Agreed, cash surged to RM1.09/share. If we buy now at RM1.41 means we are using RM0.32/share to buy a business that able to generate annual EPS of RM0.27/share (assume annual PAT of RM30mil). Amazing cheap and we haven't take into account of the generous dividends yet.
Trader = cut loss first and plan to buy at lower price hoping for a rebound Condo retailer = hold and pray for rebound Institutional fund = already cut major loss at RM0.70 and laughed by others previously Net profit investor = holding some and happy to buy at lower price to average down Cash flow investor = never invest in this company due to negative free cash flow every year
Who will be the final winner? Let's see this interesting drama.
1) production capacity fully utilized, 2) thailand expansion is for equipment which expected to increase 0.75x of existing capacity, 3) expect aerospace to recover pending vaccination progress, 4) total employees were vaccinated 60+% (Malaysia) and 80+% (Singapore), 5) able to pass additional costs to customers arising from hike in raw materials and freight prices, 6) supply test equipments to front end customers as well, 7) not affected by shortage of foreign labour and lockdown, 8) all customer pay on time with no delay during pandemic, 9) inventories increased 30+% yoy is for equipment business, 10) aerospace orderbook currently worth RM2.0+ billion with 10 years horizon, 11) not supplying products to LAM Research, 12) will expose to EV or battery if their customers divert into it.
Whatever auditor reports issued, we know for sure its lack of cash since IPO. They will definitely raise money from shareholders via right issue, loan stocks & etc as banks and private investors will stay away. Eventually enlarged of issued capital from above corporate exercise will dilute the so called "earnings" that without cash collection resulted share price to plummet!
AGM highlights: 1) domestic sales are very encouraging but cannot confirm the effect of MCO 3.0 which may affect it temporarily, 2) export sales are also good but due to rising of ocean freight cost, some customers may delay the import for awhile, 3) sales derived from Cuckoo just started at end of March 2021 and target sale is 10k-14k mattresses in 2021, 4) even with rising of raw material costs, leesk able to pass it to customers, 5) acquired automation machines in 2020 which can increase capacity but pending foreign technician to fly over for commissioning, 6) bought 8 units of dormitories for foreign workers to comply ESG, 7) production is running at full capacity but MCO 3.0 limited 60% of workers may affect it in short term.
Based on cimb report on 11/12/2020, from collaboration with cuckoo, leesk anticipates to generate revenue of RM100m for 3 years which translated to RM33m a year, so additional PAT will be around RM2.6m (8% margin). If compared to previous annual PAT of RM6m - RM8m, it's an increased of 32% - 43% per annum!