The recent natural disasters such as wild fires in the US, hurricanes in the US and Caribbean, have caused large economic losses and human casualties. While some are still fighting to contain the damages, enormous recovery efforts are actively on its way to repair and rebuild infrastructures, buildings and homes.

Tong Herr Resources Berhad’s (Tongher) bolts, nuts and screws could see higher demands from these countries, as rebuilding efforts continue, since US is currently contributing roughly 16% of it’s total sales in financial year 2016. Logically, Tongher is likely to benefit from the post disasters rebuilding effort and potentially lead to a spike in both export sales and stock prices.

Year to date, the share price of Tongher has increased by more than 85% due to better performance in core business and completion of divestment in loss making Vietnam subsidiary. In fact, up to 1^st half of current financial year, Tongher recorded equivalent to 63% of previous full year revenue and profits. If current trends continue, Tongher should report much better performance in this financial year.

Tongher is basically a net cash company. Based on its recent 2^nd Quarter financial report, Tongher has about RM153mil of cash & cash equivalent, while total debts stood at about RM91mil. With its strong free cashflow position and Board’s commitment to pare down borrowings, Tongher shall soon a debt free company.

Over the years, Tongher is well known for its generous dividend payout. In previous financial year, Tongher distributed a total of 30 cents, translated to over 8% yield based on yesterday’s closing price at RM3.73. Based on current 1^st half good performance and strong anticipation in higher export demand to US in following quarters, Tongher shall see even higher dividend payout to reward it’s shareholders.

Tongher has history of announcing interim dividend in end November. With more optimism in the horizon, no wonder investors are beating war drum to become legitimate shareholders of this world largest exporter of bolts and fasteners before more good news surfaced.

#SimplyMyStock #Tongher