FIGURE 1: CAREPLUS GROUP BERHAD
LAST 2 YEARS SHARE PRICE TREND
**analysis
based on 2018 annual report.
1.
GENERAL INTRO: Careplus is one of the major
glove manufacturers in Malaysia.
2.
NOTABLE POINTS:
a. in
2018 report, Careplus stated that production capacity around 4.1 billion pieces
per annum, reported facing price competition and capacity surpluses issues
occurring in the industry
b. also
reported revenue increased of ~5% compared to last financial year, profit
before tax increased by 5.78%, report profit after tax of 3.7 million. However,
most of the profit was attributed to other parties, profit attributable to
shareholders were negative, amounted to -1.6 sen per share.
c. reported
about 88% of installed production capacity was utilised for production
3.
IS THIS COUNTER A STRONG GROWTH STOCK?
a. REVENUE
RANGE (million): ~338 million in 2018 annual report, the revenue is low
compared to other glove counters, which are frequently above RM billion.
b. SHARE
PRICE: from 2018-2019, share price dropped significantly from RM 0.30 to
current share price of about RM 0.14
c. EARNING
PER SHARE (EPS): earning per share in last 5 years decreased from 2.1 sen to
-1.6sen
d. FUTURE
POTENTIAL/PROSPECTS: need further improvement of management to increase
profitability
e. CAPITAL
EXPENDITURE (CAPEX): spending on purchase of new fixed assets is RM 14 million,
around 4.7% of total assets.
4.
IS THIS A STRONG DIVIDEND STOCK?
a. DIVIDEND
YIELD: in 2018 report, Careplus did not declare a dividend payout to shareholders.
b. CONSISTENCY:
not consistent dividend payout, last five years (2014-2018) dividends declared in
2015 and 2016 only, which range from 0.25 to 0.3 sen per share.
c. DIVIDEND
PAYOUT RATIO: N/A
5.
IS THE MANAGEMENT PERFORMANCE GOOD?
a. RETURN
ON EQUITY (ROE): in 2018 financial year, Careplus achieved a poor return of
shareholders’ equity, at -8.64%.
b. COST-TO-INCOME
RATIO: cost-to-income ratio is very high at about 5452%, much higher than Top
Glove, which reported a cost-to-income ratio of about 1000%
6.
OTHER INDICATORS:
a. CASH
FLOW: cash flow is positive, around RM 9.26 million, equivalent to RM 0.02 per
share
b.
SUPPORT BY INSTITUTIONAL INVESTORS: this counter
is not well supported by institutional investors, there are only 4 institutional
investors at top 30 major shareholders list.
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