Art of Investments


Publish date: Mon, 30 Aug 2021, 11:04 AM

This stock started to perform very well since the 2nd quarter of 2020 when it changed its marketing strategy to take advantage of the e-commerce boom. But last Friday, it reported its 2Q21 results which nearly made me fall off my chair.

The company is Khind Holdings.

Everyone knows what Khind is. It is a manufacturer of electrical and household appliances. 

In 2Q20, Khind started to see their change in strategy bearing fruits. Here is a screenshot of what they said in their prospects section of their quarterly results report:


In that quarter, they reported an EPS of 10.2sen! In the next quarter, Khind reported an EPS of 14.5sen and in 4Q20, they reported an EPS of 15.8sen and declared a dividend of 10sen! The share price shot up to RM4.30 when this happened. Last Friday, Khind reported a mind-blowing EPS of 20.8sen, the highest in their history. Obviously their e-commerce marketing strategy has started to generate very handsome returns since they do not go through the middleman but instead sell directly to consumers. Also, there was only one major e-commerce sales event per year previously and that is 11.11. For the past year, you can see that it has become 12 major sales events on e-commerce sites and that is 1.1, 2.2, 3.3 and so on. This has definitely benefited Khind in a very big way. Here is a screenshot of Khind's historical performance:


How to value Khind?

It is very simple. The closest comparable is Panasonic Malaysia. Panasonic Malaysia trades at a PE ratio of 14x. If we were to annualise Khind's latest quarter's EPS of 20.8sen, their annual EPS would be 83.2sen. At 14x PE, Khind would be valued at RM11.65! Let's forget about 14x and just use 10x. It will still be worth RM8.32 at 10x PE.

Khind also gives handsome dividends and at the level of profits they are earning now, they should have no problem giving 15-20sen dividend this year. At a share price of RM3.70 now, Khind is the most undervalued consumer gem we have ever seen in our lives. It is a matter of time before the the share price reflects the fundamentals of the company. 


UPDATE: I'm so happy for everyone who read my article, bought Khind and are making handsome profits now. As always, I'm only interested in sharing genuinely good ideas - which is why you will only see me post less than 10 recommendations a year. It is called a gem for a reason - not many exist. Unlike some unsrupulous people who are out to try to pump and dump, I don't do such things. At the moment, Khind is RM4.30 and for those who have decent profits, don't be greedy and take some profit (not all) if you want. Remember that at this price, Khind has gone up by 40% over 2 days and correction could happen.

UPDATE 2: RM4.80 as at 10.45am. Up by 57% in 2 days. Again, for those asking, don't be greedy and realise some profit.


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