COMMENTS ON BOILERMECH HOLDINGS BERHAD (0168)

FIGURE 1: BOILERMECH HOLDINGS BERHAD LAST 5 YEARS SHARE PRICE TREND

**analysis based on 2018 annual report.

1.       GENERAL INTRO: This counter core business is on supplying biomass boilers, which burn oil palm biomass and convert to electricity. Also provide water treatment systems for palm oil mill effluent and other industrial waste.

2.       NOTABLE POINTS:

a.       provide effective systems to convert waste to energy, e.g. apart from the biomass boiler, also provide biogas system that capture biogas in the palm oil mill effluent (POME) to generate electricity, at the same time reducing methane discharged into the atmosphere.

b.      main source of revenue stream from Indonesia and Malaysia market. Long term service and maintenance of the boilers also form part of company’s revenue income.

3.       IS THIS COUNTER A STRONG GROWTH STOCK? 

a.       REVENUE RANGE (million): ~ 225 million in 2018 annual report, this is a low revenue company.

b.      SHARE PRICE: last few years share price on decreasing trend, decreasing from peak of ~RM1.70 in 2014 to around RM0.50 now.

c.       EARNING PER SHARE (EPS): the last few years EPS on decreasing trend, from 2014 to 2018, EPS decreased from 12.02 sen to 3.98 sen

d.      FUTURE POTENTIAL: demand on biomass boilers depend on development of the palm oil industry, company also facing competition from other boiler providers

e.      CAPITAL EXPENDITURE (CAPEX): spending on purchase of new fixed assets is quite low, 4.5 million, around 0.5% of total assets, appear company has no large scale expansion plan.

4.       IS THIS A STRONG DIVIDEND STOCK?     

a.       DIVIDEND YIELD: in 2018 report, dividend payout of 1.75 sen per share declared, dividend yield around 3.37%

b.      CONSISTENCY: in last five years have consistent dividend payout to shareholders, range from 1.5 to 3 sen per share

5.       OTHER INDICATORS:

a.       CASH FLOW: cash flow is positive, around 30.2 million

b.      SUPPORT BY INSTITUTIONAL INVESTORS: there is no presence of institutional investors at top 30 major shareholders list

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