Perstima's profit is guaranteed by controlled raw material cost pricing from Japan, and the management maintains a reasonable profit margin to keep everyone happy including its largest shareholders from Japan, its main customers of tin can makers, the government and the industry at large. It has a monopolistic power in its industry in Malaysia.
One major factor though all shareholders should bear in mind is a potentially existential threat imposed by China and Korea exporters into Malaysia. Perstima is very efficient in its operation but it also depends on anti-dumping taxes imposed on imports from China and Korea. At one time, the main customers were up in arms wanting to set up its own plant together with suppliers from China, thereby stopping buying from Perstima, when Perstima raised its selling price. The customers want government to scrap the anti-dumping taxes on Korean and Chinese imports.
I would expect some upside from its operation in Vietnam but so far it falls a bit short of expectation.
Perstima has been around for very long and the price did not shoot up to RM8 for the reasons mentioned above. It is a good or even top dividend stock as long as the status quo remains vis-à-vis the anti-dumping issue with Chinese and Korean import into Malaysia.
This article is written merely for sharing of investment knowledge and opinion. It does not constitute a buy, or sell call for any stock. Please do your homework before acting. DON FOLLOW BLINDLY without TRUTHSEEKING first LOL
A good dividend stock can give you more than 7% dividend yearly and the beauty is every quarter the company will issue dividend to shareholders. That mean you will be expecting to receive at least 4 times dividend every year.
Dividend stock lovers will like to receive dividend every quarter like collecting property rental.
You should be able to find one in Bursa if you do your homework.
In the KLSE context, try look for growing stock that can give you at least 20% to 50% growth within 3 to 6 months. I guess these are all investors are try to look for :)
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Thanks for the analysis on this good dividend stock. But I agree with sense maker that its superior numbers are the result of its monopoly in Malaysia. As it is, there is a groundswell of discontent from can makers accusing perstima of over pricing its products. There are talks about ganging up to set up a plant to break its monopolistic hold but so far nothing came out of it after 2 years. Perstima is also protected by the government's anti dumping duties which can change very quickly.
Posted by digiuser016 > Nov 2, 2015 01:48 PM | Report Abuse
hi kcchong how do you determine the growth rate for this company ? thank you
The growth rate determination is an art because it is about forecasting the future. If you are interested to invest in a stock, use conservative assumptions, and if you still find a wide margin of safety, it is probably a good investment.
Dear KC, I'm read about your sharing about the DDM or intrinsic value. I try to use count the P vga but couldn't get the amount of RM3 or 300sen. Shall I put r&g, value to in percentage. Kindly advise.
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