Journey to Wealth
Tomei Consolidated Berhad - BUY FV RM1.16
Within expectations Tomei Consolidated Bhd(Tomei) FY11 results were within our expectations. Net profit of RM31.2mclocked in at 96% of our full year target whilst revenue of RM505.4m was 10%higher than our estimate. For the full year under review, revenue surged 42%YoY, while operating margin improved marginally from 10.4% a year ago to 10.7%.The better results were contributed by both manufacturing & wholesale andthe retail segments on higher gold prices (Figure 2). Revenue contribution frommanufacturing & wholesale sales jumped 53% from RM74.4m to RM113.6m. PBTcontribution soared 70% to RM8.3m from RM4.9m. Higher earnings in the manufacturing& wholesale segment was mainly due to higher sales volume to other jewelleryretailers. Revenue contribution from the retail segment rose 39% to RM391.8mwhilst PBT from retail segment rose 41% to RM24.2m. Improved consumers spendingin gold investment products and higher retail price in gold
contributed to better results. Theacquisition of the 'Goldheart' brand with 4 additional retail outlets also
contributed positively to the group.
On a quarterly basis, 4Q revenue wasrelatively flat at RM137.1m compared to previous quarter's RM135.3m.
PBT of RM10.7% was however 27% lowerQoQ, impacted by fluctuation in gold prices. On a yearly basis, 4Q results weregenerally better than the corresponding quarter of last year. Revenue surged46% YoY and net profit rose 25% YoY to RM6.2m from RM5.0m a year ago.
Fair Value of RM1.10 Gold prices fluctuatedand peaked at USD1,900.23/oz on 5 September 2011 before it fell to as low asUSD1,545.97/oz on 29 December 2011. It then picked up to close to USD1,770/ozrecently. Tomei is
undervalued, compared to the gold pricemovements (Figure 1). We have introduced our FY13 forecast and are
maintaining our BUY recommendationon Tomei with a fair value of RM1.16.
Source: Jupiter Securities
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This book is the result of the author's many years of experience and observation throughout his 26 years in the stockbroking industry. It was written for general public to learn to invest based on facts and not on fantasies or hearsay....
