Sifu your head.

Sifu sifu sifu

k la, gonna do revision jo exam at 3

Ok... happy Chap Go May.



Got to go kai kai...

Happy trading...

Yeah they have high depreciation... low (almost non existent) capex. Thier FCF is actually 2x thier EPS...

This post has been edited by gark: Feb 14 2014, 10:39 AM

exam ? what paper u take?

psychology later... hehe...learn to think like a shark

wao, go kai kai with lamby?

I salute you when you know when to take profit. Take for eg that wood u took profit.

gark, free ah?

ok lah.. now friday prayers break...why?

you got pray wan meh?

any opinion on 9326?

no pray lah... just that office got 2 hour lunch break on friday..

ok i look see look see from FA perspective first ah...

So good meh get 2 hours lunch break

oh...

my office just declared 4.30pm can go off .... boss wants to celebrate valentine's day

You work in GLC and see... some even 2.5 hours

and must wear batik to work some more.. on fridays...

This post has been edited by gark: Feb 14 2014, 12:27 PM

Wa lau. i also wan to join yr comp.

Yr boss made so much money from Bursa..........

Ok 9326

Company manufacturers aluminum extrusions, anodizing and powder coating of aluminum.

Steady growing revenue business, but profit has been spotty, but got some improvement in profit from 2011-2013. profit have high reliance of raw aluminum ingot price as it is a feedstock for the company. To understand this we have to look at aluminum prices as the graph below. The steady rise in profit from 2011 is primary due to reduction of aluminum price since the peak at 2011.



However spot price for aluminum has been steadily rising at early February from 72 cent/lb to 76 cent/lb, but still a 40% below the peak of $1.25/lb.

If the aluminum price continues on its price reducing trajectory then it will benefit 9326. However all aluminum prices are transacted in USD in which it depends if the company can pass on the differences due to the recent devaluation of the currency. Sales are primary in Malaysia ( 75%) & Singapore ( 20%) while 100% of raw materials are priced in USD. Most of the sales are towards property construction companies and depend heavily on the property demand.

For the financials, the company is healthy, with some cash and some loan, however the company is not a net cash company. The PE ratio is more or less fair at 8x, unless the company can show further growth, then the PE ratio will be around there. The current weakness in the share price is due to no dividends, hence a risk for holding the company long term having no income while waiting for the price to appreciate.

Gross and net margins of 6% and 5% is not particularly attractive signifying the company does not have good pricing power for it's products probably due to high competition. Free cash flow is also ok at 1:1 ratio to EPS, which is fair. EV/Ebitda of the company is also around 8x which is also fair.

I would rate the company prospects as slightly undervalue, but the share price will be slow moving and highly reliant on the international aluminum prices. If there is a continuous fall in aluminum prices and continuous demand for property, I believe the earning margins of this company can improve significantly, also if the company decide to pay a decent dividend which it is capable of from the healthy free cash flows. But the opposite is also true, so it is a risk to be seen.

This post has been edited by gark: Feb 14 2014, 12:56 PM

I am amased... you can come out with this within < 30 minutes.

BTW, where you get the research besides the financial data?

Too much practice...

Read the Q report, annual report, analyst report, 5 years financial, look at the graph, read the website etc etc...

This post has been edited by gark: Feb 14 2014, 01:27 PM