Posted by Desa20201956 > 2016-01-18 09:39 | Report Abuse

First the turkey... JHM.....selling locally to Proton, Perodua. Directors say suffers from ringgit depreciation and cost inflation. Bad 3Q earnings, expected disastrous 4Q results ending Dec /2015 the Flower D & O...same business, but exports to premium brands , Directors very optimistic.............here is Public Research article. D&O Green Technologies - Riding On US Dollar Strength Author: PublicInvest | Publish date: Fri, 15 Jan 2016, 09:55 AM After suffering from three consecutive years of losses, D&O is poised to make a comeback with stronger earnings this financial year on account of i) the strong US dollar, ii) steady demand in automotive LED lighting, iii) continuous capacity expansion in its Melaka plants and iv) gradual exit from the consumer-based LED lighting business which faces intense competitive pressures. Due to the low base in FY14, we expect the Group to achieve strong double-digit earnings growth over the next two years. Our SOP-based TP of RM0.47 is mainly derived from D&O’s 58.7%-owned LED business, based on annualized FY15 PER of 36x. Background. D&O is principally involved in research & development, design and manufacturing of Light Emitting Diodes (LED) for i) automobiles, ii) general lighting and iii) televisions. The company, which was listed on the main market of Bursa Malaysia in December 2004, is led by the Goh family who are also major shareholders of Mega First Corporation. The automotive segment makes up 70% of D&O sales followed by general lighting (29%) and backlight units for televisions (1%). Strong balance sheet. As at 9MFY15, the Group’s net debt position stands at only RM9.8m and will turn into net cash of RM55m upon receiving RM65m from the recent disposal of a 10% stake in Dominant Opto Technologies. On top of that, the Group also has RM26m investments in quoted and unquoted shares. All-in, the collective amounts make up 26% of current market capitalization. Subsidiary company valued at PER of 36x or market value of RM650m. To recap, one of the world largest LED makers, Epistar (Market Capitalization: RM3bn) has recently taken up a 10% stake in D&O’s 68.7%-owned subsidiary, Dominant Opto Technologies SB for RM65m or a healthy annualized FY15 PER of 36x. Effectively, it values the subsidiary at RM650m or RM0.39 per share for D&O’s effective 58.7% stake, which is even higher than D&O’s existing share price. Net beneficiary of strong US dollar. D&O’s sales are predominantly in US dollars as its LED products are export-oriented with Asian markets making up 72% followed by Europe (20%), US (5%) and others (3%). Strong earnings outlook. Riding on the continuous capacity expansion and strong US dollar, D&O is expected to achieve admirable earnings growth of 30%-40% over the next 2 years. Coming from the low-base in FY14, 9MFY15 core earnings has already surpassed the previous year’s by more than 10-fold.