Posted by kcchongnz > Jun 3, 2013 10:26 AM

Cenbond, is it a good company? Is it a good investment? 

By looking at how its share price jumped from 90 sen to RM1.61 at the close of the market on 31/5/2013, there must be something about this company, isn’t it? 

Cenbond business includes paper packaging, plastic packaging, contract manufacturing and packing sale of household care products and adhesive products, and investment and property holding. 

Revenue for fy ending March 31 2013 shows an improvement of just 3% from 182m to 187m. However its net profit jumped by 32% to 20.6m. Margin improved by 2.6% which is substantial for this type of industry which could positively affect its bottom line. This helps in its return of total capital which improved from 15% to 17%, way above its cost of capital. 

Is Cenbond reasonably priced after the jump in its share price recently. Yeah of course. Below is my assessment whether Cenbond is a good company and a good investment. 

Cenbond a Good company? 1.610
Good governance ?
Durable business Yes
Growth Yes
ROE Yes 13% >12% 
ROTC Yes 17% >WACC 
Balance sheet Yes D/E 0.03 
Cash flow Yes

Screens for investing
ROTC Yes 17% >WACC 
P/B Yes 1.3 <2.0 
PE ratio Yes 10.1 <20