If one just looks at the result straight up, 1Q2016 IS quite disappointing. But if one looks deeper:
1. 1Q2016 PATAMI is RM20.6mil. That's already deduct out forex loss of RM5.9mil. If add it back, PATAMI before forex is RM26.5mil. 2. 1Q2015 PATAMI is RM20mil. It has forex GAIN of RM2.2mil. So PATAMI before forex is RM17.8mil. So 1Q2016 has seen an improvement of RM8.7mil, almost 50% improvement over 1Q2015. 3. 4Q2015 PATAMI is RM20mil. There is forex loss and impairment loss of RM3.5mil. So PATAMI before forex & impairment is RM23.5mil. I am not following their 4Q2015 announcement. Rather I'm taking their audited accounts for the year, deduct their 1Q to 3Q figures, balancing I assume is 4Q. But even if I use their 4Q2015 announcement figures, their PATAMI before forex & impairment is RM26mil.
No matter how you see it, 1Q2016 is BETTER than 1Q2015 and 4Q2015. It is in fact, better than any quarter of 2015. Bear in mind in 1Q2016, EVG is enjoying lower USD conversion to RM than when it was in 4Q2015 (around 4.3). 1Q2015 USD was around 3.6. In 1Q2016, it was around 4.1, an increase of 14%. But PATAMI before forex in 1Q2016 is 49% higher than 1Q2015.
So EVG has shown resilience in spite of falling USD. I think this quarter shows that EVG is not a pure USD play. Its projects to modernize/automate and reduce cost are bearing fruit. We are only seeing 1 project out of 4 having been completed. The other 3 will only bear fruit by 4thQ2016 and in FY2017.
hissyu2 Why do say EVG increased its debt? Total bank debt in 1Q16 is lower than 4Q15. It has used some long term debt to refinance its short term debts. That's why long term debt increased. This is healthier as the short term debts were used to fund machine purchases earlier on. Machines should be financed by long term debts to better match the machine's cashflow generation ability.
when MYR appreciated against USD from ~4.50 to ~3.90... many thought that strong USD is over... but i pointed out that I believe USD will still be strong against MYR... and when u look at today's conversion 1USD/4.12MYR... it proves that I was right then... export theme is not game over yet... I still own plenty of evergreen shares and HengHuat shares... let's see...
Valuation Maintain BUY recommendation, with unchanged TP of RM1.60 based on unchanged 11x FY17 EPS of 14.6 sen. We continue to like Evergreen for its strong earnings visibility (underpinned by low key input prices and management’s ongoing efforts to further improve operational efficiencies and product diversification). Source: Hong Leong Investment Bank Research - 23 May 2016
good to know that HL bank concurs with my opinion that it should be worth at least RM1.60-RM1.70... Good luck all of us... hope it will reflect its actual value in share price soon!
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....
AdCool
3,864 posts
Posted by AdCool > 2016-05-13 10:19 | Report Abuse
u start buying or selling then got trading loh. :)