http://klse.i3investor.com/servlets/staticfile/227888.jsp Signature International - Growth, its new signature dish Author: value_investor | Publish date: Tue, 22 Oct 10:16 | >> Read article in Blog website Target RM2.63 (Long Term: Out Perform)
The trend by property developers to provide built-in kitchens points to good growth over the next few years for Signature, the country's largest modular kitchen producer. The company is following up with more jobs, adding to an order book that is already at an all-time high. Its net cash could rise to RM0.65/share if it sells its Kota D'sara industrial land. We begin coverage with an Outperform rating and a target price of RM2.63, based on a 30% discount to our SOP value. Potential catalysts for the stock include the land sales and more major jobs secured over the next few quarters.
Its net cash could rise to RM0.65/share if it sells its Kota D'sara industrial land. We begin coverage with an Outperform rating and a target price of RM2.63, based on a 30% discount to our SOP value. Potential catalysts for the stock include the land sales and more major jobs secured over the next few quarters.
Largest modular kitchen producer Signature is the country's largest designer, manufacturer and retailer of modular kitchen systems, with more than 50% market share. Its customers are mainly from the domestic market, coming from both retail and project customers.
Bumper years ahead Signature's installation of modular kitchens and wardrobes only takes place after the main construction work is completed. This is usually 2-3 years after the property project is launched. The past few years have not been kind to Signature. After the 2008 global financial crisis, the domestic property market was soft in 2009-2010 and only started to recover from 2011 onwards. As such, Signature's turnover was on a declining trend since FY2009. However, the worst is over for the company. We see bumper years ahead. Due to the sharp rise in property prices over the past few years, property developers now include additional features such as built-in kitchens (especially for high-rise condos) to attract buyers. Being the largest player in the kitchen market, Signature naturally gets most of the major kitchen orders. The company's current order book is already more than RM200m, its highest ever and is currently following up with an additional RM600m jobs. Assuming a 30-40% success rate, Signature's order book could increase by RM180m-240m.
Strong balance sheet Signature's balance sheet is strong, with RM27.5m net cash (RM0.23 net cash/share) at end-June. Assuming that it completes the sale of its Kota Damansara industrial land over the next few months, its net cash could rise by RM50.4m to RM77.9m or RM0.65/share.
Circular/Notice to Shareholders SIGNATURE INTERNATIONAL BERHAD
Subject PART A - PROPOSED DISPOSAL BY SIGNATURE CABINET SDN BHD, A WHOLLY-OWNED SUBSIDIARY OF SIGNATURE INTERNATIONAL BERHAD, OF TWO PARCELS OF CONTIGUOUS LAND HELD RESPECTIVELY UNDER H.S.(D) 241037, PT 9926 AND H.S.(D) 241038, PT 9927 OF PEKAN BARU SUNGAI BULOH, DISTRICT OF PETALING, STATE OF SELANGOR MEASURING APPROXIMATELY 29,728 SQUARE METRES (OR EQUIVALENT TO 319,989 SQUARE FEET) TO PURPLE HEIGHTS SDN BHD, A WHOLLY-OWNED SUBSIDIARY OF MEDA INC. BERHAD, FOR A TOTAL CONSIDERATION OF RM75,200,000 TO BE SETTLED PARTLY IN CASH AND PART PAYMENT IN KIND
PART B - PROPOSED NEW SHAREHOLDERS' MANDATE FOR RECURRENT RELATED PARTY TRANSACTIONS OF A REVENUE OR TRADING NATURE Attachments
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....
Asria
263 posts
Posted by Asria > 2013-10-17 10:24 | Report Abuse
Any news