Tekseng (7200), 0.845

Business engaged in the manufacture and trading of PVC related product and solar panel.

Key exporter beneficiary:

1. US demand rise for solar panels to last through at least 2017.
2. US anti-dumping duties on China and Taiwan producers provides a 20% pricing advantage. 
3. Cost effective after joint venture with Taiwan company will more production line.

2016 net earning to rise by over 5 fold from 2014's Rm7 million to Rm41million

1. Potential upside given october's annualized net profit reached RM50 million, above full year 2016 forecast.

2. New OEM contract with assured intermediate term profit to add Rm5 million to net profit.

3. Solar panel will boom early next year. The global market for solar panels is expected to soar to a record high in the first half of 2016 because of strong demand as well as favorable policies in the USA and China. IHS says that manufacturers will produce 16.82 gigawatts of solar panels in the first quarter next year followed by another 17.73 gigawatts in the second quarter. One gigawatt is nearly the equivalent energy produced by a large gas or nuclear plant.

Capital management

1. Dividend yield could reach 4.8% in 2016 based on min 30% payout ratio policy.

2. Solar panel manufacturing JV could enhance capital management.

Target price: short term TP Rm1.15; long term TP 1.30, implied 2016 Forecast EPS

Tecguan (7439) in a good profit trend

Market price: Rm1.54

NTA: Rm2.00

Gearing ratio ( Total asset/ total liabilities)=  1.93 times

Net cash per share: Rm0.71 ( cash rich and healthy financial status)

Teck guan perdana berhad, engaged in the manufacture and sales of cocoa products in Malaysia, product primarily include cocoa butter, cocoa powder. If also engaged in trade and export of plantation produce; finished wood products, trade cocoa bean.

Buying points:

•       80% sales mainly in foreign currency, cost of good sales 73% in MYR. ( without any risk for currency conversion risk and benefit from strengthen USD dollar)
•      Oil palm planted area are matured ( Average 13 years crop age, it’s a best harvest age).
•        Rm2.00 NTA compare market price now Rm1.54 market price. ( undervalue)
•        Healthy balance sheet with healthy cash flow.

Target price:

Based on PE ratio forecast next Q3 and Q4 net profit. If next two Q3 and Q4 net profit can maintain profit like Q1 and Q2 2015  average 2.5 million to 3 million, company forecast PE will be PE ratio around 6 times ( is very cheap damn cheap!)

TP1: Rm 2.00 (short term); long term TP: RM2.30

Petronm 3042

Petronm (3042),
市价:Rm3.10
这股我们上星期有和我们的前辈和一位精算师朋友有研究过，这公司是经营petron打油站的。主要的业务是提炼汽油和燃油，而不是採油的，所以国际油价上涨和下涨完全不会影响到它的，反而它可以得到更多好处，因为政府已经fixed了它们的盈利%。 市场上好多人误会以为国际油价的重挫会影响到它的盈利，所以比较少人买进，但我们已经开始留意到这股开始有大买家开始买进了。之前股价下跌是因为公司花了好多钱去把个地区的mobile and esso 油站改变为现在的petron油站以及增加输运管的距离，和加强好多的设施，以满足未来的需求。
我们可以看到公司的提升工程已经完成了，业绩在今年的第一和第二业绩报告得到了非常好的盈利，如果第三和第四的报告可以保持在前两个的盈利一样，这股好大的可能会回到之前的Rm4.00以上。

有兴趣者可以留意下和研究的。

Weida (7111), Market price: Rm1.790

(Healthy balance sheet with stable gearing and high PEG/growth ratio)

Weida, founded in 1983 is based in Kuching, Malaysia. Weida has remained the undisputed market leader in Malaysia, with dominant position in east Malaysia. Berries of entry into this industry is high especially in east Malaysia like Sarawak.

NTA: 3.06   PE: 9.85  capital: 226 million

Weida thrives and excels through its 4 core competencies:

1.       Manufacturing of polyethylene- based building materials.

2.       Environment engineering services.

3.       Construction of telecommunication infrastructure ( telcom tower); environment ( waste water management ; stone water management…)

4.       Property development.

Points:

1.       Raising revenue since 1998- 2014, 2001 revenue:  Rm51,368,247 increased 549% to 2015 Rm333,841,242.

2.       Profitable every years since 1998; 2001 net profit after tax Rm8,534,878 increased to Rm29,166,411.

3.       FY 2016, if earning could achieve 25mil to 30mil, estimated FY16 PE is around 7.5

4.       Net asset value: RM3.06 vs Market price Rm1.790 now. Trading with huge undervalue.

5.       Weida has many sales already and going to book closing, and its will contribute many figures into next two quarterly Profit.

6.       stable gearing, with net equity /net liabilities around 1.67 times.

 

MMSV (0113)

MMSV (0113), market price:Rm0.670

MMSV, investment holding company, which engaged in manufactures industrial automated systems and machinery, design die sets, jigs, and fixtures and develops computer software.

In 2013, after management switched their business focus from semiconductor business to LED product line, it has successfully hit the highest number in both revenue and net profit in his history. ( LED use in smart phone devices, lighting industry and the automotive industry).

Products distributes within domestic market (26%); USA(40%); Asia (33%) ; Aus (0.18%) and Europe ( 0.01%). {IT is net beneficiary from stronger USD against MYR. 70% of its revenue is dominated in USD}.

Operating activities cash flow surge 170%  from 2011 Rm52,000  to 2015 Rm9.1 million. Also, until end of June 2015 company still maintains stable/strong operating activities cash flow around Rm5.3million.

NTA: Rm0.2110
PE: 9.3
ROE: 34.08
Dividend yield: 3.00
Capital : Rm109million

Kenanga target price: Rm0.950
RHB TP: Rm0.775

Technical analysis: support 0.650 ; resistance Rm0.690; if break 0.70 above, with a target price of Rm0.775.

Tomypak 7285 Resilient business model ( The next Daiboci)

Tomypak (7285) (The next Daiboci) Resilient Business Model

Market Price: Rm1.650

RHB TP: RM2.17； Kenanga TP: RM1.88

Tomypak is one of The Leading Convertor for flexible food packaging materials, sale of packaging materials, polyethylene, poly flims and Sheets. It offers high barrier vaccum metallized laminates for milk powder, beverages, snack food ans so on...It has a similar business model with Daiboci. 

NTA per share: Rm 1.05

PE: 14.95

ROE: 10.51

Dividend yield: around 4%

Cap: 180 million

Shares out: 109,340,000units

Strong customers based: Nestle, hupseng, Appollo, Yeo's, anjinomoto, Horlicks......

RHB's Top price: Rm2.17 is based on FY16 PE of 13.5x, in-line with the company's 2 years average historical PE. This also implies 25% discount to its closed peer, Daiboci TP Rm3.80 v trade at a 2years avearge historical PE18.

Techincal view: has strong support at Rm1.60. After klci index few time drop, this share price still standing strong at Rm1.60. Cut loss around Rm1.55

Call buy reasons:

As we know new management team already took position and leading by new Managing director early 2015. New management team's first mission is eliminate and solve the higher operating cost issue since mid-2012 by improvement in efficiency and increase production capacity & greater cost saving. New production machineries with more automation processes and higher output eg. Installed and upgrade its camera inspection machines to detect quality of products (allows the company to cut down on wastage by over 30% on a monthly based.

Lower raw material price come after lower Crude oil is currently around USD55 per barrel. On average, raw material accountant for 70% to 75% of Tomypak's production cost. This directly increasing net profit margin for the company and this reflected by latest first quaterly report 2015 v recorded Rm5.3million ( the best net quarter profit since mid 2015).

Capacity expansion: OCT 2014, company acquired 10.5 acres land in senai, Johor. Allow capacity expansion in 2015 and 2016. Besides, new management team set a target or vision to surpass Daiboci (8125) in next three years.