COMMENTS ON BOUSTEAD HEAVY INDUSTRIES CORPORATION BHD (8133)

FIGURE 1: BOUSTEAD HEAVY INDUSTRIES CORPORATION BHD LAST 5 YEARS SHARE PRICE TREND

**analysis based on 2017 annual report.

1.       GENERAL INTRO: This counter core business is on ship building and repair for defense industry.

2.       NOTABLE POINTS:

a.       business segments include commercial and naval ship building and repair, clientele include Royal Malaysia Navy, local and overseas ship owners, also fabrications works for oil &gas industry. Also involve manufacturing of aerospace components and propellents.

3.       IS THIS COUNTER A STRONG GROWTH STOCK? 

a.       REVENUE RANGE (million): ~ 277.6 million in 2017 annual report, this is a low revenue company.

b.      SHARE PRICE: share price on decreasing trend in last few years, decreased from peak of RM3.80 in 2012 to current share price of RM1.30.

c.       EARNING PER SHARE (EPS): earning per share in last 5 years are fluctuating, from -12.37 to 30.87 sen per share, making losses in one out of five years

d.      FUTURE POTENTIAL/PROSPECTS: for ship building and maintenance segment, expect steady revenue from defense department contracts, while business segment related to oil&gas industry remaining challenging due to slower demand for hydrocarbon energy from developing economies as well as the shift towards renewable energy.

e.      CAPITAL EXPENDITURE (CAPEX): spending on purchase of new fixed assets is 2 million, around 0.3% of total assets.

4.       IS THIS A STRONG DIVIDEND STOCK?     

a.       DIVIDEND YIELD: in 2017 report, dividend of 5sen per share payout declared, amount to dividend yield of 3.85%

b.      CONSISTENCY: in last five years only in 2017 there was dividend payout to shareholders, no dividend declared from 2013-2016

5.       OTHER INDICATORS:

a.       CASH FLOW: cash flow is positive, around 45.8 million

b.      SUPPORT BY INSTITUTIONAL INVESTORS: there is presence of 2 institutional investors at top 30 major shareholders list, which are Lembaga Tabung Haji and Lembaga Tabung Angkatan Tentera.

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