[KELINGTON GROUP BHD：2019年第4季度又获得了价值9,200万令吉的项目，然后在2019财年将新项目的总订单增加至3.86亿令吉；总订单额增长至6.46亿令吉，其中截至2019年12月31日的未偿订单为2.58亿令吉]

4Q19 vs 4Q18:
截至2019年12月31日的季度（“ 2019年第四季度”），集团的收入从去年同期（“ 2018年第四季度”）的1.106亿令吉微增至1.113亿令吉。回顾季度中，新加坡业务是最大的收入来源，达6060万令吉，占总收入的54％，比2018年第四季度的4600万令吉，year-on-year增长32％，因超高纯（“ UHP”）部门中有较多项目的完成。

在业务领域方面，UHP部门仍然是9020万令吉的主要收入来源，占总收入的81％，并在2019年第四季度录得80％的YoY强劲增长，而2018年第四季度为5020万令吉，这是由于新加坡和中国有较多项目的完成。工业气体的收入从2018年第四季度的140万令吉提高到2019年第四季度的410万令吉，因为它得到了新的液态二氧化碳工厂的首笔贡献，该工厂于2019年10月竣工。

毛利从2018年第四季度的2,020万令吉，YoY增长11％至2,240万令吉，毛利率为20.2％，高于去年同期的18.2％。这主要是由于UHP部门项目的利润率提高。税前利润（“ PBT”）YoY增长36％至2019年第四季度的1,020万令吉，而2018年第四季度为750万令吉，PBT利润率为9％。集团的税后利润（“ PAT”）增长46％至750万令吉，而2018年第四季度为520万令吉。

YTD19 vs YTD18：
截至2019年12月31日止的财政年度（“ FY2019”），集团的收入YoY增长9％至3.799亿令吉，而上一年同期（“ FY2018”）为3.50亿令吉，因UHP和项目工程部门的收入贡献较高。

由于新加坡有更多项目的完成，UHP的收入从2018财年的2.264亿令吉，到2019年第四季度YoY增长16％或3600万令吉。同时，来自工艺工程的收入从一年前的7560万令吉，YoY增长20％至2019财年的9040万令吉，为第二大收入来源，占了24％。工业气体部门的收入也从一年前的360万令吉增加至2019财年的790万令吉，因为它开始确认2019年10月完成的新液态二氧化碳工厂的收入。

在2019财年，新加坡按地区划分的收入贡献为47％或1.776亿令吉，比去年同期的1.115亿令吉YoY增长59％。毛利从去年的5880万令吉，2019年YoY增长8％至6340万令吉。税前利润YoY增长25％至3140万令吉，而2018财年为2500万令吉，导致税前利润率在2019财年升至8％。 PAT从2018财年的1,830万令吉增加29％至2019财年的2,350万令吉。

4Q19 vs 3Q19：
集团的收入在2019年第四季度增加了15％，达到1.113亿令吉，而截至2019年9月30日的上一季度（2019年第三季度）为9700万令吉，主要是由于中国和新加坡业务的贡献增加。与2019年第三季度相比，新加坡的收入在第四季度都比上一季度增长了26％，而中国的收入在2019年第四季度比上一季度增长了10％，这是由于两国在UHP部门的项目完成率较高。

毛利率从2019年第三季度的1,210万令吉，增长85％达到2200万令吉，毛利率从2019年第三季度的12.5％提高到20.2％。 PBT在2019年第四季度QoQ增长35％至1,020万令吉，而在2019年第三季度为750万令吉。该集团的PAT在2019年第四季度为750万令吉，而在2019年第三季度为520万令吉。

截至2019年12月31日，集团的股东权益（不包括非控股权益）从1.161亿令吉增长34％至1.554亿令吉。该增加主要归因于convertible warrants的行使，员工持股计划的行使以及持续的季度利润。截至2019年12月31日，手头现金总额增至8240万令吉，超过总债务3850万令吉，因此集团仍处于净现金状况。每股净现金为14仙。

前景：
在充满挑战的经营环境中，Kelington的2019财年表现令人满意，收益实现两位数增长。 UHP和Process Engineering部门是该集团的主要增长动力，他们预计将保持向前的势头。

在2019年第四季度，他们继续收到来自新加坡和中国的UHP和Process Engineering部门的大量订单补充。他们在2019年第4季度又获得了价值9,200万令吉的项目，然后在2019财年将新项目的总订单增加至3.86亿令吉。

尽管现在的经营环境疲软，但他们在2020财年开始时表现乐观，因为在今年的前两个月，他们收到了约1.05亿令吉的新订单。包括从2018财年结转的项目和2019财年的新订单，Kelington的总订单额增长至6.46亿令吉，其中截至2019年12月31日的未偿订单为2.58亿令吉。

科艺集团对自己的增长前景感到乐观，因为他们继续努力争取在关键市场上开展更多项目。除此之外，科艺集团在进军工业气体业务方面取得了积极进展。自2019年10月下旬开始运营以来，新的液态二氧化碳工厂的建设已经完成并取得了首次收入贡献。Kelington预计，随着订单的增加，产量将逐步提高，他们预计从2020财年起这项新业务的贡献将更大。

集团在马来西亚以外的主要业务（台湾，中国和新加坡）以这些国家/地区的当地货币进行运营。因此，科艺集团享有自然货币对冲的优势，从而最大程度地降低了科艺集团面对货币市场波动的风险。
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Since Recommended Return:

a) FRONTKN (FRONTKEN CORP BHD), recommended on 12 Aug 18, initial price was RM0.715, rose to RM2.23 (dividend RM0.04) in 1 year 8 months 18 days, total return is 217.5%

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James Ng
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[KELINGTON GROUP BHD: They clinched an additional RM92 million worth of projects in 4Q2019 which then boosted their total new project orders to RM386 million in FY2019; total orderbook grew to RM646 million, of which RM258 million remains outstanding as at 31 December 2019]

4Q19 vs 4Q18:
The Group’s revenue for the quarter ended 31 December 2019 (“4Q2019”) increased marginally to RM111.3 million from RM110.6 million from the same period last year (“4Q2018”). During the quarter under review, the Singapore operations was the largest revenue contributor at RM60.6 million or 54% of total revenue, rising 32% year-on-year (“YoY”) from RM46.0 million in 4Q2018, on the back of higher projects completion in the Ultra High Purity (“UHP”) division.

In terms of business segment, the UHP division remained as the primary revenue contributor at RM90.2 million, representing 81% of total revenue, and recorded a strong growth of 80% YoY in 4Q2019 against RM50.2 million in 4Q2018, driven by higher projects completion in Singapore and China. Revenue from Industrial Gases has improved to RM4.1 million in 4Q2019 from RM1.4 million in 4Q2018 as it registered maiden contribution from the new liquid carbon dioxide plant, which was completed in October 2019.

Gross profit grew 11% YoY to RM22.4 million from RM20.2 million in 4Q2018, with higher gross profit margins of 20.2% as compared with 18.2% from a year ago. This was mainly due to higher profit margins from the projects from the UHP segments. Profit before tax (“PBT”) increased by 36% YoY to RM10.2 million in 4Q2019 from RM7.5 million in 4Q2018, with PBT margins of 9%. The Group’s profit after tax (“PAT”) rose 46% to RM7.5 million versus RM5.2 million in 4Q2018.

YTD19 vs YTD18:
For the year ended 31 December 2019 ("FY2019"), the Group's revenue increased by 9% YoY to RM379.9 million as compared to RM350.0 million in the previous year’s corresponding period ("FY2018"), on the back of higher revenue contribution from UHP and Project Engineering division.

Revenue from UHP saw an increase of 16% YoY or RM36 million in 4Q2019 from RM226.4 million in FY2018 due to higher projects completion in Singapore. Meanwhile, revenue from Process Engineering grew 20% YoY to RM90.4 million in FY2019 from RM75.6 million a year ago, representing the second largest revenue contributor at 24%. Revenue from the Industrial Gases division also improved to RM7.9 million in FY2019 against RM3.6 million a year ago, as it starts to recognize revenue from the new liquid carbon dioxide plant completed in October 2019.

In FY2019, revenue contribution by geographical segments were led by Singapore at 47% or RM177.6 million, up 59% YoY from RM111.5 million a year ago. Gross profit improved by 8% YoY to RM63.4 million in FY2019 against RM58.8 million from same period last year. PBT grew 25% YoY to RM31.4 million as compared to RM25.0 million in FY2018, resulting in PBT margin rising to 8% in FY2019. PAT rose 29% to RM23.5 million in FY2019 from RM18.3 million in FY2018.

4Q19 vs 3Q19:
The Group’s revenue increased 15% to RM111.3 million in 4Q2019 as compared to RM97.0 million in the preceding quarter ended 30 September 2019 (“3Q2019”), mainly due to higher contribution from China and Singapore operations. In comparison with 3Q2019, revenue from Singapore grew 26% quarter-on-quarter (“QoQ”) in 4Q2019 while revenue from China rose 10% QoQ in 4Q2019, on the back of higher projects completion in the UHP division in both countries.

Gross profit was up 85% QoQ to RM22.0 million in 4Q2019 from RM12.1 million in 3Q2019, with improved gross profit margins of 20.2% against 12.5% in 3Q2019. PBT increased by 35% QoQ in 4Q2019 to RM10.2 million as compared to RM7.5 million in 3Q2019. The Group’s PAT stood at RM7.5 million in 4Q2019 versus RM5.2 million in 3Q2019.

As at 31 December 2019, the Group’s shareholder equity (excluding non-controlling interests) rose 34% to RM155.4 million from RM116.1 million. The increase was mainly attributable to the exercise of convertible warrants, exercise of employee's share scheme and continuous quarterly profit. The total gross cash in hand grew to RM82.4 million as at 31 December 2019, exceeding the total debt of RM38.5 million, as a result the Group remained in a net cash position. Net cash per share stood at 14 sen.

Prospects:
Kelington’s FY2019 performance has been satisfactory, with double-digit growth in earnings, amidst the challenging operating landscape. The UHP and Process Engineering divisions were the key growth drivers to the Group, and they expect to sustain the momentum going forward.

In 4Q2019, they continue to receive strong replenishment of orders from the UHP and Process Engineering divisions originating from Singapore and China. They clinched an additional RM92 million worth of projects in 4Q2019 which then boosted their total new project orders to RM386 million in FY2019.

They started FY2020 on a positive note as they received approximately RM105 million worth of new orders in the first 2 months of the year, despite the soft operating environment today. Inclusive of the carried forward projects from FY2018 and new orders in FY2019, Kelington’s total orderbook grew to RM646 million, of which RM258 million remains outstanding as at 31 December 2019.

The Group is optimistic on their growth prospects as they continue to work hard to clinch for more projects across their key markets. In addition to that, the Group has made positive developments in its foray into the Industrial Gas business. The construction of the new liquid carbon dioxide plant has been completed and registered maiden revenue contribution as it commenced operations since late October 2019. Kelington expects production to ramp up progressively as orders increase, and they anticipate better contribution from this new business from FY2020 onwards.

The Group’s key operations outside Malaysia, which are Taiwan, China and Singapore are carried out in the respective local currencies of those countries. Hence, the Group enjoys a natural currency hedge, and this minimizes the Group’s exposure to the fluctuations in the currency markets.
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I wish to share my strategy to readers, hope that they can perform well after reading this. I am using Fundamental Analysis:

the forecasted growth of a company must > 14% per year

I wish to convince readers to learn FA in order to make money from stock market.

I am providing STOCK PICK SERVICE for readers who want to make money from Malaysian stock market. Those who want to subscribe to my mailing list to achieve a good return from stock market, you can contact me at jamesngshare@gmail.com or PM me in my FB page.

This sharing is purely a discussion and analysis of the sector, buying or selling at your own risk. Please Like and Share this post. Final decision is always yours, thank you.

James Ng