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Author: Tan KW   |   Latest post: Fri, 27 Nov 2020, 10:58 PM

 

COMMENTS ON UNITED MALACCA BERHAD (2593) - louisesinvesting

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FIGURE 1: UNITED MALACCA BERHAD LAST 5 YEARS SHARE PRICE TREND
 
**analysis based on 2019 annual report.
1.       GENERAL INTRO: UNITED MALACCA is one of the main oil palm plantations in Malaysia.
 
2.       NOTABLE POINTS:
a.       In 2019 report, reported losses of -18.61 sen per share in current financial year due to low crude palm oil prices and new adoption of the Malaysian Financial Reporting Standards.
b.      The Group has three mills with a mill total processing capacity of 80 MT/hour
 
3.       IS THIS COUNTER A STRONG GROWTH STOCK? 
a.       REVENUE RANGE (million): ~207.3 million in 2019 annual report, this is a low revenue company.
b.      SHARE PRICE: from 2015-2019, share price fluctuated from around RM5.00 to RM7.00
c.       EARNING PER SHARE (EPS): earning per share in last 5 years fluctuated from -18.6 to 40.4sen
d.      FUTURE POTENTIAL/PROSPECTS: share price may drop further if company continue to make losses.
e.      CAPITAL EXPENDITURE (CAPEX): spending on purchase of new fixed assets is RM 90.5 million, around 4% of total assets.
 
4.       IS THIS A STRONG DIVIDEND STOCK?     
a.       DIVIDEND YIELD: in 2019 financial year, UNITED MALACCA declared a dividend payout of 8 sen per share to shareholders, despite facing losses. The dividend yield amounts to 1.5%.
b.      CONSISTENCY: consistent dividend payout, last five years (2015-2019) dividends declared range between 8 to 23 sen per share, whereby the dividend yield ranged from 1.5 to 3.7%.
c.       DIVIDEND PAYOUT RATIO: in 2019 financial year, UNITED MALACCA paid out -42.99% of its earnings to investors in the form of dividend.
 
5.       IS THE MANAGEMENT PERFORMANCE GOOD?
a.       RETURN ON EQUITY (ROE): in 2019 financial year, UNITED MALACCA achieved a low return of shareholders’ equity, at 3%. The ROE in last five years ranged from 1.6 to 4.8%.
b.      COST-TO-INCOME RATIO: cost-to-income ratio is negative at about -517%, due to losses in the financial year.
 
6.       OTHER INDICATORS:
a.       CASH FLOW: cash flow is positive, around RM 46.8 million, equivalent to RM 0.22 per share
b.      SUPPORT BY INSTITUTIONAL INVESTORS: this counter is not well supported by institutional investors, there are only 20 institutional investors at top 30 major shareholders list, including EPF (0.82%), OCBC BANK LTD (14.11%), GREAT EASTERN LIFE ASSURANCE (13.44%), PROSPER PALM OIL MILL SDN BHD (10.72%), insurance companies and investment funds. 

 

 

http://louisesinvesting.blogspot.com/2019/12/comments-on-united-malacca-berhad-2593.html

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