Harison- an attractive consumer stock

Harrisons Holdings (Malaysia) Bhd ('Harison') is involved in the marketing, sales & distribution of consumer, engineering, building materials, wines and chemical products and the operation of shipping, insurance & travel agencies.

Harison has just announced its results for 1Q2008 ending 31/3/2008, where its net profit increased by 16.6% q-o-q or 65.2% y-o-y to RM6.4 million. Its turnover increased by 14.0% q-o-q or 18.8% y-o-y to RM272 million. The improved performance is attributable to stronger sales in the Fast Moving Consumer Goods Division (FMCG). The company has also benefited from a small gain of RM614,000 from the disposal of other investment.



Harison (closed at RM1.39 as at May 27th) is now trading at a trailing PE of 4.2 times (based on the last 4 quarters' EPS totaling 33.4 sen) or at a P/Book of 0.44 times (based on NTA per share of RM3.15 as at 31/3/2008). The company pay a dividend of 7.5% in FY2007 & 7.0% in FY2006- giving it a decent dividend yield of 5.2%. At these multiples, Harison is deemed very attractive.

Harison share price movement is rather erratic. For the past 2 years, the stock appears to be in an uptrend (starting from RM0.92 in July 2006) & peaked at RM1.50 in July 2007. Since then, the stock has been drifting lower, with lows of RM1.20 was recorded in February & March 2008. In the recent rebound, the stock appears to have broken above its medium-term downtrend. As such, Harison share price could continue to rise & the stock may re-test its recent high of RM1.50.


Chart: Harison's daily chart as at May 27th, 2008 (source: Tradesignum.com)

Based on attractive valuation & improved performance, Harison could be a good consumer stock to hold for the medium-term.