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  fhis Company Profile Wellcall Holdings Berhad is Malaysia’s largest industrial rubber hose manufacturer. Originally serving for three major application markets, the company has scaled up its markets to more than six, including the air & water, welding & gas, oil & fuel, automobile, ship building, as well as food & beverage. Investment Merits 1. Recovery in Global Economy Boosted Sales - After a rough 2016 year, Wellcall has finally posted exciting results for FYE 2017. Riding on global recovery following better oil prices, demands for industrial rubber hose are expected to follow suit. - While the overall effect has yet to remain unknown, the company has in fact performed better with 18.32% and 16.41% surge in the revenue and net profit respectively. The better performance is due to higher sales achieved on the back of higher demands from its clients. - As almost 90% of its sales are derived from export markets, the recovery in global economy would provide the company a better earnings visibility moving forward. - Wellcalls’ export markets spread quite evenly across developed and emerging markets, and this would help to balance out the concentration risk. 2. Attractive Dividend Yield - Wellcall has been giving out dividend since its listing, and has a dividend policy to distribute a minimum 50% of its net profit annually. - For FYE 2017, the company has paid dividends of 7.7 cents, equivalent to a dividend yield of 4.97%, which is considered high among mid and small cap peers. - If we were to compare the company with gloves manufacturers which also use nitrile rubber as raw materials, we would see Wellcall’s dividend yield would be the best, with others mostly stay at 1% -3%. 3. Gearing Up for Production and Efficiency - It is known that Plant 3 of the company has yet to reach full production capacity, giving it more room to grow moving forward. - We are aware that the plant has opted for more automation as compared to the previous two, potentially driving down the cost but also improving the quality and production efficiency. - The company is said to have its Plant 2 for higher capacity and automation upgrading. 19/02/2018 11:12 AM fhis Financial Highlights The forecast for FYE 2018 is derived from a conservative growth rate based on the company ’s previous performance. However, the outlook for industrial hose manufacturing sector remained positive due to orders start picking up again after having slowed down in 2016. (RM Mn) Forecasts Period Ending September 30 2011A 2012A 2013A 2014A 2015A 2016A 2017A 2018F Total revenue 136.83 154.21 131.53 146.37 158.33 134.49 159.13 171.9 Cost of goods sold Cost of goods sold (108.65) (115.18) (91.70) (99.20) (101.94) (83.00) (100.1) (106.6) Gross profit 28.18 39.03 39.83 47.17 56.39 51.49 59.03 65.31 Operating expenses / income Other operating income 3.10 2.53 3.57 3.63 6.45 2.38 3.46 3.95 Selling and distribution costs (4.02) (4.27) (4.06) (4.23) (3.96) (3.71) (4.12) (4.47) Administrative costs (4.67) (6.06) (6.26) (7.60) (9.52) (9.18) (9.18) (10.31) Other operating expenses - - - - (0.12) (0.21) (0.43) (0.52) Total operating expenses / income (5.59) (7.80) (6.75) (8.20) (7.15) (10.72) (10.27) (11.34) EBIT 22.59 31.23 33.08 38.97 49.24 40.77 48.76 53.96 Interest Interest expense (0.26) (0.25) (0.23) (0.26) (0.48) (0.98) (0.93) (1.08) EBT 22.33 30.98 32.85 38.71 48.76 39.79 47.83 52.88 Income tax expense (7.01) (7.62) (8.15) (9.25) (7.21) (8.47) (11.37) (12.69) Net Income (as Reported) 15.32 23.36 24.70 29.46 41.55 31.32 36.46 40.19 Earnings per share (EPS) Basic 3.08 4.69 4.96 5.92 8.34 6.29 7.32 8.07 Margins Operating margin 16.51% 20.25% 25.15% 26.62% 31.10% 30.31% 30.64% 31.40% PBT margin 16.32% 20.09% 24.98% 26.45% 30.80% 29.59% 30.06% 30.77% Net margin 11.20% 15.15% 18.78% 20.13% 26.24% 23.29% 22.91% 23.39% Actuals Consolidated Income Statements Q-o-Q Y-o-Y % % Revenue RM Mn 32.30 39.01 43.62 11.82% 35.05% Cost of sales RM Mn (20.06) (24.96) (27.65) 10.78% 37.84% Gross profit RM Mn 12.24 14.05 15.97 13.67% 30.47% Other operating income RM Mn 0.64 0.06 0.25 331.03% -60.94% Administrative expenses RM Mn (2.84) (2.29) (2.15) -6.11% -24.30% Selling and distribution expenses RM Mn (1.02) (1.02) (0.96) -5.88% -5.88% Other operating expenses RM Mn - (0.03) (0.40) 1279.31% Profit from operations RM Mn 9.02 10.77 12.71 18.02% 40.91% Finance costs RM Mn (0.14) (0.23) (0.21) -8.70% 50.00% Finance income RM Mn 0.24 0.23 0.26 13.04% 8.33% Profit before tax RM Mn 9.12 10.77 12.76 18.49% 39.91% Taxation RM Mn (1.29) (2.68) (2.88) 7.46% 123.26% Net profit RM Mn 7.83 8.09 9.88 22.14% 26.18% Minority interest RM Mn - - - PATMI RM Mn 7.83 8.09 9.88 22.14% 26.18% EPS sen 1.57 1.62 1.98 22.14% 26.18% Margins Operating margin 27.93% 27.61% 29.14% PBT margin 28.24% 27.61% 29.25% Net margin 24.24% 20.74% 22.65% 19/02/2018 11:14 AM Dartmaster this shows that JP Morgan is managed by a bunch of goons. Earnings deteriorated same as MEDIA that they have been busy buying up. They only know one thing control and buy up enough shares and pump and dump 26/02/2018 5:08 PM CFTrader @Sleang, do you know/inquiry about which type of cost escalate further up during the AGM meeting ? I googled the price of natural rubber (which is their main cost) , it appears to be downtrend and i cannot brain the logic of "increase cost" ... If they suffered from increasing cost due to Factory 3 efficiency then that is a temporary problem... but if their margin is eroded .... well ... let's say that their margin is one of the prized jewel that gives them superb valuation.... Sincerely CFTrader 26/02/2018 11:28 PM sleang Nope, management did not mention what costs are those...its in the Report...share price touching 1.51...will climb back to 1.55 to pre-results level?? 27/02/2018 10:49 AM CFTrader omgimnoob, i mean, what i noticed is rubber is downtrend on Sep17 to Dec17 , and if not mistaken, SMA20 is their main cost (?) which compose of 50%... So i wonder why the report recently suffered from increased cost (?) Just want to clarify my doubt. :) 02/03/2018 5:19 PM CFTrader good company doesn't sell cheaply . But when it is priced cheaply , be sure to grab it :) Sincerely CFTrader 01/05/2018 1:03 PM CFTrader 1. Cost of Production is increased .... Why ? - Rubber price is downtrend, but it is not the major cost of production. - Synthetic Rubber consumption is in fact, higher (5 times more) consumption than natural Rubber. - Synthetic Rubber price is on increasing trend for the past 9 month. - Hence, WELLCAL factored in the cost that bought on the higher side. - Forex issue. 2. Factory 3 issue. - It is not simple as improve production volume by 70%. - Factory 3 is divided into 3 parts. - Part 1 : Mandrel hose production line. - fully utilized - Part 2 : Spiral hose production line - unsure of utilization rate, they need to secure more customer (customer in this field tends to be loyal/recurrent, hence wellcall claimed that they need extra effort to penetrate this market ) - Part 3 : For sudden demand surge / change in the trend. Currently vacant. 3. Workforce issue. - has no shortage of foreign worker issue. - Foreign worker compose of 50% of workforce. - No problem with KDN. 4. Revenue Growth - Trailing 6 month order is increased by approximate 7%-8%. - Largest market is category is Oil,Gas,Water,Air hose production - compose of 60% of the sales. - Oil and Gas - compose of approximate 40%-45% of the category. - They securing some US client that involving in the O&G company where they will place recurrent order every 4 month. Sincerely CFTrader 31/05/2018 5:25 PM CFTrader Ermmm .... Revenue is indeed increased by 8% as CFO informed me. Revenue stood at 42M GP is 12.8M (compared to previously 14M Profit From Operation Exclude One Off Gain is 9.394M vs 10.7M Margin compression is real ... In summary : True Earning : 1.36c Forex Gain : 0.21c Hence total EPS : 1.57c 28/08/2018 6:26 PM Jasper Coo Very confident stock, good to invest it and then can buy more car HAHAH! 06/09/2018 10:41 AM YKLIEW Better be quiet and steady during these bear days. At least don't plunge.. Ha ha 25/10/2018 12:03 PM CFTrader EPS 1.98c vs 2.04c Single tier dividend 1.4c vs 1.55c There is almost 1m of forex gain (i suppose) covered the hike of the material price... Overall good dividend :) Sincere, CFTrader 26/11/2018 5:32 PM CFTrader omgimnoob, you can contact Wellcall's IR ... they usually don't respond to email, as quote from the guy "I'm scared that I'm giving the wrong impression by writing, I would like to clarify through a phone call" . ps. if you planned to call them, can you inquiry about what they going to achieve with the new JV ? I am lazy to call them , still in CNY mode . :P SIncerely CFTrader 19/02/2019 10:04 AM  James Yeo Wellcall Holdings Bhd has a track record of consistent dividend payouts over last 5 years. Check out other 2 similar stocks at https://klse.i3investor.com/blogs/small_cap_asia/195122.jsp 26/02/2019 11:03 AM L2earn https://www.malaysiastock.biz/Corporate-Infomation.aspx?securityCode=7231 http://malaysiastock.biz/Company-Announcement.aspx?id=1122940 EPS 1.91c Dividen 1.40c 26/02/2019 12:47 PM CFTrader Investment grade company, talked to their management team before when M.A.S. is formed. I like their S.O.P. in doing business . To me, there are 2 "well"ness in Bursa, one is WELLcall, while the another one is chinWELL hahaha. Sincerely CFTrader 26/02/2019 2:50 PM  Manekineko Thanks @ James Yeo and CFTrader. Did my homework, the fundamentals are solid. Also think the JV is a catalyst if they execute well. Now in my watchlist. 26/02/2019 3:27 PM Investeye The Q result is OK. With the prospect of join venture with Trelleborg and consistency to payout dividend quarterly. It is worth to look into this counter for mid and long term.. 26/02/2019 4:32 PM Tanleechoo Those Malaysian co owned n run by Taiwanese are good... Chinwell n wellcall .. PIe .. uchitec . FPI n ySpsah .. can sleep well when invest in the co 02/03/2019 11:03 PM CFTrader Taiwanese-run company in Bursa , they will have a similar trait. They will earn money, then declare the profit as dividend, so that they can enjoy it (as most of them are substantial shareholder) Instead of Malaysian-run company that declare fat renumeration and don't declare a single shit dividend to shareholder, Taiwanese run company is very suitable for those who invest for dividend (and future dividend growth) . Sincerely CFTrader 19/03/2019 2:32 PM CFTrader I'm always a fan of a company that always suffered from pressure to declare dividend , but I always check if they really need to loan/borrow money to declare dividend. One of the fine example is MAYBANK .. The largest shareholder is PNB .. PNB need cash for other operation, that makes MAYBANK very generous with their dividend policy .. because the owner needs it. Haha. Sincerely CFTrader 19/03/2019 2:34 PM 小糖 the survival in the wild, you cannot show you true intend directly, else it will be subjected to a lot of manipulation 17/04/2019 1:11 PM fried_rice_king nicely done wellcall , next year venture with sweedish big company too 24/05/2019 10:33 PM CFTrader * For this quarter (reflect the end of March), please do notice that PPE - WIP (For those who don't know what is WIP , it mean Work In Progress) is RM 4.8 Million. * Previous Quarter was RM 0.644M. * WELLCAL decide to devote RM 9.2 Million for the JV. * My crude estimation of completion of the new JV will be end of this year. Sincerely CFTrader. 25/05/2019 12:23 PM uss uss The revenue of the company is increasing, and the profit of 2019 is pretty good compare to the previous year with decrease in cost production (avg abt 64.5% for Q1,2019- Q3,2019) even though the raw materials price remain high. The demand of industrial rubber hoses is recovered gradually. This company more than 80% of the sales are exported to other countries....i think the strong USD should bringing some good impact to the company profit. The main factor that affect the company profit is the raw materials. 26/09/2019 2:51 PM uss uss this is indeed a good news to wellcall as the company is able to get cheaper raw materials. 08/10/2019 4:11 PM Freedom Investor The Group successfully sailed through the volatility of global industrial rubber hose market, recorded revenue of RM170.109 million in current financial year with slight decrease of approximately RM1.015 million (1%) as compared to previous financial year of RM171.124 million. The export and local market contributed approximately 91% and 9% respectively to the Group's annual revenue. The overall revenue achieved remain fairly consistent with previous financial year was mainly attributable to continuous orders and market demand for industrial rubber hose. The Group recorded a high PBT of RM49.532 million for the current financial year ended 30 September 2019 as compared to PBT of RM42.844 million recorded in preceeding financial year, representing an improvement of RM6.688 million (16%) increase. Higher PBT achieved was mainly due to constant operational efficiency arising from effective cost management, primarily resulted from productivity. 29/11/2019 9:48 AM Freedom Investor FY9/19 core net profit was largely in line with expectations at 102% of our and consensus’ full-year forecasts. The US was the best performer among its export markets in FY19; its export revenue to the US grew 18.5% yoy to RM51.2m. The stock remains an Add. Our TP rises from RM1.45 to RM1.54 as we roll forward our valuation. Dividend yield remains attractive at 4.8%. 02/12/2019 3:37 PM  |
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