FIGURE 1: INSAS BERHAD LAST
5 YEARS SHARE PRICE TREND
**analysis
based on 2020 annual report.
1. GENERAL INTRO: INSAS’s core business is
in stockbroking and investment.
2.
NOTABLE
POINTS:
a. For FY 2020, the Group recorded revenue of
RM197.5 million, which is less than FY 2019. Main contributors to the Group
revenue is from trading activities by the investment holding & trading
segment (44%), followed by Financial Services segment (34%) and retail trading
and car rental segment (20%). The Group recorded a lower pre-tax profit at
RM25.2 million in FY 2020 as compared to FY2019 and the decrease is primarily
due to the unrealised mark to market losses reported by the investment holding
and trading units and lower profit contribution from Inari.
b. The Group’s investment strategies encompass
stringent asset allocation and diversification to manage risk of the portfolio
investments of the Group. To achieve this objective, the Group acquires fixed
and variable income investments typically money market funds, debt securities
and high yield growth stocks and listed equities and options. The Group’s
investments in listed equities are primarily in the properties and REITS,
e-commerce, logistics, consumer products and financial services sectors in both
local and overseas stock exchanges, and the key equity investments include,
amongst others, Ho Hup Construction Company Berhad, Omesti Berhad and SYF
Resources Berhad.
c. In FY2020, the Group continued its activities in
investments in the technology sector. The Group’s major holdings include
investee companies Inari Amertron Berhad - Outsourced Semiconductor Assembly
and Test group; Diversified Gateway Solutions Berhad – and
Sengenics Corporate Pte. Ltd. - a functional proteomics company.
3.
IS
THIS COUNTER A STRONG GROWTH STOCK?
a. REVENUE RANGE (RM million): 197.5 million as
reported in 2020 annual report, this is a low revenue company. Between year 2012-2020,
the counter’s revenue has been on an overall decreasing trend. On the other
hand, both of the Profit Before Tax (PBT) and Profit After Tax (PAT) are on a fluctuating
trend.
b.
SHARE PRICE: from Jan 2016 to Jan 2021, share
price range between RM0.50 to RM1.00.
c. EARNING PER SHARE (EPS): earning per share in
last 5 years was overall worsening, whereby it decreased from 27.3 to 2.24 sen.
d. PRICE TO EARNINGS (P/E) RATIO: current P/E ratio
is 5.2, which shows that the share price is not too expensive to invest in
e.
FUTURE POTENTIAL/PROSPECTS: share price expect
to be stable in the next few years.
f. CAPITAL EXPENDITURE (CAPEX): spending on
purchase of new fixed assets and other investments amount to about RM 47.7
million, which is around 2% of total assets. This shows that the management is not
making a major investment in the future growth and expansion of the business.
4.
IS
THIS A STRONG DIVIDEND STOCK?
a. DIVIDEND YIELD: in 2020 financial year, INSAS declared
a dividend payout of 2 sen to its shareholders, which amounts to a dividend
yield of 2.34%.
b.
DIVIDEND PAYOUT RATIO: The dividend-to-earnings
payout ratio is about 89%
c. CONSISTENCY: This counter’s dividend payout has
been very consistent (dividend paid to shareholders in 5 years out of 5 years)
in the last five years, whereby dividends paid to shareholders ranged from 1 to
2 sen per share.
5.
IS
THE MANAGEMENT PERFORMANCE GOOD?
a.
RETURN ON EQUITY (ROE): in 2020 financial year, INSAS
reported a poor return of shareholders’ equity, at 0.8%.
b. COST-TO-INCOME RATIO: In FY2020, the calculated
cost-to-income ratio is 674%. This shows that the cost of doing business is not
too high.
c. DEBT-TO-EQUITY (GEARING) RATIO: Its gearing
ratio is at 28.5%, whereby its debt level is less than its equity, resulting in
a healthy balance sheet.
d.
CASH FLOW: cash flow is positive, at around RM 398.6
million, equivalent to RM 0.60 per share.
6.
OTHER
INDICATORS:
a. SUPPORT BY INSTITUTIONAL INVESTORS: This counter
is not well supported by institutional investors, there are only 8 institutional
investors at top 30 major shareholders list, including a few investment funds, but
not including insurance funds and retirement funds. Its major shareholders are Dato’
Sri Thong Kok Khee (25.05%), M & A Investments International Limited
(18.77%) and Dato’ Thong Kok Yoon (11.19%).
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