I dont agree. In any business, profit margin is key. That may be so, YeeLee topline and bottomline figures grow in tandem. Additionally, there is an improvement in margin. So if before, the valuation was already at 10-11x, why should it not be now? Furthermore, the peers whose margin are equally thin is also trading at higher multiple. So the key differentiating factor for why YeeLee is undervalued is because of the poor DY. Hence, in my article, I would like to see YeeLee management to reward shareholders via increment in dividend.
As long as there is an upward movement even if it is 1 cent or 2 cents will be alright. By end of February, 2017 after the 4 QR is released, there will be catalyst to push the price up further. Yee Lee is a fundamentally strong listed company. Buy before it is too late to do so.
This afternoon closing session has been good for Yee Lee share price, moving up 3 cents instead of daily 1-2 cents. Likely, investors have discovered deep valued stock having good potential to move further in 2-3 months times.
This counter should not be trading below RM3. It is a very well managed company and Red Eagle cooking oil is expected to overtake Knife cooking oil (by Lam Soon) with the removal of the production quota. Knife is from Singapore.
I am less bullish about the company after doing some research and talking to FMCG people. The suntory deal is about RM 80m per year. Profit contribution from distributing Ribena will not be as big as Redbull. The removal of oil price subsidy is a positive move for YeeLee. But the MD had said the company will reinvest all their cooking oil profits into marketing which means the profit growth will not be that huge. I dont see a rerating coming for this company. Any share price growth has to come from profit growth at this point. Also notice that the NTA is high due to revaluation of properties. So, NTA might kind of be inflated to the best price senario.
A lot of Sifu with keen eyes and ears would have bought Yee Lee long ago before the price is reached RM2.48. OTB's recommendation wth TB at RM3.90 is not surprising as Yee Lee will register better results this year when compared with last year. Hopefully, next FY will even be better than this current year.
Yee Lee is looking good as it breaks RM2.50. Lets see if it can turn resistance to support and move towards my initial TP of RM2.68. As I highlighted this back at end 2016 with entry price of RM2.30, you all can refer to this article for refresher. Long term prospect intact as Tradeview only chose value picks http://klse.i3investor.com/blogs/tradeview/110386.jsp
I would be happy if can move towards both optimus9199 and Mr Goh TP. It would make everyone here very happy. Anyways, Tradeview Value Pick No.1 for 2017. FYI to all
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....
Gentlemen
166 posts
Posted by Gentlemen > 2016-12-09 23:27 | Report Abuse
Thank you tradeview, looking forward to read your article