OngMali
3 reasons why you should load up on this cash rich stock!
Reason 1 - Great time is just around the corner
Average USD/MYR had gone up 8% from 4.0171 in Q2 2016 to 4.3305 in Q2 2017.
Q2 2016 net profit to shareholder was RM4.64 mil.
Assume constant sales of RM52.74 mil in Q2 2017, an additional RM4.11 mil flows direct to bottom line. Bear in mind sales grew 11% last year.
In other words, net profit to shareholder should grow 88.6% in Q2 2017! Almost the same with Q1 2017.
Reason 2 - Further expansion in US
In Annual Report 2016 dated April 2017, Focus Lumber disclosed it will continue to expand in US. it is in a position to procure more customers from the lucrative RV market.
The group is confident revenue and profit will improve.
Revenue improved every year for last 5 years from Rm132 mil to RM201 mil.
Reason 3 - Bumpy Dividend coming soon
I forecast net profit to shareholder at RM25 mil. Operating cash flow was RM24.88 mil in Q1 2017. Yes, Q1 only, not whole year.
Focus Lumber disclosed new information in Annual report 2016. "Our cash requirements, other than for operating purposes, are primarily for additions to property, plant and equipment, acquisitions and payment of dividends."
The group estimates capex of RM5 mil to improve manufacturing facilities. That leaves a balance of RM20 mil for payment of dividends.
Focus Lumber has 103.2 mil shares outstanding.
RM 20 mil divide 103.2 mil equal 19 sen. At 1.74, dividend yield is 11%!
Dont forget Focus Lumber had RM1.07 per share net cash. I won't rule out a special dividend of 30-50 sen. Do your own math.
This is not a buy recommendation. Consult your own investment adviser before you invest.
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4 people like this. Showing 21 of 21 comments
KYY is not a major shareholder. Check the annual report 2016. There are new value shareholders.
2017-07-02 00:44
YA GOOD POINT...WHERE TO FIND THIS TYPE OF GOOD COMPANIES ?
VERY RARE AND VERY FEW LOH !....IF U CAN BUY....BETTER LOAD UP WHILE IT IS STILL CHEAP LOH...!!
2017-07-02 10:33
IF U WORRY RINGGIT UPTREND....RAIDER RECOMMEND U THIS 2X HEDGE INVESTMENT STRATEGY LOH....!!
U BUY FOCUS LUMBER FOR ITS EXPORT.
U BUY HRC/PETRON FOR ITS IMPORT LOH.
THE ABOVE COMPANIES ARE BOTH HIGHLY PROFITABLE, IF U INVEST BOTH U HEDGE THE CURRENCY EXPOSURE...LEAVING U INVESTMENT IN 2 HIGHLY PROFITABLE COMPANIES MINUS THE FEAR OF CURRENCY MOVEMENT LOH...!!
2017-07-02 10:37
now a days ppl simply tembak.
I have been waiting for 1.40 since last yr, also no seller..
2017-07-02 12:05
RM25 mil operating cashflow you mentioned and extrapolated is not operating.
If PBT is RM8 mil, how can cashflow be so high as RM25 mil?
It's from collection of receivables, not something recurring every Q.
This is very misleading.
2017-07-02 12:15
It is not misleading, just that people do not know how to interpret mah...!!
This flb generate net cashflow excluding working capital about rm 20m...thus give free cashflow per share about rm 0.20 loh...!!
Meaning assuming it pays div rm 0.10....the balance sheet cash will grow rm 0.10 loh...!!
2017-07-02 12:20
Prolexus show poor QR. What's next?
Posted by slts > Jul 2, 2017 08:30 AM | Report Abuse
RM on gradual uptrend. stay away from export stocks
2017-07-02 13:38
No need to forecast dividend mau Mari Akan Mali......important npm is double digit....
2017-07-02 14:09
Prolexus show poor QR. What's next?
Posted by slts > Jul 2, 2017 08:30 AM | Report Abuse
RM on gradual uptrend. stay away from export stocks
HOW COME MAGNI TECH RESULT SO GOOD WHILE PROLEXUS NOT SO GOOD LEH ?
NEED TO FURTHER INVESTIGATE THE REASON WHY LOH....!!
2017-07-02 14:12
Export counter must choose LIIHEN loh, dividend yield above 6% and revenue and profits keep increase year by year
2017-07-02 17:04
Great graphical illustration on Focus Lumber
https://klse.i3investor.com/blogs/kakashit/125994.jsp
2017-07-02 22:50
sometime cash rich also cant help much..KFIMA also cash rich but their biz stagnant..
2017-07-03 08:54
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4.9 / 5.0
This book is the result of the author's many years of experience and observation throughout his 26 years in the stockbroking industry. It was written for general public to learn to invest based on facts and not on fantasies or hearsay....
shareinvestor88
KYY is selling. Share price wont go up
2017-07-02 00:26