Eng Kah Corporation Bhd ("Engkah") is involved in the manufacturing and sales of personal care products (such as cosmetics, skin care, perfume and toiletry products) and household products (such as bathroom and floor cleaners)
Past Financial Results
From the 10-year P&L summary below, we can see that the company has been consistently profitable, though the revenue and profit eased off in the past 3 years. Its 6-year Cash Flow is positive and it paid out a steady stream of dividend.
Diagram 1: Engkah's 10-Y P&L and 6-Y CF (Source: ShareInvestor.com)
Financial Highlights
From the Diagram below, we can see:
1. Though PER is relatively high at ~20times, DY is good at 10%!!
2. Though revenue dropped, net profit margin is good at 10-15%.
3. ROA & Assets Turnover dropped sharply over the past 1-2 years.
4. Financial position is string with no/little borrowings and current ratio at 5-6 times.
Diagram 2: Engkah's Financial Highlights (Source: ShareInvestor.com)
Technical Outlook
Engkah is in a downtrend with tentative sign of bottoming. It tested its psychological support at RM2.00 and rebounded. I believe the RM2.00-2.10 would continue to be strong support for this stock.
Chart 2: Engkah's monthly chart as at Feb 23, 2015 (Source: ShareInvestor.com)
Conclusion
Based on strong financial position, Engkah is a stock worth considering for long-term investment. However, its technical outlook is still mildly negative (albeit tentative signs of bottoming) and its financial performance is still showing weaknesses.
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, Engkah.
No comments:
Post a Comment