Business activities: poultry and retailing
Integrated supply chain
-consisting of feedmill, breeder farms, hatchery, broiler farms, layer farm, abattoir and retail stores
Stock information (as on 25/6/2022)
Number of share :630mil
Share price :RM0.585
Market capital :368.97 mil
-borrowing :44 million (short term:36.8 mil and long term:7.7mil)
-cash and equivalent :57.l mil
Revenue and profit (in million)
| 2018 | 2019 | 2020 | 2021 | 2022 (YTD) |
Revenue | 623 | 659 | 657 | 691 | 197 |
PAT | 27.9 | 33.6 | 36.0 | 24.8 | 11.1 |
Breakdown of profit (PBT)
| 2018 | 2019 | 2020 | 2021 | 2022 (YTD) |
Poultry | 7.1 | 11.1 | 7.9 | -5.8 | 1.4 |
Prawn | 0.9 | 1.9 | 0.6 | 0.9 | 0.2 |
Food services | 1.1 | 1.3 | 1.6 | 0.1 | 0.5 |
Retail | 26.9 | 28.3 | 34.0 | 35.5 | 11.8 |
Share of result from Gold coin Sdn Bhd | 4.1 | 5.3 | 6.5 | 5.5 | 1.9 |
Geographical presence
Majority of revenue (75%) is from Malaysia, while remaining 25% contributed from other countries (mainly from Indonesia).
Although only ~20% of revenue is contributed by Indonesia 2021, 74% of profit for year 2021 is from Indonesia.
Contribution from Indonesia market | 2019 | 2020 | 2021 |
Revenue | 16.25% | 17.69% | 20.20% |
Profit | 21.1% | 27.8% | 74.08% |
New facilities in Pontianak, Indonesia Jan 2021.
Latest capital commitment:
-acquired assets at a total cost of 3.1 mil
Had proposed acquisition of PT Bonaza for cash consideration of 33.74 mil (represent a PE of 8.7 time PAT of PT Bonaza) using a combination of internally generated fund and and bank borrowing. The gearing ratio expected to go up from 0.13 to 0.18 after acquisiton.
PT Bonanza is principally engaged in processing and freezing shrimp for local and export sales including principal products such as frozen raw shrimp, frozen cooked shrimp and frozen nobashi ebi shrimp
PAT for PT Bonaza for year 2020 is RM3.88mil.
Estimated finance cost of RM 1mil arising from proposed acquisition at an estimated interest rate of 7.5% per annum.
EGM for proposed acquisition: 29 June 2022
Completion of the proposed acquisition: July 2022
Dividen policy:
Internal dividen policy of paying 30% of PAT
Risks to business:
1. Increment of feed price
https://tradingeconomics.com/commodity/soybeans
https://tradingeconomics.com/commodity/corn
2. Increment in labour cost
3. Stengthening of USD vs Myr (as most feed ingredients were imported)
4. Government policy on
a. Ceiling price on chicken
https://www.straitstimes.com/asia/se-asia/chicken-prices-will-not-be-floated-malaysian-pm
b. Export ban
https://www.theedgemarkets.com/article/chicken-export-ban-starts-wednesday
https://www.scmp.com/news/asia/southeast-asia/article/3181673/malaysia-eases-chicken-export-ban-not-singapores-favourite
Strength
1. Integrated business
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