CCK(7035) - CCK CONSOLIDATED HOLDINGS BHD Stock Review
image source from Big Chart Marketplace
image source from Big Chart Marketplace
Bursa Malaysia - 7035
Bloomberg - CCK:MK
Yahoo - 7035 .kl
Webpage - http://www.cck.com.my/
Key
Value Investor Criteria: -
Description
|
Value
|
Criteria
|
Point
|
Price
to Tangible Book Ratio
|
0.78*
|
<
1
|
5/5
|
Return
on Asset
|
3.06*
|
>
0
|
4/5
|
Return
on Common Equity
|
7.32*
|
>
0
|
5/5
|
Quick
Ratio
|
0.58*
|
>1
|
0/5
|
Total
Liability / Total Asset
|
34.82
%
|
<50 span="">50>
|
3/5
|
Continue
Dividend over Past 10 Years / Since Inception
|
Yes
|
Yes
|
1/1
|
Historical
Dividend Yield
|
4.85
%
|
>3%
|
1/2
|
Cash
From Operation
|
Positive
> 5 years
|
Positive
|
5/5
|
P/E
|
12.22
|
10
|
0/2
|
Total Point
|
24/35
|
Note:
* Data obtain from Bursa Marketplace on
12/9/2016
Company
Profile
CCK
had three major business segments as follows:
1) Poultry
(28.48% of 2015 revenue)
2) Retail
(54.56% of 2015 revenue)
3) Corporate
(10.60% of 2015 revenue)
4) Prawn
(5.26% of 2015 revenue)
1)
Poultry
CCK
poultry division is capable to process 4000 birds per hours. CCK poultry is the
only poultry abattoir in Sarawak with a HACCP certificated which enable them to
have competitive advantage in the domestic and international market.
These
division is mainly focus on chicken meat and eggs. Besides that CCK also have
beef and lamb product.
PROS:
|
|
CONS:
|
|
2)
Retail
This division
contributed the largest revenue for the financial year 2015 (56.56%). This
division focus of trading cold storage product such as CCK fishball, CCK mix
vegetable, CCK Nugget, CCK crab meat, CCK golden fish cake and CCK chicken
satay. CCK consists of 40 wholesale and retail stores in Sabah, Sarawak and
Peninsular Malaysia.
3)
Corporate
CCK did not state
clearly what is the main business for these segment in the annual report only
state it is provisional for management services. It might be the management
service provided to the associate company and joint ventures; CCK-BME Sdn Bhd,
Mukah Seafoods Industries Sdn Bhd and PT. Central Coldstorage Khatulistiwa
(Indonesia).
CONS:
|
|
4)
Prawn Segment
CCK also consist
division for produce and rearing of prawns and other seafood product. CCK has
45 ponds in operation to breed prawns. Most of CCK prawn will be export
globally such as Australia, Hong Kong, Japan, Dubai, Vietnam and Indonesia.
PROS:
|
|
CONS:
|
|
Financial
Statement
From the annual report
2015, CCK Property, Plant and Equipment had increase from RM 129,905,181 (2014)
to RM 199,224,168 (2015) but the increase is due to revaluation. CCK had done
revaluation to their freehold land and leasehold land of RM 8,975,537 and RM
54,898,984 respectively. Besides that, RM 42,000,000 of the RM 59,375,858
current ban borrowing is revolving credit which mean CCK only had to pay the
interest of the revolving credit when it is utilised.
The Operating cash flow
had increase from RM 12,339,863 (2014) to RM 23,327,504 (2015). Other than
that, the earning per share for the company had increase from 5.33 sen per
share (2014) to 8.70 sen per share (2015).
PROS:
|
|
CONS:
|
|
Director
and Shareholder
CCK is controlled by
its founder Datuk Tiong Su Kouk and his family. Datuk is assists by Mr Chong
Shaw Fui which has 44 years of experience in the field of poultry business who
oversee the poultry division. Besides that, Datuk Tiong Su Kouk is also assists
by his two sons. In one of The Star interview last year, Datuk said that he
will make sure his business to the best performer between his three sons,
daughter and son in law.
PROS:
|
|
Bonus
Issue & Share Buy Back
On 1st July
2016 CCK share had increase to 315,359,400 shares due to the 1:1 bonus issues.
On that day itself the price of CCK went down to RM 0.46 and bounced back and
closed at RM 0.52. When a company issue a bonus issue the company share is
diluted and the asset per share of the company is reduced hence theoretically the
price per share will be reduced as well. However CCK share price is able to
maintain close to its price before bonus issue. After further study, CCK share
price is maintain mainly because of the share buy back. These means that the
management is using the company to buy the diluted shares which is not a good
sign unless the company is really undervalue.
CONS:
|
|
Conclusion
After the review on
CCK, I will recommend SELL to CCK. This is because of the revaluation and
the share buy back after the bonus issue which had diluted the share.
Summary of Stock Reviews
Summary of Stock Reviews
CCK(7035) - CCK CONSOLIDATED HOLDINGS BHD Stock Review
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