Accumulated few more lots... It is almost a year holding few lots of YL and the share was up about 10% ( excluded dividend). The fundamental of this counter is good and it should be way better than many counters.
YEE LEE CORP BHD By UOBKayHian Research Buy (maintained) Target price: RM2.90 DESPITE discouraging Red Bull sales in 2016, UOBKayHian Research said it expected Yee Lee Corp Bhd’s trading segment to remain intact. In its published note, UOBKayHian said under the trading segment, the collective sales of all non-Red Bull products rose 12% year-on-year (y-o-y) in 2016. These products include Spritzer, cooking oil, Campbell soup and Old Town. Yee Lee’s consumer staples-focused business remains largely resilient, with earnings growth driven by the manufacturing division and improved efficiency in the aerosol can business. Yee Lee is currently trading at an undemanding 9.2 times 2018 forecast price-to-earnings (PE), but the research house maintained its ‘buy’ call and target price of RM2.90. It said despite near term softness in consumer sentiment, Yee Lee’s businesses remained intact. UOBKayHian said the weakening crude palm oil prices could create earnings upside due to the less-elastic selling prices of bottled cooking oil and vice versa. On Red Bull’s revenue, Yee Lee said it was positive on matching at least 2016’s revenue performance for 2017. “The company is taking measures to increase network coverage, which include a RM2mil investment in chillers. “Since the inclusion of Red Bull in its portfolio, Yee Lee added close to 10,000 new customers, bringing its client base to 40,000,” said UOBKayHian. The research house, adding that that it now estimated Yee Lee to achieve 3% y-o-y sales growth each in 2017 and 2018. Despite slower sales, PBT margin for Red Bull was intact at 6% to 7%. Apart from improved capacity and efficiency in Yee Lee’s aerosol can division, UOBKayHian expected the company’s sales growth in Vietnam to outpace Malaysia, given the country’s 100 million population.
Recently, Spritzer's share price moved up from 2.30+ to 2.50. It could be due to the oversea sales have been achieved satisfactory result. Spritzer's result will contribute positively to Yeelee as YL holds more than 30% of Spritzer. Though, YL's dividend yield still below FD rates, but once free cash flow (Operation cash flow - CAPEX) increases to certain level, they will propose better dividend to loyalty shareholders. I believe this FY will see better result for YL as well as Spritzer.
Riskabsorber, my dividend yield is approx. 6% because I have Yee Lee since 2012. Spritzer's export market is small to contribute significantly at the moment
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....
riskabsorber
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Posted by riskabsorber > 2017-03-17 15:45 | Report Abuse
KYY does not hold Yeelee, since this industry is totally new to him.