Solid double-digit growth in revenues, profits and dividends since FY14
Superlon Holdings Bhd, a producer of thermal insulation materials for air conditioners, enjoyed a 46.41% jump in its net profit for the third quarter ended Jan 31, 2016 (3QFY16) to RM4.3 million, from RM2.94 million a year ago. The significant improvement was mainly due to increased efficiency leveraging on better machinery and higher volumes.
For the first nine months of its financial year ending April 30, 2016 (9MFY16), Superlon's net profit doubled to RM12.96 million or 16.32 sen a share versus RM53.64 million or 7.73 sen a share a year ago. Revenue meanwhile grew by 24.55% to RM66.81 million, from RM53.64 million a year ago.
Canone's net profit slumped 47%
For the fourth quarter financial year ending 31 December 2015, Canone net profit slumped 47% to RM13.94 million versus RM26.48 million a year ago. Revenue fell 5% to RM236.26 million, from RM249.96 million in Q4 FY15.
Source: The edge weekly 18-24 April 2016
Information is for educational and informational purposes only and is not be interpreted as financial advice. This does not represent a recommendation to buy, sell, or hold any security. Please consult your financial advisor.
SUPERLN (7235) - Koon Yew Yin, this gem is better than debt-laden Can One
http://klse.i3investor.com/blogs/Smallcapgem/95325.jsp
Superlon Holdings Bhd, a producer of thermal insulation materials for air conditioners, enjoyed a 46.41% jump in its net profit for the third quarter ended Jan 31, 2016 (3QFY16) to RM4.3 million, from RM2.94 million a year ago. The significant improvement was mainly due to increased efficiency leveraging on better machinery and higher volumes.
For the first nine months of its financial year ending April 30, 2016 (9MFY16), Superlon's net profit doubled to RM12.96 million or 16.32 sen a share versus RM53.64 million or 7.73 sen a share a year ago. Revenue meanwhile grew by 24.55% to RM66.81 million, from RM53.64 million a year ago.
Canone's net profit slumped 47%
For the fourth quarter financial year ending 31 December 2015, Canone net profit slumped 47% to RM13.94 million versus RM26.48 million a year ago. Revenue fell 5% to RM236.26 million, from RM249.96 million in Q4 FY15.
Balance sheet analysis
In
terms of dividends, SUPERLON paid 9 Sen per share in 9M FY16 compared
to 4 Sen per share for Canone in full FY15. The dividend yield for
SUPERLON is very high at 4.57% compared to 0.92% for Canone.
SUPERLON
has a super-strong balance sheet with current ratio of 5 times and net
cash position of RM27.3 million. On the other hand, Canone is highly
geared with net debt of Rm483.48 million and current ratio of 1.34 times.
Source: http://www.thestar.com.my/metro/community/2016/03/29/the-heat-makes-aircons-hot-items-suppliers-scramble-to-meet-increasing-demand/
Demand for airconds to increase 120%
According
to Panasonic, demand for airconds are expected to increase 120% in
second quarter of the year. This is great news for SUPERLON. It has the
largest market share, 55% to 60% of the domestic rubber thermal
insulation industry.
To
cope with huge demand, SUPERLON is expanding production capacity and
building a new 70,000 square feet warehouse next to its existing
factory.
Source: The edge weekly 18-24 April 2016
Concluding Remarks
Low-profile
SUPERLON is under the radar of all big research houses, causing the
stock to be underpriced at low PER of only 9 times. It will profit from
120% increase in demand for airconds in second half of the year.
A final dividend of 3 Sen per share in 4Q FY16 will bring total dividend to 12 Sen per share or dividend yield to 6.1%.
If
you annualise the past 3 quarter EPS, you will arrive at EPS of 21.76
sen for FY2016. At current price of RM1.97, prospective PER is only 9
times. This valuation is low compared to other rubber-product stocks
where PER is 15 to 25 times.
If you input a lower PER of 13 times for its small market capitalisation, fair value for SUPERLON is RM2.82, a huge 43% upside!
Information is for educational and informational purposes only and is not be interpreted as financial advice. This does not represent a recommendation to buy, sell, or hold any security. Please consult your financial advisor.
SUPERLN (7235) - Koon Yew Yin, this gem is better than debt-laden Can One
http://klse.i3investor.com/blogs/Smallcapgem/95325.jsp
