Financial Farmer Times

New Hoong Fatt - will it keep trending upwards?

finfarm
Publish date: Thu, 30 Mar 2017, 04:17 PM

Based on New Hoong Fatt latest quarterly results announcement (http://www.bursamalaysia.com/…/company-announcements/5349061) below are what I've noted:


- Revenue increased by 12%
- YTD Net profit for the period increased to 29mil, an increased of 55% compared to previous years.
- Cash/Debt level is at 68% although its debt has increase by 24% to 35mil.
- the increase of Profit before tax (PBT) partly contributed by some fair value gain on investment properties and gain on disposal of PPE of 1.2mil with a realised forex gain of 7.3mil - Total of 8.6mil which i like consider as non ordinary profit.
- After adjustment of 8.5mil, there is still an increased of profit of 11%, assuming no changes on the tax expenses.
- Based on its segmental results, Trading has managed to achieve a marginal profit of less than 1% although its revenue is higher than manufacturing and its Investment activities achieved marginal loss.
- Its main profit contribution is still from its manufacturing operation and mainly from Malaysia and Non Asean market. Overall, its revenue has increased from 3 of its geographical segments. (Malaysia, Asean & Non Asean countries.)
It has a capital commitment 52mil which has not been provided for in its notes 14. Not sure detail of this. It could be for some expansion plan.

 

Overall, it has achieved better than what I expected. Just few questions that i had in mind from this results:

a) The trading activities doesn't seem to be contributing much on its profit. Are they trading complementary products? What is their plan on this business segments?

b) What are the capital commitment of 52mil provided for? Is there any expansion plan? How will this be financed?

c) What is the management 's view on the FY 17 performance since they stated the outlook remain challenging. What should investors expect?

 

Happy Exploring!

 

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Created by finfarm | Mar 30, 2017

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