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Stock Review – HIGHTEC(7033) - Klse Value
Tuesday, 24 November 2015
Key Value Investor Criteria: -
|
Description
|
Value
|
Criteria
|
Point
|
|
Price to Tangible Book Ratio
|
0.57*
|
< 1
|
5/5
|
|
Stock Valuation
|
CAPM => 2.94%
Return (2008-2014) =>2.12 %
Overvalue by 0.82%
|
CAPM < Return
|
0/5
|
|
Return on Asset
|
2.16*
|
> 0
|
3/5
|
|
Return on Common Equity
|
8.56*
|
> 0
|
5/5
|
|
Quick Ratio
|
4.67*
|
>1
|
4/5
|
|
Long term Debt / Total Capital
|
8.35*
|
<50%
|
5/5
|
|
Continue Dividend over Past 10 Years / Since Inception
|
Yes
|
Yes
|
2/2
|
|
Cash From Operation
|
Positive > 5 years
|
Positive
|
5/5
|
|
Total Point
|
|
|
29/37
|
Note:
* Data obtain from Bursa Marketplace on 14/11/2015
* To understand more about the financial analysis ratio kindly visit my hubpages.
By scoring 29/37 (78.38%), we will look into the annual report and the latest quarterly report of HIGHTEC before making the decision to buy the stock.
Company Profile
HIGHTEC has four major operating segment which are:
- Manufacturing and Trading (23.44% of 2014 profit)
- Investment (72.56% of 2014 profit)
- Plantation (-4.12% of 2014 profit)
- Joint Property Developer (8.12% of 2014 profit)
1) Manufacture and Trading
HIGHTEC start with manufacturing precision engineering plastic mound and precision metal product in 1976 under the name of Hup Lee Enginnering Work. HIGHTEC now operating in three location, two in Sungai Buloh Malaysia and one in Thailand.
HIGHTEC has serves into various industries such as Automotive, Electrical, Industrial and Medical. HIGHTEC has their product export to various country such as Australia, China, Indonesia, Japan, UK, US and etc.
2) Investment
This division is where HIGHTEC got most of their profit from in 2014 (72.56%). This division rent out factories and warehouse to others.
HIGHTEC has five number of factory units in Taman Mayang and one number of warehouse in Shah Alam are currently rented out.
3) Plantation
HIGHTEC start into palm oil plantation in mid 2013 where they signed rental agreement with various native to convert the land in Bintulu Sarawak into oil palm plantation.
The rental agreement allows HIGHTEC to use the land rental free for three and the half year from execution of the rental agreement which mean until 2017 for 60 years.
Some of the oil palm tree starts bearing fruits since first half of 2015.
4) Joint Property Developer
In 2014, HIGHTEC has 3 plot of lands held for property development which are one in Ipoh and two in Kuala Selangor.
In 2014, this division just got the revenue from the 66 units of houses sold.
|
PROS:
|
|
è The depreciation of Ringgit Malaysia might increase the profit of HIGHTEC due to foreign currency exchange gain.
è Rent our factory units and warehouse space will be passive income for HIGHTEC which the management able to use to cover the operating cost of HIGHTEC.
è Some of the oil palm tree start bearing fruit since first half of 2015.
|
|
CONS:
|
|
è The Automative industry may slowdown next year which might affect the revenue of HIGHTEC
|
Financial Statement
By looking at the quarterly report for the period ending 31 JULY 2015 HIGHTEC has low amount of borrowing RM 7,224,000 compared to their cash equivalent in hand which is RM 15,070,000. Besides that the operating cash flow also increase compare to the previous year.
|
PROS:
|
|
è HIGHTEC had low amount of borrowing.
è Increase operating cash flow.
|
Conclusion
Disclaimer
For other stock reviews and my personal holding detail kindly click here
http://ivkls.blogspot.my/2015/11/stock-review-hightec7033.html
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Post removed.Why?
2015-11-28 01:24