. The highest dividen contributor is INNOPRISE.

Hope to increase in 2022.   

Taliwork - An Alternative to REIT Dividen

Company : Taliwork Corporation Berhad

Business : Utility sector covering water treatment, distribution, highway concessionaire (Grand Saga), waste management (Southern Waste) and engineering + construction. Most of the business are very stable except engineering and construction. The gem is in water treatment which is recession and COVID proof business.

  

Financial Information

There is no growth of CAGR-revenue. However, there is good CAGR of PAT. Profit margin is reasonable at 26%. Company has bank borrowings but manageable.

Borrowing	MYR (Million)	Cash or Cash Equivalent	MYR (Million)
Long term bank borrowing	328	Bank Deposit	48
Short Term bank borrowing	30	Investment (JV + Associate)	234
		Short Term Cash	264
Total	358		546

 

10 years revenue record

Revenue has been stagnant or declining as there no new business or project.

 

Revenue breakdown

Water treatment, supply and distribution is the biggest revenue contributor (71%). It is a very stable business. The demand of treated water will increase over time. Second biggest revenue contributor is highway concessionaire (approx. 23%). This sector has been hit by MCO lockdown but it will recover very soon.

 

Lates result at glance

 

YoY drop but QoQ increase. Profit margin improved significantly.

 

9 months revenue dropped because of expiration of Langkawi contract. See below.

 

Prospect

Growth opportunity

• RM602million Sg Rasau contract win will last them at least for 2 years.
• New solar assets
• Recovery of highway traffic.

 

 Risk

• Drought that leads to lower water treatment and distribution.
• Toll hike suspended

 

Dividen Chart

An attractive of 6 cents per annum is expected and pay every quarter. 75% payout ratio is really good.

 

Can the they sustain the dividen payout? Assuming they pay 1.65 sen every quarter then total dividen is 6.6 sen equiavalent to RM132 million. The cash flow of operation is sufficient to pay the dividen.

 

 

 Technical Analysis on Chart

The price is trading at the range of RM0.80 to RM0.90. It has been trending up due to recent award of Sg Rasau project. As you can see from the chart the price very stable and not much of fluctuation. Those seeking stable dividen with moderate long term capital gain can consider buying at low price.  

At time of writing, I don’t have any Taliwork shares. Follow my updates on other shares at FB 股海捞真。