Investor on the Street

ORIENT (4006) : Obscure Blue Chip. Obvious Opportunity?

Publish date: Sat, 22 Oct 2022, 12:32 PM

ORIENT (4006) is a Main Market company in the Consumer Products & Services segment.  

ORIENT is Oriental Holdings Berhad, (don't mixed up with Oriental Food Industries or Oriental Interest). This is the late Tan Sri Dato' Loh Boon Siew's company, now managed by his grandson, Datuk Loh Kian Chong. 

ORIENT's business is mainly in Automotive (49%) & Plantation (25%).

Is ORIENT selling at cheap price now?


1. Share price you pay is lower than Price to Book. 

ORIENT's share price is RM 6.84, whilst its net assets is about RM 11.34.


2. Best performance in FY2018 & FY2015.

ORIENT's revenue hit all-time high in FY2018. Net profit hit all-time high in FY2015. Share price all-time high was in June 2022 around RM7.80. FY2022 so far has been very good.


3. Financial Statements. 

ORIENT had positive net cash from operations consecutively in its recentmost 20 quarters. ORIENT usually has positive net cash from operations each quarter. ORIENT is a net cash company. ORIENT's net cash hoard of around RM 1.664 bil (as of latest quarter report 30 June 2022) is almost 39% of its current market capitalisation of RM 4.244 bil (as of 22 Oct 2022). ORIENT has given dividends annually as far back as 1999. (maybe even since IPO)


4. Insider dealings.

No significant insider dealings in 2022, but 2021 had few.

26.4.2021 & 27.4.2021- Datuk Loh Kian Chong's Loh Kar Bee Holdings Sdn Bhd bought 50k shares on both days at RM 5.23 & RM 5.22 respectively.

14/06/2021, 15/06/2021, & 17/06/2021- Dato Seri Lim Su Tong @ Lim Chee Tong's children's Loh Phoy Yen Holdings Sdn Bhd bought total of 2982 shares & United Formula Sdn Bhd bought total of 2988 shares at RM 5.26, RM 5.3566 , RM 5.3958.

Highly probable insiders thought ORIENT was undervalued then.

Hard to tell whether insiders think ORIENT is undervalued now. 


5. PE ratio is around 7.45 (trailing 4 quarters).

ORIENT's trailing PE ratio is low. However, it is believed due to cyclical highs of oil palm this year that boosted earnings and lowered PE ratio.

I have ORIENT shares. Suppose ORIENT produces an average net profit to shareholders of 95.3mil./quarter, given PE ratio of 12, ORIENT should be worth RM 7.38.

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