Cycle & Carriage Bintang Bhd (‘CCB’) is the largest dealer of Mercedes-Benz motor vehicles in Malaysia, involved in retail and after-sales service.
Recent Financial Performance
CCB's top-line and bottom-line rose gradually over the last 3 years. That steady increase suddenly went exponentially. The reason given for the improved top-line and bottom-line are:
- Unit sales up 46%
- Higher earnings from Mercedes-Benz operations
- Dividend received from Mercedes-Benz Malaysia (“MBM”)
Chart: CCB's last 12 quarters' P&L (Source: ShareInvestor.com)
CCB received a dividend of RM11.2 million from MBM for 1H2015. In FY2014, it did not receive any dividend from MBM due to poor financial result. In FY2013 & FY2012, CCB received dividend totaling RM11.2 million respectively, in 2 equal tranches. Does this mean that CCB may receive another dividend of RM11.2 million from MBM this year? If so, CCB's FY2015 EPS could be as high as 57 sen. CCB (closed at RM3.46 yesterday) is now trading at a PE of 6 times. In addition, CCB may pay out dividend again after suspending in FY2013 & FY2014. It paid out dividends totaling 10 sen in FY2012 & FY2011. If it does the same in FY2015, the DY for the stock is 2.9%.
Diagram 3: CCB's 1H2015, 1H2014 & 1H2013 P&L (Source: Company via Bursa website)
Diagram 4: CCB's FY2014, FY2013 & FY2011 P&L (Source: Company via Bursa website)
CCB has broken above its downtrend line at RM2.20 in May. The share price could potentially test the "horizontal" line ('AB') at RM6.00.
Chart 2: CCB's weekly chart as at July 23, 2015 9Source: ShareInvestor.com)
Chart 3: CCB's monthly chart as at July 23, 2015 9Source: ShareInvestor.com)
Based on good financial performance, fairly attractive valuation & positive technical outlook, CCB could be a good stock for long-term investment.
In addition to the disclaimer in the preamble to my blog, I hereby confirm that I do not have any relevant interest in, or any interest in the acquisition or disposal of, CCB.