Investment Merits – Continuous 20 Years of Profit Track Record since FY2000and trading at attractive PE of 7.2 with 50% upside
A stock to watch or take position at below 65 Sen level depending on your risk appetite with its 20 years of consistent performance delivering profits. Management’s confidence in its share price is reflected by the continuous share buybacks and purchase of shares by controlling shareholders in recent months.
At 59 Sen, it is trading on an attractive PE 7.2 based on FY 2020 EPS of 8.2 Sen (FY 2019 EPS was 8.71 Sen) despite 2 months of MCO affecting operation and business for FY 2020.
Based on Q4 EPS of 2.69 Sen achieved despite being affected by MCO, we estimated the FY 2021 EPS in the region of 10 Sen to 11 Sen. Using a prudent forward PE 9 to PE 12, its valuation based on 10 Sen EPS, could range from 90 Sen to RM1.20 and based on 11 Sen EPS, its valuation could range from 99 Sen to RM1.32 (using PE 9 and PE 12) respectively.
An attractive Co to buy in before Mr. Market notice it.
It is a very thinly traded share with only 271.9 mil shares issued. The top 30 shareholders hold about 186 mil shares or 68.6%. Do not chase as it would push up the price. Just buy on market weakness and accumulate investment overtime to keep for long term.
Investment Merits – Continuous 20 Years of Profit Track Record since FY2000
• Since its listing in 2000, Astino has always been making profit. From our research based on available records in Bursa, for last 17 years, since FY 2013, Astino has always delivered annual EPS of more than 7.22 Sen (which is the lowest in FY 2015) other than FY 2009 during Global Financial Crisis where the EPS was 7.08 Sen.
• Strong management with good corporate governance
• Strong balance Sheet with good operating cash flow of RM71 mil for FY 2020 (FY 2019 RM47 mil)
• Cash balance of RM65 mil (FY 2019 RM21 mil) which is equivalent to 23 Sen per share
• Net borrowing almost Nil, RM595K
• NTA of RM1.48 (Share price 59 Sen) and management in 2018 guided us that NTA based on revaluation of land and building could easily be more than RM2.00
• Land and buildings and vacant land at 31 July 2019 amounted RM173 mil stated at HISTORICAL COST. Land and building acquired prior to 2008 amounted RM133 mil (Ask yourself what is the valuation today? Price of Industrial Land in Penang had easily increased by more than 150% since 2008).
• Land held for future expansion and investment acquired from 2014 to 2019 amounted to RM40 mil included in above RM173 mil.
• New World class (1,700,000 sq ft) Plant in Changkat in Penang completed in 2018 and poise for expansion
• 9 Manufacturing Plants strategically located in Malaysia – Penang, KL, Malaka & Temerloh
In recent its Q4 announcement for the quarter ended 31 July, the Co reported a revenue of RM127 mil (FY 2020 RM521 mil) with a PBT of RM9.63 mil (FY 2020 RM28.1 mil) and net profit attributable to shareholders of RM 7.3 mil (FY 2020 RM22.3 mil) .
The EPS for Q4 was 2.69 Sen and FY 2020 EPS was 8.2 Sen. The Co also proposed a first and final dividend of 1.5 Sen for shareholder approval at AGM. The dividend yield is 2.5%. The Co has been paying dividend
PERFORMANCE REVIEW
Under difficult MCO environment, for the financial year 2020 (unaudited), the Group achieved higher revenue of RM521 million with a lower profit before tax (“PBT”) of RM28 million as compared to RM584 million turnover and RM32.5 million PBT achieved in Financial Year 2019. The FY 2020 EPS was 8.2 Sen (FY2019 8.7 Sen) and for Q4 the EPS was 2.69 Sen
Cash Flows And Liquidity The Group’s cash & bank balances had increased by RM44 million to RM65 mil and bank borrowing was decreased by RM8 million to RM66 mil as compared with financial year 2019 mainly due to decreased in inventories of RM37 mil and receivables of RM17 mil as compared with previous financial year.
The operating cash flow from operation amounted to RM72 mil (FY 2019 RM 47 mil)
The Group’s net debt to equity ratio is nil at the end of the current financial year. The Group’s strategy is to maintain a low gearing ratio via strict and cautious control over its capital resources in order to achieve long term business objectives and to maximise shareholders’ value.
Prospect Statement by the Board The volatile steel price and foreign currency has caused uncertainties in our pricing policies. In this regard, we will continue to closely monitor the changes in steel price in order to ensure that our profit margins are reasonably protected as well as our selling prices remain competitive. Barring any unforeseen circumstances, the Group will continue to strive for a commendable performance to maintain the Group’s competitiveness in the long term.
Brief Company profile
The Group is involved in the manufacturing and sales of metal building materials including metal roofing, c-purlin, small c-purlin, truss and batten, piping, scaffolding, slitting and levelling coil, agro facilities and its related products. The Group consists of ten subsidiaries and one associate company. The Group’s products are sold principally through its network of dealers in Peninsular Malaysia, Sabah and Asia Country. The Group’s products are mostly sold domestically (88%) where exports merely contribute 12% to the Group’s revenue. The Group’s mission is to supply our customers with Top Quality and Innovative Products at reasonable cost, in line with the nation’s aspiration of zero inflation and satisfying customer requirements through personalized, efficient and reliable services, and establishing a mutually rewarding relationship. Thus, the Group has set-up nine manufacturing plants to better service the increasing customer base. The plants are set up strategically at Sungai Bakap, Bukit Beruntung, Melaka and Temerloh to provide services for customer at different locations. The various plants also enable cost savings in transportation, effectively reducing cost of sales.
Company’s Products (Watch Corporate Video for understanding of Co Products) • Core Roofing Products – Metal Roofing Sheet and Building Products • Multi Truss and batten • Agro-House Multi System for Poultry Industry – Plastics Poultry Slab & Ventilation System https://www.astino.com.my/products/astino-agro-house-multi-system/
calvintan s early message thatAstino is affected by household roofing market is not correct. Astino is manufacturer of roofing for factory not for houses. malaysia is having a strong demand for factories nowadays , the only property sector that is doing well.mainly because of some re;ocation of factories from china and orders picked up from china us trade war
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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....
High5
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Posted by High5 > 2020-10-12 15:15 | Report Abuse
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