It usually means that the company has hedged their USD in lower rate (say 4.2, but the rate went to 4.4).
In other words, the company has put a stone on their own leg. Meaning too strong USD is actually not good due to their bad hedging decision. If 4.2 is their hedged position, they will have forex gain when the rate stays below 4.2.
Whether strong/weak USD is a good/bad to the company, you need to know the their hedged price and the amount they hedged (% of hedged value agaisnt their sales).
Quite alot of export companies hedged at wrong position causing forex loss. Example Harta (Hedged 3,80-4.0), Mpi, etc.
Window of Opportunity for Exporter Stocks. Regional Morning News by UOB Kay Hian 10th March 2016. Target price for JCY International Bhd is 77.8 sen. Cash rich JCY International offers attractive dividend yields of 6.3%.
Recent selldown could have been overdone. JCY’s share price has fallen 21% ytd amid the latest wave of selling in export-oriented companies. The intense selling momentum was largely driven by the strengthening of the ringgit to RM4.10/US$ (ytd average: RM4.24/US$). We believe the sell-down is overdone as UOB Global Economics & Markets Research’s latest forecasts suggest the ringgit would still hover around RM4.10-4.20/US$ through to 2Q16. We keep our earnings forecasts unchanged but note that every 1% weakening in the US$ (base: RM4.10/US$) would reduce JCY’s bottom line by 4%,
Attractive for yield seekers; potential special dividend? With a strong net cash of RM322m (or 16sen/share) as at end-Dec 15, and the recent no-go decision for a major M&A after due diligence, we do not discount the possibility that JCY would dish out a special dividend in the near future. Assuming a special dividend of one sen per share and the quarterly dividend remain at 1.25 sen per share, this would mean a full-year dividend of 6 sen/share, or a yield of 8.9% (vs our forecast of 6.2% based on a 50% payout). We believe JCY’s generous dividend payout is sustainable, given its strong capability in generating operating cash flow (1QFY16: RM127m, FY15: RM212m, FY14: RM140m) and no huge capex requirement (we expect capex of RM50m-60m p.a. in FY16-17).
Come on guys please be serious . Life is short so play it hard . Must be patient on this counter . If joking hear and there nothing i will get . I learn so many things from Uncle Koon Yew Yin's blog so thank you so much to uncle Koon and he get nothing by helping us how to make money on shares market . Like what he always said , he will get nothing when he is not around this world . Thank you .
Have been looking for any good news to spur up share price long enought. Can it reach 1.00 this time around? I doubt so. I MAY not wait any longer after experiencing few times of unpleasant roller coastal rides.
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This book is the result of the author's many years of experience and observation throughout his 26 years in the stockbroking industry. It was written for general public to learn to invest based on facts and not on fantasies or hearsay....
914601117
541 posts
Posted by 914601117 > 2016-03-04 16:01 | Report Abuse
Who is the biggest customer of JCY?