FIGURE 1: GAS MALAYSIA BHD
LAST 5 YEARS SHARE PRICE TREND
**analysis
based on 2018 annual report.
1.
GENERAL
INTRO: Gas Malaysia Berhad (GMSIA) was established on 16 May 1992 to sell,
market and distribute natural gas as well as to develop, operate and maintain
the Natural Gas Distribution System within Peninsular Malaysia.
2.
NOTABLE
POINTS:
a. In
2018 report, Gas Malaysia operates and maintains 2,334 kilometres of gas
pipeline across Peninsular Malaysia, supplying natural gas to 888 industrial
customers, 1,021 commercial customers and 12,690 residential customers; and
supplying LPG to 1,310 commercial customers and 22,013 residential customers.
In total, its customer base stands at 37,922. Its industrial customers
contribute 99.2% of the total gas volume sold.
b. Its
sales volume from 2014-2018 increased from 147.6 to 193.8 MMBtu.
c. As
for the Profit after Zakat, Tax and Minority Interest, the Group recorded an
improvement in earnings by 11.9%, registering RM180.39 million compared with
RM161.14 million recorded in the preceding year. The higher revenue recorded
was mainly due to two key factors. The first being an increase in the volume of
gas sold to customers. This was achieved through the Group’s keen effort and
commitment in completing the construction of the Natural Gas Distribution
System (“NGDS”) network in a timely manner allowing it to cater to the demand
for gas from its new industrial customers. In addition, there was also an
increase in gas demand from its existing customers to meet their business
requirements. The second factor that attributed to the higher revenue was the
two gas tariff revisions that transpired in 2018.
3.
IS
THIS COUNTER A STRONG GROWTH STOCK?
a. REVENUE
RANGE (RM million): 6233.2 million as reported in 2018 annual report, this is a
high revenue company.
b. SHARE
PRICE: from 2015-2020, share price ranged from ~ RM2.00 to RM3.00.
c. EARNING
PER SHARE (EPS): earning per share in last 5 years was overall rising, increasing
from 8.3 to 14 sen
d. FUTURE
POTENTIAL/PROSPECTS: share price expect to be stable in the next few years
e. CAPITAL
EXPENDITURE (CAPEX): spending on purchase of new fixed assets is RM 159.1
million, around 6% of total assets.
4.
IS THIS
A STRONG DIVIDEND STOCK?
a. DIVIDEND
YIELD: in 2018 financial year, GMSIA declared a dividend payout of 13.5 sen per
share to shareholders, which amounts to a dividend yield of 4.82%.
b. DIVIDEND
PAYOUT RATIO: Hence, in 2018 financial year, GMSIA paid out 96% of its earnings
to shareholders in the form of dividend. Last five years dividend payout ratios
were all close to 100%.
c. CONSISTENCY:
the dividend payout was consistent, the dividend paid to shareholders in the last
five years ranged from 8.3 to 13.5 sen.
5.
IS
THE MANAGEMENT PERFORMANCE GOOD?
a. RETURN
ON EQUITY (ROE): in 2018 financial year, GMSIA reported a moderate return of
shareholders’ equity, at 17.63%.
b. COST-TO-INCOME
RATIO: cost-to-income ratio is very high, at 2562%.
6.
OTHER
INDICATORS:
a. CASH
FLOW: cash flow is positive, around RM 122.1 million, equivalent to RM 0.30 per
share.
b.
SUPPORT BY INSTITUTIONAL INVESTORS: this counter
is well supported by institutional investors, there are 30 institutional
investors at top 30 major shareholders list, including LEMBAGA TABUNG HAJI (7.79%),
EPF (3.3%), PERMODALAN NASIONAL BERHAD (1.27%), SKIM AMANAH SAHAM BUMIPUTERA (1.36%)
and few insurance companies/investment funds. Its major shareholders are Anglo-oriental
(Annuities) Sdn Bhd (30.93%), Tokyo Gas – Mitsui & Co. Holdings Sdn Bhd. (18.5%),
PETRONAS Gas Berhad (14.8%).
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