FIGURE 1: INCH KENNETH
KAJANG RUBBER PLC LAST 5 YEARS SHARE PRICE TREND
**analysis
based on 2018 annual report.
1.
GENERAL INTRO: INCH KENNETH is one of the main
oil palm plantations in Malaysia.
2.
NOTABLE POINTS:
a. In
2018 report, main business segments include operation of oil palm plantations
and sale of fresh fruit bunches (no milling), operation of two hotels in
Terengganu and CV rubber blocks manufacturing (Thailand subsidiary)
b. the
Group operates oil palm estates in Kajang and Bangi (Selangor) with a total
planted area of 190 hectares.
c. the
Group’s revenue was RM15.737 million for the year ended 31 December 2018 as
compared to RM15.839 million in the preceding year, decrease of 0.6%, mainly
due to the drop in selling prices of the rubber blocks during the financial
year.
3.
IS THIS COUNTER A STRONG GROWTH STOCK?
a. REVENUE
RANGE (RM million): 15.73 million as reported in 2018 annual report, this is a low
revenue company.
b. SHARE
PRICE: from 2015-2018, share price has been steady at around RM0.70 , then on
decreasing trend to around RM0.60 by around January 2020
c. EARNING
PER SHARE (EPS): earning per share in last 5 years fluctuated from -3.66 to -0.48
sen, indicating the company is making losses in all of last five years
d. FUTURE
POTENTIAL/PROSPECTS: share price may drop further in the next few years if
company continue to make losses
e. CAPITAL
EXPENDITURE (CAPEX): spending on purchase of new fixed assets is RM 25.2
million, around 3% of total assets.
4.
IS THIS A STRONG DIVIDEND STOCK?
a. DIVIDEND
YIELD: in 2018 financial year, INCH KENNETH declared a dividend payout of 1.109
sen per share to shareholders, which amounts to a dividend yield of 1.82%.
b. CONSISTENCY:
the dividend payout was consistent, dividend paid to shareholders in last five
years (2014-2018) ranged from 1.09 to 1.118 sen per share.
c. DIVIDEND
PAYOUT RATIO: N/A
5.
IS THE MANAGEMENT PERFORMANCE GOOD?
a. RETURN
ON EQUITY (ROE): in 2018 financial year, INCH KENNETH achieved a low return of
shareholders’ equity, at -1.76%.
b. COST-TO-INCOME
RATIO: N/A
6.
OTHER INDICATORS:
a. CASH
FLOW: cash flow is positive, around RM 30.43 million, equivalent to RM 0.08 per
share
b.
SUPPORT BY INSTITUTIONAL INVESTORS: this counter
is not well supported by institutional investors, there are only 13 institutional
investors at top 30 major shareholders list, not including insurance companies and
investment funds. Its major shareholders are Concrete Engineering Products
Berhad (15.34%), Hamptons Property Sdn Bhd (13.02%) and Ng Ah Chai (11.29%).
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