Rubber hose manufacturer, Wellcall Holding Berhad just released its quarter report today.
Revenue and net profit increased 11.2% and 38.44% respectively compared with corresponding period last year. Gross margin and net profit margin improved to 31.5% and 20.4% respectively. Lower material cost, favourable foreign exchange gain and higher utilisation of production capacity are the main causes for the improved performance. Quarter EPS is 5.43 cents.
However, if compared with previous quarter, the group actually recorded a dip in net profit which was not in line with the increase in revenue. The report stated that decrease in the bottom line are mainly because the group is more aggressive in their pricing strategy to secure new customers and new market segment. It will help them to have a better preparation in terms of purchase order and forecast in view of the additional production capacity once the new factory is in operation.
In terms of balance sheet, everything stayed normal with a net cash position and no borrowings at all. Operating cash flow remained strong, or even better with better control in working capital changes. The group also spent around RM5 mils in capex this quarter which is consider higher compared to previous few quarters.
Export market still the main contributor with 89.5% contribution to the group's revenue, while the rest came from locally. With the stronger USD nowadays compared to previous quarters as well as the continue dropping trend of rubber price will benefit the group directly. The tariff hike starting in Jan should have pose no problem for the group as electricity cost contributed quite small to the total production costs. The report did not update the progress of the new factory, but based on previous report, the new factory will be ready at the first quarter next year. Hopefully no delay.
Hopefully, the group able to record at least 5.0 cents EPS for the remaining quarters given the favourable circumstances.
5.0 cents quarter dividend being declared, on track to have at least 20 cents full year dividends to support its high PE and share split will be done at the end of March later.
Can I say well done, wellcall? But I know your PE is quite high ... can you give me some discounts, pls?
beautiful668
They said new factory will start commerce in July or Aug 2015 .
2015-02-26 19:38