Low oil price will also reduce the cost of the "glue" used by board producers like Hevea & Evergreen.. which is about 60% from their production cost, as stated in the news link below.
From 25 sen to 39 sen plus 1 sen dividend. Is this not a meaningful movement before profitability improvement has been seen? i remember someone commented any movement upward wont be meaningful until improvement in profits. having bought in some at 30 sen, i have no regret now.
In latest annual report, Hevea highlighted they have been paying quarterly dividend without intteruption for 21 quarters, a good record i think Hevea is proud to uphold. Balance sheet shows high cash bal after bank loan about RM110 million. This support dividend payment of 4 sen per yr for 4 yrs. In addition a major source of cash flow from depreciation about RM25 million per yr. A review of past cash flow statement will prove this.
I agree with sense maker. They are still delaying the 1st Q results and the 2nd Q results to be announced in August can't be good. The earliest possible recovery will only come after that.
Fundamentally, I'm more worry about the focus of the company. How much effort are they putting into the mushroom business? Revenue from that sector is only 800+K p.a.. Less than 0.2% of the overall revenue. Not even enough to pay the directors' fees.
Earning per share was down from 30 sens in 2015 to a mere 2.5 sens in 2019 and they are still concentrating on the same cost saving efforts.
They are sitting on a huge cash pile but still dividend cut seems to be imminent.
take a look at P&O. you will notice that the company paid dividends 5 times a year for at least past 5 years when corporate earnings were much worse than Hevea. Hevea,with non cash expense from depreciation about RM25 million p.a., plus net cash balance more than RM118 million, dividend pmt of 4 sen seems sustainable. total number if shares x 0.04 = less than non cash expense of RM25 million.
Kon, I know where you are coming from, taking into consideration of depreciation, the company still have a net positive cash flow after dividend. However, I think the company will take the opportunity to reduce the dividend for the coming year. This happened to Pintaras Jaya, an excellent dividend paying company.
Not bad Q1 considering all those factors - China Zombie town in Q1 then South Korea strict social restriction plus Msia MCO started in March. Softer demand from Japan due to Zombie virus mood.
Everyone is awared off Q2 - Zombie Virus plus lockdown globally, more importantly 2H recovery so far will continue to improve due to no widespread of Zombie Virus in the countries served by Hevea such as China, South Korea & Japan.
Economy reopened since May. Waiting any weakness to top up.. Dividend is seemed sustainable moving forwards and it also seemed company is quite generous to distribute Dividend.
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sengkee
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Posted by sengkee > 2020-04-29 20:06 | Report Abuse
Low oil price will also reduce the cost of the "glue" used by board producers like Hevea & Evergreen.. which is about 60% from their production cost, as stated in the news link below.
https://klse.i3investor.com/m/blog/sinchew_company_story/225678.jsp