Worthy Stocks

Author: dollardollarbill   |   Latest post: Thu, 3 Sep 2020, 9:37 PM


Sunway Bhd (5211) – Healthcare re-rating [$$bill]

Author: dollardollarbill   |  Publish date: Thu, 3 Sep 2020, 9:37 PM

Sunway Bhd (5211) – Healthcare re-rating


Sunway could see some upside if research houses start raising the valuation of its healthcare business.


Bloomberg reported today that Sunway is looking to sell a 20-25% stake in its healthcare unit that could fetch at least USD250 mil.


That means:

If a 20% stake is worth USD250 mil, 100% stake is worth USD1.25 bil.

If a 25% stake is worth USD250 mil, 100% stake is worth USD1 bil.


USD1 bil is about RM4.15 bil.


That is much higher than the valuations given by some research houses, such as:


Kenanga IB: RM1,788 mil

Hong Leong IB: RM1,734 mil

Affin Hwang IB: RM1,800 mil

UOB Kay Hian: RM1,250 mil


(See pics at bottom)


Among the four above, Affin Hwang gave the highest valuation of RM1.8 bil.


However, using that USD1 bil (RM4.15 bil) valuation, that’s still a surplus of RM2.35 bil or 42 sen per share (based on fully diluted no. of shares).


42 sen is equivalent to 30% of Sunway’s share price of RM1.40.


The research houses are valuing using the price-to-earnings method. If valued based on the number of hospital beds, Sunway’s heathcare business should fetch a higher valuation (read: https://www.theedgemarkets.com/article/unlocking-value-healthcare-business)


From research reports dated 26 Aug 2020:






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Labels: SUNWAY

Samchem Holdings - Rosy Demand Despite Disruption (report by RHB IB)

Author: dollardollarbill   |  Publish date: Tue, 21 Jul 2020, 4:23 PM

RHB IB report on Samchem today (21 July 2020). 













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KARYON (0054), potential beneficiary of surging glove production [$$bill]

Author: dollardollarbill   |  Publish date: Thu, 9 Jul 2020, 10:02 AM

KARYON (0054), potential beneficiary of surging glove production [$$bill]


This is a follow up on my previous Karyon post, link:

KARYON (0054), another under the radar Covid-19 play [$$bill]



Upon further research, I discovered more interesting details on the company.


Karyon could be seeing stronger growth due to higher demand for its stearate products which are used in the glove industry.


These stearates are used in rubber glove manfucturing as an anti-tack agent (a material used so that the rubber won’t stick)


You can Google more on how calcium stearate, zinc stearate and magnesium stearate are used in the glove industry.


This is a website of one company that explains the use of these stearate in the glove industry:

Source: https://www.mgmixing.com.my/faq.html


Karyon’s 100%-owned Allbright Industries (M) Sdn Bhd manufacturers metallic stearates, including calcium stearate, zinc stearate and magnesium stearate:

Source: http://www.allbright.com.my/metallic-stearate-series/




Karyon could well be a good proxy to the hottest sector now - Gloves.


Solid company with strong balance sheet. Cash of RM41.7mil vs. total borrowings of RM8.2mil. Net cash position of RM33.5mil (38% of RM88mil market cap). Strong operating cash flow of RM15mil in FY20.


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KARYON (0054), another under the radar Covid-19 play [$$bill]

Author: dollardollarbill   |  Publish date: Wed, 8 Jul 2020, 4:08 PM

KARYON (0054), another under the radar Covid-19 play [$$bill]


Shopping at MR.DIY gave me an interesting stock idea - Karyon Industries Bhd.


I noticed disinfectants on the shelves and took a closer look:

Taking another closer look, the bottom of the logo stated “PUBLIC LISTED ON BURSA”.

So this got me wondering if Karyon is another Covid-19 thematic stock which is still under the radar of most investors, as was with RGTBHD (see my previous blog posts below).

- RGTBHD (9954), the newly discovered Covid-19 thematic play [$$bill]


- RGT Bhd (RGTBHD 9554), riding on sanitiser dispenser demand caused by Covid-19 [$$bill]





The disinfectants are being sold in two versions: Ready-To-Use and Concentrate.


The active ingredients are recommended by agencies including The European Centre for Disease Prevention (ECDC) and Control and The National Environment Agency (NEA) of Singapore.


MR. D.I.Y. Trading Sdn Bhd is listed as the distributor on this label and they are selling the products online too. But these disinfectants are also directly sold on sites such as Lazada and Shopee. 


Fundamentally decent

Financially, the company is decent based on its recently released financial year ended 31 Mar 2020 (FY20) results



Balance sheet is strong with RM41.7mil in cash against total borrowings of RM8.2mil. This puts it in a net cash position of RM33.5mil, which is 39% of its RM86mil market cap (475.7mil shares at 18sen share price).


Strong operating cash flow of RM15mil in FY20.


The company has been paying dividends in the past 10 years and more. Total dividends in FY20 was 0.45 sen. 


Karyon’s track record in the past 10 years seems decent as well. A summary of their track record can be seen on YAPSS YouTube channel which featured Karyon early this year:


Karyon Industries Berhad (KLSE) #RTable - CashRich Series



Moving forward, Karyon would be an interesting stock to monitor. 


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Labels: KARYON

SCOMNET - No worries, growth is intact! [$$bill]

Author: dollardollarbill   |  Publish date: Wed, 1 Jul 2020, 9:04 AM

SCOMNET - No worries, growth is intact! [$$bill]


Supercomnet Technologies Bhd (Scomnet) recently spooked the market after it released its Q1 report on 25 June.


Investors became worried of its growth story after reading its Q1 financials notes which mentioned it anticipated revenue to decline this year.


However, that turned out to be an inaccurate statement. Scomnet released an amended announcement on 30 June.


Link: https://www.bursamalaysia.com/market_information/announcements/company_announcement/announcement_details?ann_id=3064407


The company clarified that it actually anticipates growth in 2020:



Scoment was probably referring to its traditional cable business when it mentioned that revenue would be lower. 


To me, Scomnet is a multiyear healthcare growth stock. It’s attractive also because there are not many heathcare stocks in the region that produces unique high-value medical products.


Growth will be driven by its two main customers: US-listed Edwards Lifesciences Corp and Denmark-listed Ambu.


To put in perspective, Edward Lifesciences is a company with a market cap of US$42 bil (RM180 bil).


That market cap is larger than all the glove stocks in Malaysia combined… Top Glove (RM43bn), Hartalega (RM44bn), Kossan (RM11bn), Supermax (RM11bn) and so on.


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RGTBHD (9554), riding on sanitiser dispenser demand caused by Covid-19 [$$bill]

Author: dollardollarbill   |  Publish date: Mon, 1 Jun 2020, 2:06 PM

RGT Bhd (RGTBHD 9554), riding on sanitiser dispenser demand caused by Covid-19 [$$bill]



This is a quick update from my previous RGT Bhd post:

RGTBHD (9954), the newly discovered Covid-19 thematic play [$$bill](https://klse.i3investor.com/blogs/dollardollarbill/2020-05-21-story-h1507774981-RGTBHD_9954_the_newly_discovered_Covid_19_thematic_play_bill.jsp)


Brief intro:

How is RGT benefiting from sanitiser and hand soap dispensers?


RGT’s major customer is Newell Brands Inc, which contributes to the bulk of RGT’s revenue.


Newell owns Rubbermaid Commercial Products, which sells sanitiser dispensers and hand soap dispensers that is manufactured by RGT.


Newell has a few business segments, but its Commercial segment (which Rubbermaid Commercial Products is under) is seeing strong demand.


What I would like to highlight in this post is about Newell’s Commercial business. Below are quotes from Newell 1Q 2020 earnings conference call:


Rubbermaid Commercial Products also saw an improved top line trajectory in the first quarter with strong demand for washroom and commercial hand sanitizer products as well as cleaning and maintenance equipment.”


“Our Commercial business is also poised to have a strong second half. We have a strong order book, and we believe we'll be able to fulfill these orders in Q3 and Q4 as supply constraints ease.”


“The Commercial business was also a beneficiary from increased consumption of sanitizing and cleaning supplies.”


“And then Commercial in the first quarter was clearly a big winner. There, I think where the trends, the order book is very full. But there were, especially on things like sanitizer and stuff, there's certain supply constraints on how much we can meet them. But as we are expanding capacity, we think that over time we'll be able to fulfill that.”


The transcript of the conference call can be read here: https://finance.yahoo.com/news/edited-transcript-nwl-earnings-conference-055520536.html

Or can be listened to here: https://ir.newellbrands.com/events-and-presentations


RGT revenue is mostly from the United States, followed by Europe. By coincidence, these regions also have the most Covid-19 cases in the world.


As shops and offices open up for business, the demand for sanitiser dispensers and hand soap dispensers have shot up.


Government offices, commercial outlets and industries all around the world have been instructed to ensure availability of such sanitizers.


The new normal of being more hygienic…


The dispensers that RGT manufactures for Rubbermaid Commercial Products:




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Labels: RGTBHD

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