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| OCNCASH (0049) - OCNCASH- are you too late? |
OCNCASH (0049) - OCNCASH- are you too late?
OCNCASH stock.
Oceancash Pacific Bhd.
Share price: RM0.68
PE ratio TTM 15 times.
Listed in 2004, Oceancash Pacific Berhad is primarily involved in the manufacture of felts and non-woven fabrics. The company, which commands about 60% of the Malaysian felt market, mainly produces thermoplastic and resinated felts that are used in the automotive and air-conditioning industries. In the non-woven segment, OCNCASH’s fabrics are supplied to disposable hygiene product manufacturers. An estimated 80% of its non-woven fabrics are exported to more than 10 countries across the globe.
Source: CIMB
Why OCNCASH?
Potential transfer to Main Market, or the uncle aunty like called it Main Board. They already made more than RM20 million in the last 3 or 5 years and the latest financial year more than RM6 million.
Initiated research by CIMB with Buy recommendation on 3rd April, with target price of RM0.88. CIMB said...... Felt demand shifting into high gear through automotive industry. OCNCASH’s felt division contributes up to 37% and 58% of OCNCASH’s revenue and EBITDA, respectively. Moving forward, we project significant volume growth on higher demand, especially from the automotive segment. OCNCASH recently secured more orders from new and existing customers in both Indonesia and Malaysia. This is expected to raise total monthly outputs significantly, albeit on a progressive basis. Higher auto production in Malaysia once Proton secures a foreign partner by mid-2017 is another catalyst.
On another report on 11th April, see what CIMB said in its report......
From Indonesia with love.
We recently hosted a meeting between Oceancash Pacific’s management and 12 analysts and fund managers.
There were no major surprises from the meeting, with management having a positive view (which we share) premised on its strong earnings growth.
The group expects strong volume growth in the felt division, mainly driven by rising demand from Indonesia, especially from the automotive industry.
Management also expects higher demand from the air conditioning industry.
Maintain Add with an unchanged TP of RM0.88. Total upside stands at 27.7%.
New orders to drive the non-woven segment. For the non-woven (hygiene) segment, the group expects rising customer enquiries to translate to significantly stronger production. Note that our -woven segment. For the non-woven (hygiene) segment, the group expects rising customer enquiries to translate to stronger orders in the near term. Management said that it is still in the midst of finalising orders from a new customer, which can lead to significantly stronger demand for its hygiene products. In the event that demand is stronger than expected, OPB did not discount the possibility of adding a new line to increase production. Note that our earnings estimates have yet to take into account any significant new orders.
CONCERNS:
Are you too late in OCNCASH?
According to CIMB....... Since our initiation on OCNCASH, the stock has appreciated by 25%. However, we still advocate that investors accumulate the stock, given its strong growth prospects. We are projecting the group recording a 3-year CAGR of 18.6% (FY17-19F), premised on: i) higher sales of felts in Indonesia, ii) better economies of scale from felt volume growth, and iii) higher global demand for non-woven products, especially in China and South East Asia. We maintain our Add call, with an unchanged SOP-based TP of RM0.88.
You see, when CIMB recommended, the price was only RM0.56. However, CIMB said although up 25% already you are not too late. However, when I spotted OCNCASH, it was on 23 February the price was only RM0.45, now up more than 50%. Are you too late?
If you wonder why I did not share when it was RM0.45. I check the stock, it was good but the info was everywhere. News, picture, result, blog, etc. It will take me many hours to share. At that time, my conclusion was on the stock was “good” but I cannot just share one word good, I must tell why. Furthermore, I see no research coverage, I thought can wait a while. There are also some articles or stocks queing up for me post. Before I got time to share, it already went up substantially so I put on hold first until recently I saw CIMB report which makes things easier to share. I can just summarise the reports but it also took me few hours. Trying to explain (or justify) a bit in case of you think that I'm Ma Hou Pao (Cannon Behind the Horse) LOL.
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OCNCASH (0049) - OCNCASH- are you too late?
http://politemarket.blogspot.my/2017/04/ocncash-stock.html
