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Stock Review – WTK(4243) - Klse Value
Saturday, 13 February 2016
Bursa Malaysia - 4243
Bloomberg - WTKH:MK
Yahoo - 4243 .kl
Webpage - http://www.wtkholdings.com/
Key Value Investor Criteria: -
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Description
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Value
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Criteria
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Point
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|
Price to Tangible Book Ratio
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0.52*
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< 1
|
5/5
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Return on Asset
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1.36*
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> 0
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3/5
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|
Return on Common Equity
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3.11*
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> 0
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3/5
|
|
Quick Ratio
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1.61*
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>1
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3/5
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|
Long term Debt / Total Capital
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25.13*
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<50%
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3/5
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Continue Dividend over Past 10 Years / Since Inception
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Yes
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Yes
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1/1
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Historical Dividend Yield
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2.1%
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>3%
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0/2
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Cash From Operation
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Positive > 5 years
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Positive
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5/5
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P/E
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18.25
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10
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0/2
|
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Total Point
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|
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23/35
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Note:
* Data obtain from Bursa Marketplace on 14/2/2016
Company Profile
WTK had four major business segments as follows:
1) Timber (80.92% of 2014 revenue)
2) Manufacturing and trading (17.96% 0f 2014 revenue)
3) Plantation (0.56% of 2014 revenue)
4) Offshore Support Vessel (new business)
1) Timber
This division extract and sale timber, manufacture and sale plywood, veneer and sawn timber. This division have log pond, sawmill in Sarawak. This division start in 2007 and contributed the most revenue to the company in 2014. The top three country which this division export round logs to are India (73%), China (15%), Vietnam (8%). While the major plywood products were Japan (81%), Taiwan (18%).
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PROS:
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CONS:
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2) Manufacturing and trading
This division manufacturing and trading of aluminium foil. This division just upgraded to comply with FSSC 22000 quality certification for food product packaging this might attract more customers to do business with WTK. The lower on demand for foil and flexible packaging will affect the revenue of the company.
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PROS:
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|
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CONS:
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3) Plantation
WTK had 11,800 hectares of oil palm plantation but only 1,300 hectares are matured in 2014 annual report. Due to the low FFB and palm oil price these division is making loss in 2014 and up to 3rd quarter of 2015.
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PROS:
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CONS:
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4) Offsore Support Vessel
This is a new business for WTK which operating in 2014. From the 3rd Quarter 2015 financial report. This investment has contributed profit to the company.
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CONS:
|
|
Financial Statement
From the annual report 2014, WTK had increase the investment in associate from RM 0 to RM 70,377,000. Of the RM 70,377,000, RM 53,465,000 is Goodwill. In the 2014 report there is an increase in other investment from RM 1,312,000 to RM 12,752,000. This is mainly because there is an increase in investment in preference share.
Base on 3rd Quarter 2015 report, current borrowing for WTK is RM 203,259,000 however WTK had enough cash reserve to cover these borrowing and loan.
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PROS:
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CONS:
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Director and Shareholder
WTK is a family business run by the Wong family who lead by Pemanca Datuk Wong Kie Yik. Pemanca is a title given by the State Government of Sarawak as a leader just below the Temenggung. He is actively involves in the Malaysia Timber Industry and Chairman of Sarawak Timber Industry.
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PROS:
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Conclusion
After the review on WTK, WTK is currently undervalue base on the assets they have in 2014 report. Although P/E of WTK is high 18.25 on reporting time, there is still future earning from the plantation division once more palm oil tree is mature and from the offsore support vessel operation. I believe the Wong family is going to helm this company out from the bad times and improve the earning. Hence I will recommend BUY to these company.
http://ivkls.blogspot.my/2016/02/stock-review-wtk4243.html
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Discussions
2 people like this. Showing 9 of 9 comments
It meets all the criteria for a fund manager stock......
For my portfolio, I have higher criteria.
2016-02-14 22:33
Industry insider says production of logs low due to state govt clampdown on logging quote, fyi.
2016-02-14 22:39
Desa, still game on airasia? Dr. neoh eps estimated 0.50 someone shared....hmmmm, old info maybe??
2016-02-15 01:33
I bot AAX at 18 -19 sen but have to sell to buy other stuffs.
Turns out to be a bad decision.....I cannot make u turn now at this price.
2016-02-15 01:58
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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....
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2016-02-14 22:10