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Author: Icon8888   |   Latest post: Mon, 25 Nov 2019, 11:10 AM

 

(Icon) Comcorp (1) - Super Export Play Trading at 3.7x PER. Potential Upside of 170%.

Author:   |    Publish date:


 

Executive Summary

(a) Comintel Corp (Comcorp) is principally involved in contract manufacturing services, specializing in Radio Frequency engineering products.

(b) Its manufacturing division accounted for 96% of group revenue. According to annual report, entire 100% of its revenue is denominated in US Dollar.

(c) Yesterday, Comcorp announced its October 2015 quarterly result. EPS came in at 3.47 sen. Based on latest share price of 52 sen and annualised EPS of 14 sen, PER is only 3.7 times.

(d) Earnings explosion was due to profit margin expansion caused by strong US Dollars. In my opinion, USD will remain strong over an extended period of time. The group's strong earning should be sustainable.

(e) By applying a PER of 10 times, fair value should be RM1.40, a further upside of 170%.

 

 

1. Background Information

 

Comcorp is listed on the Main Market of Bursa Malaysia. It has 4 major divisions. However, the manufacturing division dominates both revenue (96%) and net profit (100%). 

 

Comcorp is a contract manufacturer, just like VS Industry. It specializes in manufacturing of Radio Frequency engineering products.

 

It is a pure exporter with 100% of its manufacturing revenue denominated in US Dollars (please refer below).

 

 

 

2. Historical Profitability

 

The table below sets out Comcorp's past few quarters P&L :

 

 

Key observations :-

 

(a) The group has not been performing well in the past. For example, in October 2014 quarter, the Group reported net profit of RM0.5 mil only. In that quarter, USD : RM exchange rate was 3.222.

 

(b) However, things improved dramatically in calender year 2015. In April 2015 quarter, net profit ballooned to RM1.9 mil despite flattish revenue. During that quarter, USD : RM exchange rate was 3.637.

 

(c) In the latest October 2015 quarter, net profit literally exploded. Backed by strong USD : RM exchange rate of 4.206, the group reported an astounding net profit of RM4.9 mil.

 

Y-o-y, revenue in US Dollar term has not grown at all (USD26.1 mil in October 2015 quarter vs USD26 mil in October 2014 quarter). However, the strengtheing of USD from 3.222 to 4.206 caused net profit to grow from RM0.5 mil to RM4.9 mil.

 

These are pure operating profit, not caused by Forex gain or any other exceptional items. As a matter of fact, the group incurred forex loss of RM1.4 mil in latest quarter.

 

The company is positive about its prospects going forward :-

 

 

 

 

3. Balance Sheets

 

The group has net assets of RM105 mil, loans of RM96.2 mil and cash of RM42.4 mil. Net gearing is 0.51 times.

 

I am totally not concerned about the Group's gearing. Some of the loans were drawn down to finance its new green energy division and they are backed by TNB offtake. Others are for working capital purposes.

 

The group's earnings are strong and capex requirement is low. They shouldn't have problem servicing their financial obligations.

 

 

 

4. Concluding Remarks

 

(a) The group has other divisons such as green energy, ICT and defense maintenance. However, they accounted for very small portion of the group's revenue and profitability.

The Group is essentially a contract manufacturer, same as VS Industry.

 

(b) This stock is UNDERVALUED BEYOND DOUBT. If you do not have the courage and the wisdom to take position at current price of 52 sen, you probably shouldn't be in the market.

 

BUY !!!!

 

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Labels: COMCORP

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Chart Stock Name Last Change Volume 
COMCORP 0.07 -0.01 (12.50%) 200,400 

  3 people like this.
 
Ryan88 300k to sapu anythings below 0.80 tmr
20/12/2015 6:03 PM
KeepMoving tmr another limit up?
20/12/2015 10:24 PM
Tkoklin Uma tomolo!
21/12/2015 12:11 AM
Tkoklin Post removed. Why?
21/12/2015 7:13 AM
Kevin Wong well done Icon, congratulations!
21/12/2015 12:21 PM
Contra_King Sold with 6 figure profit. Thanks Comcorp and especially to you Icon8888
21/12/2015 1:10 PM
sahamewah128 congrats for the spot on write up on Comcorp. looking forward to another gem soon. tks
21/12/2015 4:21 PM
wqlwqlwqlwqlwql timing already prove wat icon8888 y is right. were those ppl argue with him?
22/12/2015 1:23 PM
alphajack 1.20-1.30 by CNY
23/12/2015 11:58 AM
Jacky OYH Icon, do you think the price will be up in next week?
23/12/2015 10:47 PM
koonbee3 Dear all pls read how calvintaneng tembak and cannot answer my question...he really famous to mislead ppl

http://klse.i3investor.com/servlets/forum/800003035.jsp
23/12/2015 11:14 PM
Elixir The co is expected to do better nex qtr .this rfid ind has bright future and wud enjoy double digit growth . A fair earnings multiple of 12 times is not far fetch. With 14cts eps very soon the price may hit 1.68 congrats icon 88.speculate within 1.5 moths time.Medium sized funds are now looking into it
24/12/2015 7:02 PM
koonbee5 Next week Kaboom...Boom Boom Boom
24/12/2015 7:29 PM
koonbee5 I will buy anything below 0.745
24/12/2015 7:34 PM
koonbee5 Target 1.40 within 2 months...Kaboom
24/12/2015 7:34 PM
Laughgaodiemeliao almost 2 months liao... now how much??
29/01/2016 7:46 PM
Laughgaodiemeliao Posted by alphajack > Dec 23, 2015 11:58 AM | Report Abuse

1.20-1.30 by CNY


according to logic. the above mentioned person should have been KLC already due to his endless mistake calls.

KLC= kualouchan.
29/01/2016 7:56 PM
paperplane Don't worry! Drop 20% only. Pls change this title.
29/01/2016 9:28 PM
Icon8888 https://www.hubbis.com/individualprofiles-content/1012
29/01/2016 9:30 PM
Icon8888 Paperplane
29/01/2016 9:30 PM
paperplane Dont worry.
29/01/2016 9:34 PM
Icon8888 Steven yong got nice skin
29/01/2016 9:35 PM
Laughgaodiemeliao dont worry, it won't drop 170%
29/01/2016 9:35 PM
Laughgaodiemeliao unless you follow KYY and margin your stocks.
29/01/2016 9:35 PM
Icon8888 Apologise to icon...
29/01/2016 9:38 PM
paperplane http://klse.i3investor.com/blogs/Banicon/
29/01/2016 10:50 PM
paperplane Don't worry, by most drop 100% only downside limited, upside higher
30/01/2016 12:12 AM
Johnnys cannot drop 100% but 99.99% only
30/01/2016 5:43 AM
zbaikitree2 Upside 170% ka???
Why the author brain damage or pure stupid?
15/02/2016 6:47 PM
paperplane Tree,
15/02/2016 7:37 PM
zbaikitree2 yes paper. wasUp
15/02/2016 7:37 PM
paperplane Prepare bullet proof shirt pls.
15/02/2016 7:38 PM
zbaikitree2 already wearing.
15/02/2016 7:39 PM
zbaikitree2 Waiting for cacat icon to appear.....
15/02/2016 8:05 PM
Desa20201956 his hiding...

but did well for himself. money grow on trees.
15/02/2016 8:07 PM
Icon8888 Hey, results not out yet, why shoot me ?
15/02/2016 8:15 PM
zbaikitree2 Post removed. Why?
15/02/2016 8:18 PM
Icon8888 Kong hi fat choi
15/02/2016 8:19 PM
tkp2 optimus, Desa, paperplane, 3 of you bankrupt already ka? why so angry? me and Icon counting money until hands soft already, wakakakakaka
15/02/2016 8:20 PM
tkp2 see, Icon so happy, wish you all kong hi fat choi so more, you know why? because he counting money until hands soft
15/02/2016 8:21 PM
zbaikitree2 Rocketman. Your lies very teruk.....zzzzzz
15/02/2016 8:21 PM
tkp2 Me and Icon now don't talk so much already, because we so busy counting money, wakakakaka
15/02/2016 8:22 PM
tkp2 only ppl losing money like this 3 poor guys shouting only
15/02/2016 8:24 PM
zbaikitree2 Post removed. Why?
15/02/2016 8:24 PM
tkp2 you got ggj meh? i tot you potong already, you gay ma
15/02/2016 8:25 PM
zbaikitree2 Post removed. Why?
15/02/2016 8:25 PM
Desa20201956 give you a few more weeks.
15/02/2016 8:27 PM
Icon8888 I nowadays no energy to quarrel lah .... Old man no energy ....
15/02/2016 8:31 PM
tkp2 better save our energy counting money lah, quarrel with this 3 kids only when we are bored
15/02/2016 8:33 PM
paperplane Tkp, icon why so angry? Bankrupt liao? 30% loss coming.
15/02/2016 11:27 PM


 

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