image source from Big Chart Marketplace
image source from Big Chart Marketplace
Bursa Malaysia - 5371
Bloomberg - KHI:MK
Yahoo - 5371 .kl
Webpage - http://www.kimhin.com.my/
Recommendation:
-
|
Date
|
Status
|
Price
|
Current Price
(RM)
|
Accumulate
Dividend (RM)
|
Gain / Loss
(%)
|
|
14/11/15
|
BUY
|
1.89
|
1.78
|
0.03
|
-4.23%
|
On 14th
November 2015, I had first written about KIMHIN and recommended a buy at RM
1.89. Now KIMHIN including dividend receive on ex-dividend date 26th
April 2016 is down by 4.23%. I currently has some position on KIMHIN and my
entering price is higher than RM1.89 as for some of you that follow this blog
closely KIMHIN start to gain momentum on the next day after the first post and
reached it all time high at RM 2.51. Would I still holding these stock which is
currently paper lost or to cut my losses? I will tell you guys at the end of
this post after reviewing KIMHIN 2015 annual report and the most recent
quarterly report. For those interest to
read the first review on 14th November 2015 you can find it here.
Annual
Report 2015
From 2015 KIMHIN annual
report, KIMHIN operates in four countries as follows:
1) Malaysia – 68.48 % of revenue
2) China – 17.61% of revenue
3) Australia – 15.95% of revenue
4) Vietnam – 0.2% of revenue
KIMHIN earning per
shares for 2015 is 24.50 sen compared to 17.03 sen reported in 2014. Besides
that, KIMHIN had RM 12,058,000 classified as foreign transaction gain in the
others comphensive income due to depreciation of Ringgit Malaysia against
Australia Dollar and China Renminbi in 2015. In 2015, KIMHIN cash and cash
equivalent had increase from RM 43,654,000 to RM 56,749,000 and the total debt had
reduce from RM 10,173,000 to RM 9,208,000.
|
PROS:
|
|
è KIMHIN cash and cash equivalent
had increase by 30%.
è KIMHIN total debt had reduce by
9.49%
|
|
CONS:
|
|
è
KIMHIN had RM 12,058,000 gain due to the
depreciation of Ringgit Malaysia in 2015. Which is not sustainable because
early 2016 Ringgit Malaysia had strengthen.
|
Quarterly
Report for First Quarter 2016
As these report out on
26th May 2016, KIMHIN stock price fall 10% on the next day. The main
reason is these quarter KIMHIN had make a lost of 0.48 sen per share. These had
scared some investor panic and start selling the shares at low price.
KINHIM had expenses of
RM 8,339,000 stated as other expenses which is higher than KINHIM other
expenses for the entire year of which are RM 7,280,000. Although the quarterly
report did not state clearly what are the other expenses, in accounting other
expenses included the operational and non - operational cost such as
depreciation, discontinued operations expense , maintenance cost of fixed asset and ect.
On 17 December 2015,
KIMHIN entered an SPA agreement to buy the ceramic tar manufacturing factories
from Johan Ceramic. The factories had stopped operation hence I believe some of
the cost required to expense during 1st Quarter of 2016 to start
back the operation of the factories which KIMHIN had reported as other
expenses. If I am correct the other expenses will be one time payment and
it does not affect KIMHIN future earning.
Besides that, the appreciation
of Ringgit Malaysia on the first quarter of 2016 had decrease the earning of
KIMHIN oversea operation when the convert the fuctional currency to presentational
currency using temporal method. KIMHIN recorded comprehensive lost of RM
7,193,000 for these quarter due to currency exchange.
|
CONS:
|
|
è
KIMHIN had report earning of -0.48 sen
per share mainly due to other expense which it did not stated clearly.
è
The strengthening of Ringgit Malaysia in
first quarter 2016 had decrease KIMHIN profit from its oversea subsidiary.
|
|
|
Conclusion
KIMHIN 2015 annual
report shows that KIMHIN is still a good company to be invested in. Although
KIMHIN had make a lost for the first quarter of 2016 which the main reason is
the increase of other expenses, I believe the other expense is one time expense
and it will not effect KIMHIN future earning. After detail analysed KIMHIN. I
could see KIMHIN is a potential company which can grow with little debt. Hence
I would maintained my recommendation as BUY
to KIMHIN.
Summary of Stock Reviews
KIMHIN (5371) - Stock Review – KIMHIN(5371)-2 (KIM HIN INDUSTRY BERHAD)
http://ivkls.blogspot.my/2016/06/stock-review-kimhin5371-2-kim-hin.html
