YeeLee- an attractive consumer stock

Background

Yee Lee Corporation Bhd ('YeeLee') is essentially a consumer stock that is involved in the manufacture & sale of the following products:

Food Products

Beverages
Cooking Oil and Vegetable Fats
Instant Noodles

Household Products

Bleach
Dishwashing Paste and Liquid
Laundry Detergent
Praying Oil 

Industrial

Corrugated Cartons
Gloves
PET Bottles Preforms and Caps

Oral Care

Toothbrush
Toothpaste


Recent Financial Results

For QE31/12/2012, YeeLee's net profit increased by 32% q-o-q but dropped 4% y-o-y to RM7.9 million. Revenue declined by 8.4% q-o-q but increased by 8.6% y-o-y to RM164 million. The improvement in the net profit q-o-q was attributable to better performance in aerosol can and trading divisions arising from increase in aerosol can sales and sales of higher product margin portfolio in trading division coupled with lower advertisement and promotion expense. The palm oil refinery and associated company, Spritzer Bhd continued to perform better in this quarter. Palm oil mill had also turnaround in this quarter with increase in oil extraction rate.


 Table 2: YeeLee's last 8 quarterly results


Chart 1: YeeLee's last 27 quarterly results

Financial Position

As at 31/12/201, YeeLee's financial position is deemed satisfactory, with current ratio at 1.1 times and gearing ratio at 0.4 time.

Valuation

YeeLee (at RM0.91 as at 3.00pm) is trading at a PE of 7.5 times (based on last 4 quarters' EPS of 12.5 sen). For a consumer stock, YeeLee is deemed fairly attractive.

Technical Outlook

YeeLee is range-bound between RM0.78 & RM0.92 for the past 20 months. A breakout of the range would point the way forward for the stock. An upside breakout could send the stock to revisit its 2010 high of RM1.24.


 Chart 2: YeeLee's weekly chart as at Apr 9, 2013_2.40pm (Source: Quickcharts)

Conclusion

Based on good financial performance, reasonably satisfactory financial position and attractive valuation, YeeLee is a good stock for long-term investment. If the stock can surpass the RM0.92 level, it may rally to revisit its 2010 high of RM1.24.

Note:
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, YeeLee.