IPOH-based Wellcall manufactures industrial rubber hoses used across a broad swath of the economy — for air and water, welding and gas, oil and fuel, automobile, shipbuilding as well as food & beverage sectors.
Earnings grew steadily for the past four years. In FY Sept 2013, Wellcall saw lower revenue — as customers held back purchases in anticipation of lower prices — but still managed to grow profits, thanks to lower rubber costs. In the latest FY14, both sales and net profit rose — by 11.3% to RM146.4 million and 19.1% to RM29.4 million, respectively. Net margin increased from 11% in FY11 to over 20% in FY14.
The current regime of low commodity prices and weak ringgit bodes well for Wellcall. Almost 91% of the company’s sales are exported, to all over the world.
The ringgit is expected to stay weak, now at the lowest level against the US dollar since mid-2009.
Meanwhile, bulk latex prices have fallen from 536 sen/kg at end-2013 to as low as 350 sen/kg in December 2014 before recovering slightly, on expectations of lower output due to massive flooding. Nevertheless, competition from synthetic rubber — whose prices are correlated to oil — will keep a lid on the recovery.
The Edge Research rates Wellcall a maximum Fundamental score of 3 and 2.1 out of 3 for Valuation.
The company is sitting on net cash of RM41 million, which together with steady operating cashflow will continue to support a generous dividend payout.
Indeed, annual dividends paid have been on a gradual uptrend. Dividend payout was a high 94% in FY14, well above its minimum 50% payout policy. Shareholders would have earned a net yield of 5.32% based on current share price of RM1.56.
ROE has been rising steadily, from 20% in FY11 to over 35% currently.
My trader also reveal that Dr Yu Kuan Chon has interest to accumulate. I was told of good div yield and thin liquidity. Similar to Shangri-la before Dr Yu acquired substantial stake. Shang increased from RM2 to RM7 today and who cares about its PE. As long as management is sound.
duitkwsp, means big shark Mondrian still keep buying recently. SO we fong sam to buy & keep, a vote of confidence. Abt mondrian.http://www.mondrian.com/business-overview/background.html Established 1990 100% employee owned 51 investment professionals 173 employees in two locations: London, UK and Philadelphia, US
Collin, nobody is saying bad words abt shareholders. I meant company quality which is the fact. Everyone has its own investment philosophy, some look for quality assets - competitive edge, some look for fast money.
Don't be too optimize on Wellcal as oil price drop may affect producers to reduce production or stop production. As we know North America is the largest customer, definitely it will affected......
New IPO: The onshore and offshore support services provider for the O&G industry, Steel Hawk Bhd aims to list on the Ace Market!
MQ Trader 3109 views | 3 d ago
0:17
New IPO: The largest mini-market player and a leading groceries retailer in Malaysia, 99 Speed Mart Retail Holdings Bhd aims to list on the Main Market!
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....
ntygis
74 posts
Posted by ntygis > 2014-12-23 23:00 | Report Abuse
慢慢累积增加股息。好股。