HEIM – Fundamental Analysis (20 Jul 2016)

Excel – Download the analysis file

Latest Financial Report – Q4 2016 Financial Report (18 Jul 2016)

FY16 Q4 Results Highlight:

  • Q4FY16 versus Q4FY15
    • Revenue grew 15.6% from RM398m to RM460m due to as the strong sales led by Chinese New Year festival in 3QFY16 was sustained by the event of UEFA Euro 2016 in 4QFY16.
    • Profit before tax increased 21.5% from RM66m to RM80m.
    • Net profit increased 38.3% from RM44m to RM61m.
    • Earnings per share increased from 14.57 sen to 20.15 sen.
  • 12MFY16 versus 12MFY15
    • Revenue grew 5.7% from RM1.75b to RM1.85b.
    • Profit before tax for the period increased 20.4% from RM292m to RM352m.
    • Net profit increased 24% from RM214m to RM266m.
    • Earnings per share increased from 70.90 sen to 87.94 sen.
    • The improvement is mainly driven by higher sales and favourable product mix, while the enhancement efforts by the authorities to tackle contrabands have also helped.

Going Forward:

  • HEIM management (and I) remains confident that it will deliver commendable results for FY16 even if there are many uncertainties in the global economy.
  • In my opinion, fair value of HEIM is from 18 to 19 (Uncertainty Risk: HIGH).
  • I will continue to hold, but will not accumulate HEIM for the time being. Let it ride!

At the time of writing, I owned shares of HEIM.

DIGI – Fundamental Analysis (13 Jul 2016)

Excel – Download the analysis file

Latest Financial Report – Q2 2016 Financial Report (11 Jul 2016) and Management Discussion And Analysis 2Q 2016

FY16 Q2 Results Highlight:

  • DIGI’s net profit for 2QFY16 fall 9.4% to RM420.61m, or 0.0541 eps (1QFY15: RM464.36m, 0.0597 eps), due to unrealised foreign exchange and derivatives losses of RM12.72 million. Its EBITDA fell 6.7% YoY to RM735m in 2QFY16, while its Ebitda margin slid 1.3 percentage points to 44%.
  • Revenue also came in 3.9% lower at RM1.66b, from RM1.72n in 2QFY15.
  • For 1HFY16, DIGI posted a 13.1% decline in net profit to RM819.65m or 0.1054 eps, from RM943.58m or 0.1214 eps in 1HFY15, due to aggressive high-speed data quota bundling and heavy discounts. Revenue stood at RM3.31b, down 5.7% from RM3.51b.
  • Its service revenue dropped 2% y-o-y to RM1.56b, even though its active Internet subscribers rose to eight million along an increase in smartphone penetration to 62%, while 4G LTE subscribers grew to 3.3m, from 1.3m a year ago.
  • Internet revenue made up a total of 36.1% of service revenue for 2QFY16, and continued to grow as smartphone adoption rose to 62% and active Internet subscribers up to 64.5% of the total subscriber base. ARPU was steady at RM42, backed by 12.3 million subscribers.
  • Despite being challenged by the industry’s aggressive Internet quotas and heavy discounts, DIGI’s postpaid ARPU strengthened to RM82 on a larger subscriber base, while prepaid ARPU dipped marginally to RM34, on the back of relatively stable prepaid subscribers.
  • Its 4G LTE and 4G LTE-A network footprint now stands at 76% and 34% of the population nationwide respectively

 

Going Forward:

  • Management has maintained an unchanged guidance for service revenue and EBITDA (similar to 2015 levels), but revised capex intensity guidance upwards to 13-14% of service revenue, from 11-12%. Nonetheless, management has guided that there is no change in plans for network roll-outs, where the capex intensity revision is due to costing estimations.
  • In my opinion, fair value of DIGI range from 5.1 to 5.3. Uncertainty risk of fair value is MEDIUM.
  • I will continue to hold this share, and accumulate it.

At the time of writing, I owned shares of DIGI.

KMLOONG – Fundamental Analysis (4 Jul 2016)

Excel – Download the analysis file

Latest Financial – Q1 2017 Financial Report (29 Jun 2016)

FY17 Q1 Results Highlight:

  • KMLOONG recorded a higher revenue at RM177.70 million (Q1FY16: RM162.88 million) but a lower PBT at RM18.41 million (Q1FY16: RM23.23 million)
  • The revenue and net profit from plantation operations dropped by -3% and -15% YoY respectively. This was mainly caused by lower production but cushioned by better FFB price. The FFB production for Q1FY17 was 52,500 MT, +18% YoY (Q1FY16: 64,200 MT). The significant drop in production was likely caused by the El Nino phenomenon. The plantation operations did not face problem in selling its FFB production as most of the produce was supplied to mills within the Group. The average FFB price was +19% YoY.
  • Due to higher selling prices, the revenue for Q1FY17 increased by +10% YoY. However, the profit was RM8.24 million which was -25% YoY. The drop in profit was partly caused by lower OER and lower FFB intake arising from competition for crop in view of low FFB production during Q1FY17. Total CPO production for Q1FY17 was 51,400 MT, -18% YoY (Q1FY16: 62,300 MT).
  • The sale of CPO, the main product was 58,700 MT, -2% YoY (Q1FY16: 59,900 MT). The average prices of CPO was RM2,480 per MT for Q1FY17, +12% YoY.

Going Forward:

  • KMLOONG maintains high dividend yield.
  • I believe that CPO price will remain stable in 2016.
  • In FY17, an increase in FFB production from young mature area is expected but in view of the potential effects being caused by El Nino, the FFB production will be flat or slightly lower, while the CPO production could be lower, comparing to the quantity achieved in FY16.
  • In my opinion, in near term, the fair value of KMLOONG range from 3.3 to 3.5. Uncertainty risk of fair value is HIGH.
  • I will continue to hold and accumulate KMLOONG if there is a big discount.

At the time of writing, I owned shares of KMLOONG.

Crude Oil Updates – 3 Jul 2016

As a follow up of my analysis on 9 Jun 2016, looks like my analysis is still valid and intact.

Crude Oil Full0816 Future

Excel Analysis File – Enhancements

Besides couple of minor fixes and enhancements which you will hardly observe, I have made few major enhancements:

  1. LTM (Last Twelve Month) cumulative figures in the Cash Flow Statement – I have worked out a simple way to calculate LTM in the cash flow statement.Cash Flow LTM
  2. With LTM figures in cash flow, now I can calculate key ratios for LTM.Key Ratios LTM
  3. Previously, I published analysis of yearly financial results to slideshare.com in PowerPoint. The intention is to drive more traffics from slideshare.com to my blog, but apparently the traffics are not sufficient and justifiable for me to continue to do that. So, I will create a “dashboard” spreadsheet for each company I following. The maintenance overhead will be lower if compare to PowerPoint.

    HAIO-FY16Q4-Analysis

HAIO – Fundamental Analysis (11 Apr 2016)

Excel – Download Analysis File

Latest Financial – Q4 2016 Financial Report (29 Jun 2016)

FY16 Q4 Results Highlight:

  • HAIO recorded a 2016 revenue and core net profit of RM 298.1m (+24.3% yoy) and RM 36.4m (+ 22.2% yoy) respectively. This was mainly due to higher revenue generated by its MLM division, which was its main contributor (67% of revenue and 73% of operating profit).
  • HAIO’s FY16 turnover and PBT for its MLM segment increased by 46.5% yoy and 26.7% yoy to RM 135.6m and RM 28.8m respectively due to higher sales volume for most products, especially its “small ticket” items such as mineral coffee, bamboo salt, skin care and health supplements.
  • In addition, HAIO’s active measures to grow its distributor force has seen an increase of about 3,000-4,000 members/mth, which have further contributed to earnings.
  • The wholesale division however was weaker with a drop of revenue by 3.8% to RM 43.4m due to lower demand for Chinese medicine.
  • The retail division also posted a drop in revenue and PBT by 5.7% and 31.3% due to lower demand for high-end health supplements as well as poor response from the year end grand promotions for members.

Going Forward:

  • Next financial year will remain challenging in view of weakening domestic purchasing power and high costs of living, resulting consumers more cautious in spending.
  • Weakening of MYR against USD currency will increase the cost of import purchases.
  • In my opinion, fair value of HAIO is from 2.8 to 3.4 (Uncertainty Risk: from MEDIUM to HIGH) in 2 to 3 years. However, for longer term, I think its fair value could range from 4.3 to 4.7 (Uncertainty Risk: LOW)
  • I will continue to hold and accumulate HAIO as I believe that HAIO has the ability to overcome the challenges ahead.

At the time of writing, I owned shares of HAIO.

SKPETRO – Fundamental Analysis (1 Jul 2016)

Excel – Download the analysis file

Latest Financial – Q1 2017 Financial Report (28 Jun 2016)

FY17 Q1 Results Highlight:

  • SKPETRO booked a core net profit of RM147.6m in 1QFY17. Management has invalidated prevailing assumptions surrounding the group, guiding for RM7.0-7.5bn revenue and sub-30% EBITDA margin for FY17E.
    • Engineering & Construction (E&C) – 1QFY17 revenue fell to RM1,024.4m (-7% yoy; -5% qoq), in-line with negative operating leverage, and the reduction in scope of works.
    • Drilling – Segment revenue fell to RM623.3m in 1QFY17 (-19% yoy; – 12% qoq), dragged down by lower utilisation rate of the group’s drilling rigs.
    • Energy – 1Q revenue fell to RM297.1m (-29% yoy; -9% qoq), dragged down by lower production and weaker crude prices.
  • SKPETRO’s orderbook stood at RM19.8bn as at end-April 2016, of which RM4.9bn worth of works will be carried out in the remainder of FY17, RM3.9bn in FY18, and the remaining RM11.0bn from FY19 onwards.
  • SKPETRO has managed to secure jobs amounting to RM151m for two of its drilling rigs (i.e. SKD Berani, SKD Jaya). Barring any new drilling contracts, management expects eight of its sixteen drilling rigs will be stacked at end-FY17E.
  • Management has budgeted RM800m worth of capex to be incurred in FY17E. The budgeted capex are mainly spent for:
    • in-filling drilling
    • bringing the SK310 B15 Gas Field on-line.

Valuation:

  • In my opinion, fair value of SKPETRO around 2.2 (Uncertainty Risk: LOW).

Going Forward:

  • Major concerns – Low crude oil selling price, weak orderbook replenishment, further asset writedowns, and reduced drilling fleet utilisation coupled with declining daily-charter-rates.
  • I will continue to hold and accumulate SKPETRO as I believe that SKPETRO will be able to overcome the challenges ahead.

At the time of writing, I owned shares of SKPETRO.