Thursday, 28 August 2014

YOCB: A Dilemma...

YOCB FY14Q4 Financial Result

YOCB (RM mil) FY14Q4 FY14Q3 FY14Q2 FY14Q1 FY13Q4
Revenue 53.5 47.2 50.7 46.5 40.6
PBT 2.4 7.8 9.8 7.1 5.2
PBT% 4.5 16.5 19.3 15.3 12.8
PAT 2.0 5.9 6.9 5.2 3.9






Total Equity 153.0 154.2 148.3 144.6 139.3
Total Assets 196.2 195.6 195.6 178.9 177.9
Trade Receivables 52.1 49.7 56.5 41.1 40.0
Inventories 65.8 69.2 68.6 62.3 57.2
Cash 35.0 32.6 31.8 36.4 41.4






Total Liabilities 43.2 41.4 47.3 34.3 38.6
Trade Payables 14.6 8.2 14.0 8.0 11.6
ST Borrowings 25.9 29.0 29.0 23.2 24.1
LT Borrowings 0.0 0.0 0.0 0.0 0.0






Net Cash Flow -6.4 -8.7 -9.6 -5.0 11.5
Operation 4.7 -0.8 -10.9 -0.7 12.6
Investment -6.4 -6.4 -0.3 -0.2 -2.0
Financing -4.6 -1.6 1.7 -4.1 0.9






EPS 1.24 3.68 4.34 3.27 2.44
NAS 0.96 0.96 0.93 0.90 0.87
Net D/E Ratio Net Cash Net Cash Net Cash Net Cash Net Cash


For YOCB's latest FY14Q4 results, there are 2 surprises, one positive & one negative.

The negative surprise is PBT crashed 69% & 54% both QoQ & YoY respectively to just RM2.4mil. This almost certainly means the share price might crash too.

The positive surprise is quarterly revenue reaches all-time high at RM53.5mil, despite the fact that Q4 is its weakest quarter traditionally.

If the profit falls like this because of less sales made, then it is a yellow flag and most probably I will sell.

If the profit falls but sales does not fall but instead rise to a record high, then it is a dilemma...




From YOCB super simple financial report, it just mentions that the lower profit in current quarter is due to higher operating cost, accruals & provision made for certain expenses. There is no breakdown of those expenses.

In this case I would like to know the gross margin but it is not available. Could it be due to some one-off expenses?

On the other hand, higher revenue is due to higher consignment, boutique and export sales, as well as fair & pre-Hari Raya sales.

This year Hari Raya falls on 28th & 29th July, which is only 10 days earlier than last year's 8th & 9th August. Nevertheless, FY13Q4 & FY14Q1 were its two weakest quarters in term of both revenue and profit.


YOCB Segmental Results (FY14 vs FY13)
YOCB (RM mil) FY14 Rev FY13 Rev FY14 PBT FY13 PBT
Investment 0 0 6.4 4.8
Design & Manufacturing 33.2 29.0 4.9 5.7
Retailing 31.0 26.9 4.3 2.6
Distribution & Trading 133.8 122.7 17.0 18.2


From the analysis of segmental reporting, all 3 main business segments register increasing revenue for FY14. However, PBT of design & manufacturing and distribution & trading segments fall compared to FY13, especially in FY14Q4.

Net cash flow enters negative territory this year, mainly due to investment for future expansion, as well as increasing inventories & receivables. The increasing working capital part does raise a bit of concern earlier but I think it is still manageable at the moment.

Cash & equivalent increases RM2.4mil to RM35mil while borrowing drops RM3.1mil to RM25.9mil.

Overall in FY14, revenue grows 11% but PATAMI falls 1%. ROE falls slightly to 13.1%.


YOCB Historical Financial Results
YOCB (RM mil) FY14 FY13 FY12 FY11 FY10
Revenue 197.9 178.1 153.9 141.0 127.5
Revenue growth % 11.1 15.7 9.1 10.6
PBT 27.2 27.4 23.5 25.2 21.1
PBT% -0.7 16.6 -6.7 19.4
PAT 20.0 20.2 17.3 18.3 15.1
PAT growth % -1.0 16.8 -5.0 21.2






EPS 12.53 12.65 10.8 15.24 15.5
ROE 13.1 14.5




It is great to note that YOCB's revenue is in an uninterrupted increasing trend since listed in FY2010. However, net profit did take a slight dip in FY12 & latest, in FY14. 

EPS for FY14 is 12.5sen, so my own target price will be revised downward to RM1.25.

YOCB has declared a second interim single tier dividend of 2sen, which makes it total 4sen for FY14 which is similar to previous year.

This represents a 32% payout ratio and 3.4% dividend yield at share price of RM1.18.

On the prospect of FY15, the management expects a satisfactory growth in its financial performance, and they always mention this in their financial report.

I'm still undecided whether to keep or sell YOCB. Since it only makes up a small percentage of my portfolio, it is unwise to sell partially. Perhaps I need to wait for another 3 months for next quarter's result. 

Anyway, how will other investors react towards YOCB's latest result?

Wednesday, 27 August 2014

Inari: Ends FY14 With A WOW

Inari FY14Q4 Financial Results

INARI FY14Q4 FY14Q3 FY14Q2 FY14Q1 FY13Q4
Revenue 223.9 191.8 186.6 191.3 67.6
PBT 31.4 27.2 26.6 22.1 13.5
PBT% 14.0 14.2 14.3 11.6 20.0
PAT 30.8 25.0 24.4 21.0 13.1






Total Equity 260.2 231.1 202.2 176.8 153.4
Total Assets 487.5 461.4 438.8 406.2 366.4
Trade Receivables 137.3 131.8 123.5 121.1 93.0
Inventories 37.8 137.7 126.2 107.4 105.5
Cash 65.3 53.2 60.0 48.9 44.6






Total Liabilities 226.9 231.1 236.9 230.0 213.8
Trade Payables 120.0 118.4 131.2 138.7 120.2
ST Borrowings 36.4 33.0 26.2 19.6 20.4
LT Borrowings 18.6 15.8 16.4 17.8 10.3






Net Cash Flow 20.9 8.8 15.3 4.3 3.8
Operation 41.2 12.4 11.5 7.2 86.3
Investment -43.4 -30.4 -14.5 -9.6 -112.2
Financing 23.0 26.9 18.4 6.8 29.7






EPS 6.23 5.19 5.31 4.70 3.69
NTA 0.46


0.35
Net D/E Ratio Net cash Net cash Net cash Net cash Net cash


As expected, Inari has just released its best ever quarterly result in which revenue & PAT improve 16.7% & 23.2% respectively QoQ.

It is mentioned that if not because of ESOS charge, PBT of FY14Q4 & FY14Q3 will be RM2.0mil & RM2.1mil more.

Overall it is a great ending to its FY14. Looking ahead of FY15, the management "looks forward to improving on its current level of performance in the EMS industry".

Because of the consolidation of Amertron, FY14's revenue surges 229% to RM793.7 compared to FY13. At the same time, PATAMI also grows impressively at 141% to RM101.3mil, slightly above my prediction of RM95mil.

It still keeps its net cash position despite aggressive CAPEX, thanks to good cash flow from operation. FY14's ROE stands at a remarkable 38.9%.


INARI (RM mil) FY14 FY13 FY12 FY11
Revenue 793.7 241.1 180.8 119.6
Revenue growth % 229.2 33.3 51.2
PBT 107.2 43.3 20.3 20.5
PBT% 13.5 17.9 11.2 17.1
PAT 101.3 42.0 19.3 18.8
PAT growth % 141.2 117.6 2.7





EPS 21.42 12.32 6.06 11.21
ROE                         
38.9
27.4 23.3 41.4




Inari has declared a fourth & final interim single tier dividend of 1.8sen for FY14. There is no special dividend this time so this quarterly dividend is actually lower QoQ (2.0sen) & YoY (1.9sen).

Overall 6.8sen for FY14 represents about 40% payout, with a yield of 2.1% at share price of RM3.23.

It has recently purchased a 5.05-acre leasehold land in Batu Kawan and a 2-storey 166k sq ft factory on a 5.5-acre leasehold land in Bayan Lepas for business expansion. So it should not give out too much as dividend.


 (sen) FY14 FY13 FY12
1st 1.1 (0.4) 0.8 0.6
2nd 1.1 (0.4) 0.9 0.6
3rd 1.2 (0.8) 0.9 0.8
4th 1.8 1.0 (0.9) 0.8


At RM101.3mil, Inari's EPS for FY14 is 17.8sen with a PE ratio of 18.1x.

As it is still in an expansion mode, I think it can achieve better performance in FY15, perhaps RM120mil net profit. 

Base on current total shares of 570mil, projected FY15 EPS will be 21.1sen, with target price of RM3.16 base on PE ratio of 15x.

Even though current share price is above my target price, I will not sell Inari at this moment as it has great potential for growth. I feel that the excitement does not stop here.





Thursday, 21 August 2014

Matrix: Hope For Better Second Half

Matrix FY14Q2 Financial Result

MATRIX FY14Q2 FY14Q1 FY13Q4 FY13Q3 FY13Q2
Revenue 163.7 134.7 144.3 127.4 147.3
PBT 58.6 54.0 56.4 48.7 40.6
PBT% 35.8 40.1 39.1 38.2 27.6
PATAMI 42.4 38.6 40.7 36.2 30.0






Res & Com Prop %

74.1 66.7 76.0
Industrial Prop %

20.8 27.8 21.0
Industrial Land %

5.1 5.5 3.0






Total Equity 613.5 582.0 552.4 540.1 518.3
Total Assets 944.5 964.5 900.5 862.8 793.0
Trade Receivables 160.0 144.3 140.8 161.5 118.1
Prop dev cost 524.4 523.5 443.8 362.4 400.0
Inventories 0.7 0.7 1.6 1.4 2.6
Cash -OD 29.4 96.0 83.8 211.2 206.5






Total Liabilities 331.1 382.5 348.1 322.7 274.7
Trade Payables 253.7 299.3 245.7 229.5 198.3
ST Borrowings 32.2 34.4 35.5 36.7 8.8
LT Borrowings 1.5 13.2 15.3 15.5 16.1






Net Cash Flow -39.4 27.2 53.4 180.8 176.1
Operation 68.8 85.6 39.7 120.7 65.2
Investment -55.7 -29.4 -69.2 -37.7 -17.0
Financing -52.5 -29.0 82.9 97.8 127.9






EPS 14.00 12.80 13.50 12.10 13.10
NAS 2.02 1.92 1.83 1.80 1.73
D/E Ratio 0.01 Net cash Net cash Net Cash Net cash


Matrix has achieved its best ever quarterly result since listed in May 2013. Compared QoQ, revenue up 21.5% and PATAMI improves 9.8%. 

Overall first half's PATAMI at RM81mil is 6.6% better than previous year's corresponding period even though revenue takes a slight dip due to less land sales.

Total sales in 1HFY14 are only RM291mil with RM18.9mil of it comes from industrial land sales. Matrix has launched RM409mil worth of projects in the first half, with a higher new target launch of RM819mil in FY14. It will launch another RM410mil new projects in 2HFY14.

If we compare to overall sales of RM788mil in FY13, current sales level is quite discouraging. However, it is expected to pick up in 2HFY14 due to more land sales and decent response to its recent launch in Bandar Sri Sendayan.

Unbilled sales of RM434.7mil at mid-FY14 is slightly lower than RM440.8mil 3 months ago.

For its balance sheet, free cash level (minus bank overdraft) falls substantially to only RM29.4mil, mainly due to land purchase & repayment of loan, apart from the hefty dividend paid to shareholders. Anyway, cash flow from operation remains healthy.

       Sendayan Green Park


Matrix declares a second interim single tier dividend of 3.75sen, making it 8.75sen for FY14 so far. 

This 3.75sen per share looks lower compared to 5sen first interim dividend for FY14 and 5.25sen (after tax) in the same period last year. If adjusted to recent 1:2 bonus issue, this 3.75sen will be equivalent to 5.625 sen before bonus issue.

I would expect a total 17.5sen dividend for FY14, base on 50% payout ratio from guesstimated FY14 PATAMI of RM160mil. 

The first 2 interim dividends are at 7.08sen (1st dividend adjusted to 3.33sen), which means there is still 10.4sen to go. This makes its dividend yield at 5.5% at current share price of RM3.20.

If it pays out only 40% which is its minimum payout, then overall dividend will be 14sen and it is still about 7sen to go. Dividend yield is still at a good 4.4%.

At this guesstimated earning level, projected EPS for FY14 will be 35sen. So my target price for Matrix is RM3.50 base on PE ratio of 10x.