Sunday, 20 September 2015

Stock Review – FIMACOR (3107) -2 (FIMA CORPORATION BERHAD)

Bursa Malaysia - 3107
Bloomberg - FMB:MK
Yahoo - 3107 .kl


Income Statement

Despite higher revenue, the higher expenses has bring the net profit after tax decrease from RM 71,994,000 to RM60,305,000. Besides that, there is a revaluation of property, plant and equipment of RM 18,884,000 state for other comprehensive income which does not stated in the income statement for previous years. If these money is remove from the income statement, FIMACOR earning per shares for the year ending will be must lower compared to previous year.

CONS:
  • Decrease of net profit despite higher revenue.
  • RM 18,884,000 stated in other comprehensive income.


Financial Statement

The revaluation surplus on FIMACOR leasehold land is RM 25,144,000 which is 83.21% of the 2014 leasehold land value. The valuation method use comparison of the recent asking price which is less accurate, reference to bidding price or transaction price are better estimation of the land current value. Besides that, the valuation of land uses annual inflation of 7% - 14% while data from the world bank show that Malaysia inflation rate is 3%.
There is  increase of Goodwill on consolidation from RM 510,000 to RM 6,200,000 and the cash equivalent decrease to RM 172,640 to RM 195,204,000.

Although there is an increase in the trade receivable from RM 105,071,000 to RM 182,856,000, but the trade receivable from the biggest customer (Malaysia Government) is also increase from RM 75,980,000 to RM 146,673,000 and the trade receivable past due from RM 52,831,000 to RM 128,527,000. Other than that, the trade payable for FIMACOR also increase from RM 72,887,000 to RM 127,887,000. Finally the Operating cash flow of the company is also decrease from RM 62,998,000 to RM 32,666,000.

CONS:
  • The leasehold land revaluation use the asking price as a reference which is less accurate, bidding price or the transaction price are the more conservative method.
  • The discount cash flow method for leasehold land valuation assume inflation rate of 7% - 14% while the world bank data show inflation rate in Malaysia only around 3%
  • Increase of Goodwill to RM 6,200,000 which the management able to impair anytime.
  • Decrease on the FIMACOR cash equivalent.
  • Trade receivable which had past due had increase from RM 52,831,000 to RM 128,572,000 (143%)
  • Trade payable increase from RM 72,887,000 to RM 127,887,000 (75.46%)
  • Operating cash flow decrease from RM 62,998,000 to RM 32,666,000