High Growth Defensive Stock!!
1. Johotin majority business is to produce tin cans ranging from confectionary to paint and chemicals, and F&B dairy products. These two businesses contribute 23% and 67% to their total revenue, with average rate of return of 5-8%.
2. The production line situated in Johor bringing about 160,000 tons of dairy products every year, with maximum capacity that can go up to 220,000 tons/year. The group has announced that they have purchased a land in Klang for expansion to increase production capacity through their wholly-owned subsidiary – Able Dairy.
3. Johotin invested USD 5millions in Mexico, owning 43% of shares through affiliation in order to expand their dairy business to the Americas. The maximum capacity of this factory plant can go up to 160,000 tons.
4. The production in Mexico will start operating in December 2020. Running of 70% capacity of the plant can bring RM10millions of net profit to Johotin.
5. Due to MCO, the production in 2020Q1 and 2020Q2 was capped at 50% capacity, which was unfavorable to the company. But, we forecast that Q3 and Q4 can turn this unfavorable situation over and total revenue for this financial year can go up to RM40millions and above.
IS THE BUSINESS DOING GOOD??
Source: JOHORE TIN BERHAD ANNUAL REPORT 2019
IS THE COMPANY HEALTHY??
FUTURE GROWTH DRIVER & FUTURE PROSPECT:
IS WORTH TO BUY IN NOW??
#J.WOLF INVEST #JOHOTIN #GROWTH
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Disclamer: Nothing contained in this article should be construed as investment advice. Any reference to an investment's past or potential performance is not, and should not be construed as, a recommendation or as a guarantee of any specific outcome or profit.