KUALA LUMPUR, Jan 7 (Bernama) -- Bursa Malaysia’s benchmark index rebounded from earlier losses to close at its intraday high on Wednesday, gaining 0.27 per cent in late trading as buying interest returned to selected heavyweights. At 5 pm, the FTSE Bursa Malaysia KLCI (FBM KLCI) advanced 4.48 points to 1,676.83 from Tuesday’s close of 1,672.35. The benchmark index opened 0.88 of-a-point lower at 1,671.47 and subsequently hit a low of 1,665.94 during the mid-morning session before gaining momentum toward closing. On the broader market, losers led gainers by 565 to 512, while some 526 counters were unchanged, 1,046 untraded, and 10 suspended. Turnover improved to 2.73 billion units worth RM2.76 billion versus Tuesday’s 2.66 billion units worth RM2.76 billion. Dealers said that investors were cautious following geopolitical developments in Asia.
Hup Seng Industries Berhad increased by 3.88% to close at RM1.34.
The stock has a low beta of 0.61 and of low volatility.
The company mainly manufactures biscuit such as cream crackers, crackers, marie biscuits, cookies for domestic and export markets.
While the company is currently trading at P/E of 20.64 which is on the high side, Hup Seng has a very strong balance sheet. The company has zero borrowing and and is cash rich with RM115.3 million as of the latest quarter report.This is very good especially in turbulence time. It is also not affected by a lot of speculators given that the volume is rather stable and low. It is definitely a counter that one could consider for the long term.
The company is also giving out dividend on a consistent manner, which is about 4.1% in yield.
The company's latest earnings report were in November. The 3QFY2015 report shows revenue grew 10% to RM206.8 million, driven by both domestic and export market. Cream crackers continued to be the strong performer for the Group. Profit before tax on the other hand jumped 51% to RM52.9 million. The increase in profit was largely due to improved sales margin brought about by lower input costs, weaker Ringgit and successful modification in the pricing strategy.
I personally love this stock and the management team who have proven themselves historically. The negative side of choosing this counter could be the lack of liquidity as the stock is not as liquid as other stocks that were heavily traded. The valuation with P/E of 20.64 is slightly on the high side but I think given the reliability of the management team, the premium paid for the stock is well justified. Definitely a counter to hold for the long term, say 5 to 10 years in my view.
DISCLAIMER: This is just an analysis of the stock based on our own opinion. We do have a bit of holding in Hup Seng Industries Berhad.
 |
| HUP SENG's cream crackers |
The stock has a low beta of 0.61 and of low volatility.
The company mainly manufactures biscuit such as cream crackers, crackers, marie biscuits, cookies for domestic and export markets.
While the company is currently trading at P/E of 20.64 which is on the high side, Hup Seng has a very strong balance sheet. The company has zero borrowing and and is cash rich with RM115.3 million as of the latest quarter report.This is very good especially in turbulence time. It is also not affected by a lot of speculators given that the volume is rather stable and low. It is definitely a counter that one could consider for the long term.
The company is also giving out dividend on a consistent manner, which is about 4.1% in yield.
The company's latest earnings report were in November. The 3QFY2015 report shows revenue grew 10% to RM206.8 million, driven by both domestic and export market. Cream crackers continued to be the strong performer for the Group. Profit before tax on the other hand jumped 51% to RM52.9 million. The increase in profit was largely due to improved sales margin brought about by lower input costs, weaker Ringgit and successful modification in the pricing strategy.
I personally love this stock and the management team who have proven themselves historically. The negative side of choosing this counter could be the lack of liquidity as the stock is not as liquid as other stocks that were heavily traded. The valuation with P/E of 20.64 is slightly on the high side but I think given the reliability of the management team, the premium paid for the stock is well justified. Definitely a counter to hold for the long term, say 5 to 10 years in my view.
DISCLAIMER: This is just an analysis of the stock based on our own opinion. We do have a bit of holding in Hup Seng Industries Berhad.
Comments
Post a Comment