Yee Lee Corporation Bhd ('Yee Lee') is involved in manufacturing; marketing & distribution of fast-moving, high quality consumer products (such as household food products, oral care products, household cleaners and laundry products); and eco-tourism (which is carried out near its Sabah Tea estate, near the foothills of Mount Kinabalu). Its manufacturing operations include:
- Manufacturing of corrugated fiberboard cartons and boxes
- Milling of crude palm oil and palm kernel
- Printing and manufacturing of general line tin cans
- Manufacturing and distribution of tea
Recent Financial Results
Yee Lee has just announced its results for 3Q2009 ended 30/9/2009, where its net profit increased by 10.7% q-o-q or 63.6% y-o-y to RM5.0 million. Its turnover declined by 1.1% q-o-q or 11.5% y-o-y to RM175.5 million. The lower turnover was "primarily due to the substantial decrease in crude palm oil price which directly reduced the selling price of oil palm products coupled with the decrease in sales of Procter and Gamble's products. However the sharp decrease had been mitigated by the substantial increase in the sales of bottled water and other agency products such as Campbell's and Dutch Lady."
Table 1: Yee Lee's 8 quarterly results
Chart 1: Yee Lee's 13 quarterly results
Financial Position
Yee Lee's financial position as at 30/9/2009 is deemed fair, with current & gearing ratios at 1 time and 0.8 time, respectively. To be fair, the gearing ratio includes short-term borrowings of RM144 million which was used to finance its working capital.
Valuation
Yee Lee (closed at RM1.39 yesterday) is now trading at a trailing PE of 5.0 times (based on last 4 quarters' EPS of 28 sen) or at a Price to Book of 0.45 times (based on NTA per share of RM3.06 as at 30/9/2009). At these multiples, Yee Lee is fairly attractive.
Technical Outlook
Yee Lee appears to have been trapped in a bottoming phase over the past 3 years until it broke above the RM1.20 resistance level in March. Since then, it had surpassed the resistance level of RM1.40 (to hit a high of RM1.53 in early November). Since then, it has dropped below the RM1.40 level but was able to stay above the 100-day SMA line of RM1.35.
Chart 2: Yee Lee's daily chart as at Dec 2, 2009_4.45pm (Source: Quickcharts)
Chart 3: Yee Lee's monthly chart as at Dec 1, 2009 (Source: Tradesignum)
Conclusion
Based on improving financial performance & attractive valuation, Yee Lee is a good stock for long-term investment.
7 comments:
Keyasic dropped from 0.68 to 0.40. Bsae on the recent financial result, this company is quite healthy. Is this a good long term stock ?
LHH 2Q EPS increase to 10c, dun u think its attractive too? price still lingering at 1.10+...
Hi David,
Keyasic's financial performance has deteriorated compared to last year. Its 9-month results up 30/9/2009 shows that its net profit is down 37% to RM12.2 million on a 36%-decline in turnover to RM4.2 million. Annualized EPS for FY2009 is about 2 sen giving the company a PE ratio of 20 times (current price: RM0.405).
Chartwise, it has good support at the psychological RM0.40 level & the horizontal line of RM0.35. Strong resistance at RM0.45 & then at RM0.50.
I cannot answer your question whether this is a good stock for long-term investment because I don't understand the business. If you are tech savvy, you may like to check out the link below & form your opinion accordingly.
http://www.keyasic.com/PDFs/Key%20ASIC%20Company%20Pitch-080807.pdf
Hi Wedding Gifts, Favours, Bells,
In the past 3 years, the best quarter for LHH has been the quarter ending September 30. In the past 5 years, the only exceptionally good quarter ending December 31 was QE31/12/2005, when it recorded a net profit of RM17.1 million vs RM13.2 million for QE30/9/2005.
Unless LHH can achieve a very good bottom-line in the next quarter, like what it did in QE31/12/2005, its results for FY2010 will not be exceptional. For your information, LHH has a sharp rally in January & February 2006, coinciding with the good results for QE31/12/2005.
I think it is quite risky to have technology stock. Thanks anyway.
Alex,
how come theres always a chunk of $$ goes to the minority shareholders every quarter as shown in LHH statement? who are these "minority interest" as noted...
Hi, I bought it at 3.26 before share split. Anyone can comment when will this share increase again. Seem like recently drop a lot after share split.
Post a Comment