Showing posts with label dlady. Show all posts
Showing posts with label dlady. Show all posts

Wednesday 9 August 2017

Consumer stocks emerge winners in 2016

Saturday, 31 December 2016

Consumer stocks emerge winners in 2016


Counters brave the storm and stand out for their resilience in earnings
FBM KLCI Top 20 Gainers
IN a year which saw the ringgit depreciate by some 10% and oil prices continued to languish, it was the evergreen consumer stocks which braved the storm and stood out for their resilience in earnings.
The top performer for the FBM KLCI was Dutch Lady Milk Industries Bhd.
Other food and beverage players such as Fraser and Neave Holdings Bhd (F&N) and Nestle (M) Bhd were also favourites with the investors, as all have benefited from the subdued commodity prices for the past two years. Collectively, their gross profit margins have widened for seven consecutive quarters from the fourth quarter of 2014 to the second quarter of 2016.
Another consumer and multi-level marketing player which made the cut was Hai-O Enterprise Bhd, which has seen improved sales from new products, higher recurring sales and an increase in monthly recruited new members.
For the second quarter ended Oct 31, Hai-O recorded 35.6% higher revenue of RM99.78mil and 78% increase in net profit of RM15.91mil.

Sole bank Public Bank Bhd made the cut, once again demonstrating its ability to generate stable profitability even when the operating environment remains challenging.
Public Bank’s net profit rose marginally by 3.1% to RM1.24bil in the third quarter ended Sept 30 compared with the same quarter last year, due mainly to higher net interest income and income from the Islamic banking business.
Two plantation companies made the list – Kuala Lumpur Kepong Bhd and United Plantations Bhd, not surprising given that sentiment in the sector has improved. Local crude palm oil prices are trading above RM3,000 per tonne and palm oil inventory levels have fallen to about 1.7 million tonnes, making this supportive for palm oil prices.
A new entrant to the list is Ekovest Bhd, which has attracted investors for its plans to make a special payout to shareholders of up to RM244mil, or 25 sen a share. Ekovest has hogged headlines since it announced its intention to dispose of a 40% stake in phases one and two of the Duta-Ulu Kelang Expressway (Duke) to the Employees Provident Fund for RM1.13bil.
FBM KLCI Top 20 Losers
The downstream oil and gas players and the rubber glove players were quite certainly the worst performers of 2016.
Investors sold down shares of Shell Refining Co (Federation of Malaya) Bhd, Petronas Dagangan Bhd and Petronas Gas Bhd (PetGas) on the back of unexciting earnings, forex losses and higher costs.
Generally, analysts are less enthusiastic on the outlook of Petronas Dagangan, as the domestic marketing arm of Petronas faces higher costs and weak consumer sentiment.

Meanwhile, PetGas continued to incur unrealised forex losses for its US-dollar finance lease liabilities, although this has now reduced from the previous year.
Not surprisingly, UMW Holdings Bhd was a big loser due to its oil and gas division, which has been badly hit by exceptional impairments and very low utilisation of its rigs.
Then there is Axiata Group Bhd, which has operations in 10 countries, and has seen competition rise in almost all the markets it operates in. Hence it needs to incur more capital expenditure which has thus put pressure on its profits.
The rubber glove players that were most sold down were Kossan Rubber Industries Bhd and Hartalega Bhd because of the price war on glove products. The industry as a whole will continue to be impacted by higher production cost, especially with the recent increase in minimum wage.
Nonetheless, glove makers are poised to record sequentially stronger earnings on improved supply-demand dynamics and a more favourable operating environment due to the weak ringgit.
SAM Engineering & Equipment (M) Bhd was another loser, probably because of the expansion cost it requires for its new RM100mil production facility in Bukit Minyak, Penang. Results over the last year have been weaker mainly on new projects start-up costs and foreign exchange movement.
SAM is building a new plant on a four-acre site in Bukit Minyak to produce nacelle beams for the new Airbus A320neo aircraft.

Read more at http://www.thestar.com.my/business/business-news/2016/12/31/consumer-stocks-emerge-winners-in-2016/#B3642WxMflb6TKbh.99

Wednesday 29 August 2012

The Magic of Dutch Lady: Measuring management's ability to profitably allocate earnings.

Depicted below are the 12 years financial statistics of Dutch Lady.

Dutch Lady


Date DPS EPS Retained EPS
1999 0 15.9 15.9
2000 4.5 21.7 17.2
2001 5.8 18.7 12.9
2002 5.8 23.7 17.9
2003 12.8 24.2 11.4
2004 56 26.6 -29.4
2005 63.2 42.4 -20.8
2006 63.2 67.3 4.1
2007 42.1 73.8 31.7
2008 65.6 66.6 1
2009 72.5 94.4 21.9
2010 72.5 119 46.5
Total 464 594.3 130.3

1999-2010
DPO 0.78
EPS increase 103.1 
Return on retained earnings  79.1%Thumbs Up


We can observe that for the last 12 years (year 1999 to year 2010), the management of Dutch Lady:

1.  has earned a total of 594.3 sen per share
2.  has distributed a total of 464 sen per share, giving a DPO ratio of 78.1%.
3.  has retained a total of 130.3 sen per share as retained earnings.
4.  has increased its EPS by 103.1 sen per share ( 119 - 15.9 = 103.1) from 1999 of 15.9 sen per share to 119 sen per share in 2010.



How do we as investors measure a company and its management's ability to profitably allocate (unrestricted) earnings?

We can do this by taking the per share earnings retained by a business for a certain period of time, then compare it to any increase in per share earnings that occurred during this same period.  

Thus, the management of Dutch Lady has used the retained EPS of 130.3 sen per share to grow its earnings by 103.1 sen per share from 1999 to 2010..  

Therefore, the management of Dutch Lady has earned a 79.1%Thumbs Up( = 103.1 / 130.3) return in 2010, on the 130.3 sen a share that Dutch Lady retained from the year 1999 to 2010.
Even if we have no idea of the business of Dutch Lady, we can still safely conclude that Dutch Lady has done a great job of profitably allocating its retained earnings.

This test is not perfect.  One must be careful that the per share earnings figures used are not aberrations.  One has to make sure that the per share figures used are indicative of any real increase or decrease in earning power.  

The advantage to this test is that is gives you, the investor, a really fast method of determining whether or not a company and its management have the ability to allocate retained earnings in a fashion that increases the wealth of the company's shareholders.

Saturday 23 June 2012

Investor's Checklist: Consumer Services

Most consumer services concepts fail in the long run, so any investment in a company in the speculative or aggressive growth stage of the business life cycle needs to be monitored more closely than the average stock investment.

Beware of stocks that have already priced in lofty growth expectations.  You can make money if you get in early enough, but you can also lose your shirt on the stock's rapid downslide.

The sector is rife with low switching costs.  Companies that establish store loyalty or store dependence are very attractive.  Tiffany's is a good example; it faces limited competition in the retail jewelery market.

Make sure to compare inventory and payables turns to determine which retailers are superior operators.  Companies that know what their customers want and how to exploit their negotiating power are more likely to make solid bets in the sector.

Keep an eye on those off-balance sheet obligations.   Many retailers have little or no debt on the books, but their overall financial health might not be that good.

Look for a buying opportunity when a solid company releases poor monthly or quarterly sales numbers.  Many investors overreact to one month's worth of bad same-store sales results, and the reason might just be bad weather or an overly difficult comparison to the prior-year period.  Focus on the fundamentals of the business and not the emotion of the stock.

Companies also tend to move in tandem when news comes out about the economy.  Look for a chance to pick up shares of a great retailer when the entire sector falls - keep that watch list handy.  


Ref:  The Five Rules for Successful Stock Investing by Pat Dorsey


Read also:
Investor's Checklist: A Guided Tour of the Market...

Friday 22 June 2012

Investor's Checklist: Consumer Goods


Find companies that enjoy the cost advantages of manufacturing on a larger scale than most other competitors.  One related issue is whether the firm holds dominant market share in its categories.

Look for the firms that consistently launch successful new products - all the better if the firm is first to market with these innovations.

Check to see if the company is supporting its brand with consistent advertising.  If the firm constantly promotes its products with sale prices, it's depleting brand equity and just milking the brand for shorter-term gain.

Examine how well the firm is handling operating costs.  Occasional restructuring can help squeeze out efficiency gains and lower costs, but if the firm is regularly incurring restructuring costs and relying solely on this cost-cutting tactic to boost its business, tread carefully.

Because these mature firms generate so much free cash flow, it's important to make sure management is using it wisely.  How much of the cash is turned over to shareholders in the form of dividends or share repurchase agreements?

Keep in mind that investors may bid up a consumer goods stock during economic downturns, making the shares pricey relative to its fair value.  Look for buying opportunities when shares trade with a 20 percent to 30 percent margin of safety.  


Ref:  The Five Rules for Successful Stock Investing by Pat Dorsey



Read also:
Investor's Checklist: A Guided Tour of the Market...

Tuesday 3 April 2012

Nestle versus Dutch Lady (A Comparative Study)


3.4.2012 3.4.2012
Nestle Dutch Lady
Income Statement
31/12/2011 31/12/2011
RM (m) RM (m)
Revenue 4,700.99 810.65
Gross Profit 1,542.12 304.47
Operating Profit 579.428 139.372
Financing costs -21.398 -0.919
PBT 558.809 141.553
PAT 456.301 108.082
EPS (basic) sen 194.58 168.88
EPS (diluted) sen
Balance Sheet
NCA 987.259 74.048
CA 1015.064 324.465
Total Assets 2002.323 398.513
Total Equity 640.86 259.154
NCL 446.723 4.051
CL 914.74 135.308
Total Liabilities 1361.463 139.359
Total Eq + Liab 2002.323 398.513
Net assets per share 2.730 4.05
Cash & Eq 52.461 193.143
LT Borrowings 337.711 0
ST Borrowings 4.223 0
Net Cash -289.473 193.143
Inventories 517.573 93.448
Trade receivables 444.854 36.713
Trade payables 878.321 121.831
Quick Ratio 0.54 1.71
Current Ratio 1.11 2.40
Cash flow statement
PBT 558.809 141.553
OPBCWC 681.492
Cash from Operations 640.247 188.290
Net CFO 581.844 161.940
CFI -90.683 -7.135
CFF -461.013 -47.319
Capex -93.015 -10.882
FCF 488.829 151.058
Dividends paid -398.650 -46.400
DPS (sen) 180.00 72.5
No of ord shares (m)
basic 234.5 64
diluted
Financial Ratios
Gross Profit Margin 32.80% 37.56%
Net Profit Margin 9.71% 13.33%
Asset Turnover 2.35 2.03
Financial Leverage 3.12 1.54
ROA 22.79% 27.12%
ROC 49.05% 163.73%
ROE 71.20% 41.71%
Valuation 3.4.2012 3.4.2012
Price  55.9 36
Market cap (m) 13108.55 2304.00
P/E 28.73 21.32
P/BV 20.45 8.89
P/FCF 26.82 15.25
P/Div 32.88 49.66
DPO ratio 0.87 0.43
EY 3.48% 4.69%
FCF/P 3.73% 6.56%
DY 3.04% 2.01%

MBMR versus Dutch Lady (A Comparative Study)


3.4.2012 3.4.2012
MBMR Dutch Lady
Income Statement
31/12/2011 31/12/2011
RM (m) RM (m)
Revenue 1,752.30 810.65
Gross Profit 132.71 304.47
Operating Profit 41.998 139.372
Financing costs 1.556 -0.919
PBT 151.099 141.553
PAT 138.053 108.082
EPS (basic) sen 49.77 168.88
EPS (diluted) sen 49.25
Balance Sheet
NCA 1257.34 74.048
CA 775.88 324.465
Total Assets 2033.22 398.513
Total Equity 1307.129 259.154
NCL 373.477 4.051
CL 352.614 135.308
Total Liabilities 726.091 139.359
Total Eq + Liab 2033.22 398.513
Net assets per share 4.550 4.05
Cash & Eq 247.398 193.143
LT Borrowings 371.459 0
ST Borrowings 57.292 0
Net Cash -181.353 193.143
Inventories 251.154 93.448
Trade receivables 264.329 36.713
Trade payables 286.406 121.831
Quick Ratio 1.49 1.71
Current Ratio 2.20 2.40
Cash flow statement
PBT 151.099 141.553
OPBCWC 53.903
Cash from Operations  - 188.290
Net CFO 0.802 161.940
CFI# -291.327 -7.135
CFF 355.727 -47.319
#Acquisition sub  -311.791
Capex -27.114 -10.882
FCF -26.312 151.058
Dividends paid -33.995 -46.400
DPS (sen) 14.00 72.5
No of ord shares (m)
basic 242.864 64
diluted 245.429
Financial Ratios
Gross Profit Margin 7.57% 37.56%
Net Profit Margin 7.88% 13.33%
Asset Turnover 0.86 2.03
Financial Leverage 1.56 1.54
ROA 6.79% 27.12%
ROC 9.27% 163.73%
ROE 10.56% 41.71%
Valuation 3.4.2012 3.4.2012
Price  4.76 36.08
Market cap (m) 1156.03 2309.12
P/E 8.37 21.36
P/BV 0.88 8.91
P/FCF -43.94 15.29
P/Div 34.01 49.77
DPO ratio 0.25 0.43
EY 11.94% 4.68%
FCF/P -2.28% 6.54%
DY 2.94% 2.01%


23.3.2012
It is thus not surprising that MBMR announced thus:
NEW ISSUE OF SECURITIES (CHAPTER 6 OF LISTING REQUIREMENTS): COMBINATION OF NEW ISSUE OF SECURITIES

MBM RESOURCES BERHAD (“MBMR” OR THE “COMPANY”)

(I) PROPOSED BONUS ISSUE; AND
(II) PROPOSED RIGHTS ISSUE WITH WARRANTS 

Aeon versus Dutch Lady (A Comparative Study)


3.4.2012 3.4..2012
Aeon Dutch Lady
Income Statement
31/12/2011 31/12/2011
RM (m) RM (m)
Revenue 2,984.61 810.65
Gross Profit - 304.47
Operating Profit 271.775 139.372
Financing costs 0 -0.919
PBT 277.272 141.553
PAT 195.353 108.082
EPS (basic) sen 55.66 168.88
EPS (diluted) sen
Balance Sheet
NCA 1674.326 74.048
CA 763.156 324.465
Total Assets 2437.482 398.513
Total Equity 1287.91 259.154
NCL 21.146 4.051
CL 1128.426 135.308
Total Liabilities 1149.572 139.359
Total Eq + Liab 2437.482 398.513
Net assets per share 3.669 4.05
Cash & Eq 341.052 193.143
LT Borrowings 0 0
ST Borrowings 0 0
Net Cash 341.052 193.143
Inventories 353.555 93.448
Trade receivables 68.549 36.713
Trade payables 1108.504 121.831
Quick Ratio 0.36 1.71
Current Ratio 0.68 2.40
Cash flow statement
PBT 277.272 141.553
OPBCWC 414.932
Cash from Operations 447.334 188.290
Net CFO 356.860 161.940
CFI -304.594 -7.135
CFF -42.122 -47.319
Capex -315.131 -10.882
FCF 41.729 151.058
Dividends paid -42.120 -46.400
DPS (sen) 12.00 72.5
No of ord shares (m)
basic 351 64
diluted
Financial Ratios
Gross Profit Margin #VALUE! 37.56%
Net Profit Margin 6.55% 13.33%
Asset Turnover 1.22 2.03
Financial Leverage 1.89 1.54
ROA 8.01% 27.12%
ROC 20.63% 163.73%
ROE 15.17% 41.71%
Valuation 3.4.2012 3.4.2012
Price  9.5 36.08
Market cap (m) 3334.50 2309.12
P/E 17.07 21.36
P/BV 2.59 8.91
P/FCF 79.91 15.29
P/Div 79.17 49.77
DPO ratio 0.22 0.43
EY 5.86% 4.68%
FCF/P 1.25% 6.54%
DY 1.26% 2.01%

Coastal versus Dutch Lady (A Comparative Study)


3.4.2012 5.3.2012
Coastal Dutch Lady
Income Statement
31/12/2011 31/12/2011
RM (m) RM (m)
Revenue 719.31 810.65
Gross Profit 196.67 304.47
Operating Profit  - 139.372
Financing costs -0.519 -0.919
PBT 191.636 141.553
PAT 190.954 108.082
EPS (basic) sen 39.51 168.88
EPS (diluted) sen
Balance Sheet
NCA 98.487 74.048
CA 1042.326 324.465
Total Assets 1140.813 398.513
Total Equity 770.798 259.154
NCL 16.936 4.051
CL 353.079 135.308
Total Liabilities 370.015 139.359
Total Eq + Liab 1140.813 398.513
Net assets per share 1.595 4.05
Cash & Eq 150 193.143
LT Borrowings 11.414 0
ST Borrowings 4.089 0
Net Cash 134.497 193.143
Inventories 819.277 93.448
Trade & other receivables 72.347 36.713
Trade & other payables 348.967 121.831
Quick Ratio 0.63 1.71
Current Ratio 2.95 2.40
Cash flow statement
PBT 191.636 141.553
OPBCWC 194.058
Cash from Operations 61.380 188.290
Net CFO 59.471 161.940
CFI 14.510 -7.135
CFF -75.736 -47.319
Capex -16.547 -10.882
FCF 42.924 151.058
Dividends paid -40.231 -46.400
DPS (sen) 8.33 72.5
No of ord shares (m)
basic 483.229 64
diluted
Financial Ratios
Gross Profit Margin 27.34% 37.56%
Net Profit Margin 26.55% 13.33%
Asset Turnover 0.63 2.03
Financial Leverage 1.48 1.54
ROA 16.74% 27.12%
ROC 30.01% 163.73%
ROE 24.77% 41.71%
Valuation 3.4.2012 5.3.2012
Price  2.02 29.5
Market cap (m) 976.12 1888.00
P/E 5.11 17.47
P/BV 1.27 7.29
P/FCF 22.74 12.50
P/Div 24.26 40.69
DPO ratio 0.21 0.43
EY 19.56% 5.72%
FCF/P 4.40% 8.00%
DY 4.12% 2.46%