Monday, September 2, 2013

SKP Resources : No Sign of Abating (TA)

SKP Resources
Last traded: RM0.34
TP: RM0.65
No Sign of Abating

Review
_ In line with expectations. SKP Resources’ (SKP) 1QFY14 net profit came in at 19.5% of our full-year forecast. However, we consider this to be within expectation as we have factored in capacity expansion towards late-FY14.

_ Snapping the fall in revenue. SKP managed to reverse the drop in revenue with 1QFY14 revenue increased 22.9% QoQ to RM108.3mn. PBT margin surged to 11.2% (10.5% in 4QFY13), contributing to the increase in net profit by 29.6% QoQ to RM9.1mn. According to management, the increases in revenue and profit were due to increased orders from new and existing customers.

_ Affected by minimum wage policy. YoY, the group’s 1QFY14 net profit slipped 22.7% due to the implementation of minimum wage policy in Jan-13. This has resulted in PBT margin to slide from 12.8% in 1QFY13 to 11.2%.

_ Balance sheet still solid. The group’s net cash dropped slightly to RM88.8mn (from RM92.5mn in the preceding quarter) as the trade receivable shot up by 40% to RM105.5mn. Total net asset improved 7% to RM139mn.

Impact
_ No change to our FY14-15 earnings projections.

Outlook
_ Promising 2014. We believe that SKP would secure additional orders from Dyson, thus factoring in capacity expansion in late-FY14. We understand from management that the company is currently negotiating with several land owners for land acquisition for its new plant. In addition, we expect increasing sales to come from customers like Sharp, Panasonic and Sony as well. Specifically, we expect the 2014 FIFA World Cup to boost the demand for consumer electronic like TV, which could possibly mean more business to SKP for manufacture of plastic parts and components

_ Potential dividend yield of 7.7%. Based on the company’s dividend policy of paying out 50% earnings as dividend, we project SKP to frank out 2.6sen/share for FY14, yielding 7.7%. A positive catalyst to share price is the hefty cash level of RM9.9sen/share in the company, which can be paid out as special dividend.

Valuation Maintain Buy. We maintain our target price at RM0.65/share, based on unchanged 10x CY14 EPS. Currently, the stock is trading at 5.2x CY14 PE multiple, which is undemanding given the promising earnings outlook and balance sheet strength. If we were to reduce the current trading price by the amount of net cash SKP possessed in March-2013, the effective CY14 PE will decline further to only 3.7x, suggesting the stock is undervalued. Maintain Buy.

Source/Extract/Excerpts/来源/转贴/摘录: TA-Research,
Publish date:02/09/13

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Warren E. Buffett(沃伦•巴菲特)
Be fearful when others are greedy, and be greedy when others are fearful
别人贪婪时我恐惧, 别人恐惧时我贪婪
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做自己熟悉的事,等到发现大好机会才投钱下去

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高估期间, 卖对, 不卖也对, 买是错的。
低估期间, 买对, 不买也是对, 卖是错的。

Tan Teng Boo


There’s no such thing as defensive stocks.Every stock can be defensive depending on what price you pay for it and what value you get,
冷眼(冯时能)投资概念
“买股票就是买公司的股份,买股份就是与陌生人合股做生意”。
合股做生意,则公司股份的业绩高于一切,而股票的价值决定于盈利。
价值是本,价格是末,故公司比股市重要百倍。
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1.有智慧,不如趁势
2.止损不止盈
成功者所以成功,是因为不怕失败!失败者所以失败,是失败后不再尝试!
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