For
every quarter, STOCKIFY would shortlist stocks based on the latest
report card. In this post, we would list out 10 stocks to watch based on
4Q16 report card, and review 3 stocks covered previously (including
results announced from Dec 2016 to Feb 2017)
To watch:
1) COCOLND
COCOLND,
the manufacturer of the popular LOT100 gummy candy, has posted 60%
surge on their net profit to 16.9 mil in FY16 Q4 report. The main
contribution of this improvement is due to the increasing sales of
higher sales of gummy products, and gain on favourable foreign
currencies exchange. The company has continued to maintain its net cash
and debtless position in the latest financial report. The management has
also declared dividend payout of 10 sen, which gives dividend yield of
4% at current price.
2) CSCSTEL
The
Company's operating divisions include cold rolled and galvanised steel
products, investment holding and others. In this quarter,
CSCSTEL recorded a higher revenue but lower profit before tax than that
of its corresponding quarter. The significant deterioration in profit is
due to substantial increase in production cost due to higher raw
materials cost exacerbated by rapidly weakening Ringgit vs US Dollar
during the quarter under review and the absence of the write back of
doubtful debt amounted to RM16.9 million which happened in the
corresponding quarter. Despite the weaker quarter, CSCSTEL still
performed better in FY16 than in FY15. On top of that, The Group has
declared dividend payout of 14 sen in FY16, which is the highest since
FY09.
3) DUFU
The
Group, through its subsidiaries, is engaged in manufacturing of
industrial products, such as die components and precision machining of
vice, computer peripherals and parts, for hard disk drive, precision
steel moulds and parts and components for electronic equipment, and
optics, magnetism drivers and parts. In this quarter, DUFU profit before
tax has increased by three-fold compare to its corresponding quarter.
This is due to:
- Depreciation of Ringgit Malaysia against USD.
- Gain on dissolution of subsidiary amounting to RM3.71 million.
- Reversal of receivable and inventories amounting to RM1.16 million and RM1.22 million respectively.
- Continued improvement of production efficiency and effectiveness.
- Improve in interest income in the quarter under review.
4) ELSOFT
ELSOFT,
a company, which involves in design and production of automated testing
equipment (ATE), has shown an organic growth of 28% in revenue and 19%
growth in net profit for the full FY16. Besides that, we like the way
the company has been maintaining its net cash and debtless position over
the years till the latest quarter. Due to healthy cash flow, the
company rewards its shareholders with a total of 10 sen dividend in FY16
or 5.9% dividend yield at current price. However, due to the
unfamiliarity of the business, perhaps we could dive deeper into the
business to explore further in future.
5) FACBIND
FACBIND
made it to our list as a surprising guest. When we first flipped
through the Annual Reports of FACBIND, we are unimpressed by the
inconsistency in business performance and its lack of transparency.
However, on a second look, we notice there are some features in FACBIND
that would make it appealing to certain value investor, which belong to
certain school of thought that is losing its popularity nowadays. We
decided to cover FACBIND to test the feasibility of such valuation
method in BURSA.
6) HAIO
Hai-O
Enterprise Berhad is engaged in the wholesaling and retailing of herbal
medicines and healthcare products and investment holding. In this
quarter, The Group pre-tax profit was higher mainly attributable to
higher revenue achieved by the Multi-level marketing (“MLM”) division.
Although the current price is not attractive, The Group has a very good
fundamental based on the financial numbers. Also, The Group has been
improving steadily since the start of FY16.
7) MFCB
MFCB
once again made it to our shortlist. The Group’s revenue in 4Q 2016 was
RM283.3 million representing an increase of 78% from RM159.2 million in
4Q 2015. The higher revenue was mainly due to the recognition of
construction revenue of RM119.9 million for the Don Sahong Hydropower
Project. Physical completion of the Don Sahong Hydropower Project is on
schedule and has reached 16.5% as at the end of December 2016 (It was at
11.5% completion at the end of September).
8) TGUAN
TGUAN is
one of the popular companies that is widely covered by many analysts
and bloggers. However, the F&B manufacturing company has faced a
sell off from the market, due to below expectation performance in FY16
Q4, and also recent share disposal of the major shareholders.
Nevertheless, the company has been showing strong balance sheet and
growth prospect for this year. We would be interested to go into the
details of the business model as well as its growth prospects.
9) FAVCO
FAVCO,
a crane manufacturer and supplier, which has not been in the market
spotlight for some time, due to its involvement in challenging Oil and
Gas environment. Despite of being stuck in the low cycle of industry,
the company has not shown any weakness in its cash flow and continue to
keep its net cash position. In addition, the company has been treating
its shareholders generously with good dividend payout, and has also
proposed a 15 sen dividend in the latest FY16 Q4 financial report, which
gives 5.4% dividend yield at current price.
10) HOCK LIAN SENG
Thanks
to the recent Changi Airport project win, HOCK LIAN SENG (HLS)'s civil
engineering orderbook should now be at record high of SGD 963 mil,
representing earnings visibility for the next 3 to 5 years. In addition
to the exciting prospects, we found that net cash of HLS stood at SGD
950 mil, representing 60% of market cap at time of writing. Covering HLS
is not only the first time for us to analyze SGX stocks in this blog,
but also the first time we cover major contract based contractor and
developer, which usually which inconsistent cash flow due to the
business nature.
To review:
1) RGB
We first covered RGB on
18 December 2016. We think highly of the management, stating that could
be one of the most attracting part in investing in RGB. However, recent
Q4FY17 (Revenue drop -31% yoy and Net Profit drop 39% yoy) came in as a
negative surprise to the investors, mainly because the managing
director being publicly optimistic to RGB full year performance
beforehand. Does this change our view as to the integrity of the
management? Should existing shareholders of RGB continues to hold on the
shares?
2) IQGROUP
We first covered IQGROUP
on 8 January 2017. It announced impressive Q3FY17 result with net
profit went up +138% yoy. Not only so, this is also the most profitable
quarter for IQGROUP (Net Profit RM 8.35 mil) ever since listed. However,
the revenue of current quarter is not especially outstanding compared
to previous few quarters. Was it attributed to higher profit margin? or
one off income?
3) SOLUTN
SOLUTN,
an engineering equipment and services company, which was covered
previously, has continue to show growth in both revenue (+12%) and net
profit (+45%) in the recent released FY16 Q4 financial report. The
company concluded the FY16 with an overall revenue growth of 22% and 42%
surge in its net profit. Can the company continue to keep its strong
performance in FY17, is the market valuation of the company providing
sufficient margin of safety for long term investors to invest at current
market price? We shall find out further.
https://www.stockifyblog.com/single-post/Q4FY16
