image source from Big Chart Marketplace
image source from Big Chart Marketplace
Bursa Malaysia - 4243
Bloomberg - WTKH:MK
Yahoo - 4243 .kl
Webpage - http://www.wtkholdings.com/
Recommendation:
-
Date
|
Status
|
Price
|
Current Price
(RM)
|
Accumulate
Dividend (RM)
|
Gain / Loss
(%)
|
14/2/16
|
BUY
|
1.37
|
1.01
|
0.00
|
-26.27%
|
On 14th
February 2016, I had first written about KIMHIN and recommended a buy at RM
1.37. Now WTK is down by 26.27%, these does not mean that WTK is not a good
company to buy. For those interest to read the first review on 14th February
2016 you can find it here.
Annual
Report 2016
From 2016 WTK annual
report, WTK operates in five major segments as follows:
1) Timber – 79.16 % of revenue
2) Manufacture – 8.71% of revenue
3) Trading – 6.57% of revenue
4) Oil & Gas – 3.52% of revenue
5) Plantation – 1.52% of revenue
The adjusted earning
per share on 2015 after the adjustment for non-recurring income (gain on
disposal, foreign currency gain and etc) is 9.72 sen compared to 9.13 sen in
2014 (unadjusted). WTK cash and bank balances for 2015 has increase from RM
272,588,000 to RM 352,626,000. Besides that WTK had enough cash to cover all
the loan and borrowing with the amount of RM 310,682,000 as reported in annual
report 2015.
However WTK has RM
71,214,000 investment in an associate of which RM 53,465,000. The associate
company is Alanya Marine Ventures Sdn Bhd which chartering and managing oil and
gas exploration support vessels. Base on annual report 2015 the oil and gas
sector making revenue of RM 25,545,000 which contributed to 3.52% of the
company 2015 revenue. If the associated company can maintain its revenue WTK
can get back the premium they paid for the company in about 2 years.
PROS:
|
è The adjusted EPS for 2015 is
higher than the unadjusted EPS for 2014, 6.46% increase.
è Cash and bank balance for 2015 has
increase by 29.36%.
è WTK had enough cash to settle all
the loans and borrowing.
|
CONS:
|
è
WTK has RM 53,465,000 of Goodwill from
the purchase of 49% of the oil and gas associate.
|
Quarterly
Report for First Quarter 2016
WTK quarterly report
for period end 31 March 2016 show that its cash and bank balance increase to RM
423,949,000 from RM 352,626,000 as report in annual report 2015. However its
loan and borrowing had increase to RM 334,349,000 from RM 310,682,000. The
increase of cash is more than increase of loan and borrowing. The cash flow
from operation is RM 55,602,000 which is about 61.79% of the cash flow from
operation for the entire year 2015.
PROS:
|
è WTK cash increase by 20.23% in
just three months.
è The cash flow from operation for
the three months in 2016 is about 61.79% of the cash flow from operation for
the entire year 2015.
|
Family
Tussle
The news from the Edge Malaysia
regarding multiple lawsuits between the family member of the late founder of
WTK. According to the news report there are 34 ongoing cases. The lawsuits is about the share in the family private
investment arm W T K Realty Sdn Bhd which owned 13.80% of WTK (base on 2015
annual report).
CONS:
|
è
34 ongoing lawsuits between the board of
director.
|
Conclusion
After review the annual
report 2015, I still believe that WTK is a good company to invest in. Hence I
would maintained my recommendation as BUY to
WTK.
As a value investor, I definitely
had add some risk premium to WTK because of the multiple lawsuits. After adding
the risk premium, WTK still shows a good company to buy. Even with the lawsuits
which had go on for years, the WTK still able to grow hence I personally still
has trust on the management of WTK and believe the Plantation sector will
contribute ore profit in the near future when the oil palm trees are mature.
Summary of Stock Reviews
WTK (4243) - Stock Review – WTK(4243) - 2
http://ivkls.blogspot.my/2016/06/stock-review-wtk4243-2.html
