Saturday, 14 November 2015

Stock Review – KIMHIN(5371) (KIM HIN INDUSTRY BERHAD)


image source from Big Chart Marketplace

image source from Big Chart Marketplace
Bursa Malaysia - 5371
Bloomberg - KHI:MK
Yahoo - 5371 .kl
Webpage - http://www.kimhin.com.my/

Key Value Investor Criteria: -

Description
Value
Criteria
Point
Price to Tangible Book Ratio
0.57*
< 1
5/5
Stock Valuation
CAPM => 2.99%
Return (2008-2014) =>3.82 %
Undervalue by 0.83%
CAPM < Return
2/5
Return on Asset
2.19*
> 0
3/5
Return on Common Equity
5.33*
> 0
5/5
Quick Ratio
2.17*
>1
4/5
Long term Debt / Total Capital
1.88*
<50%
5/5
Continue Dividend over Past 10 Years / Since Inception
Yes
Yes
2/2
Cash From Operation
Positive > 5 years
Positive
5/5
Total Point


31/37
Note:
 *            Data obtain from Bursa Marketplace on 14/11/2015

By scoring 31/37 (83.78%), we will look into the annual report and the latest quarterly report of KIMHIN before making the decision to buy the stock.

Company Profile

KIMHIN is focusing manufacturing and sales of ceramic tiles. KIMHIN had manufacturing plants in Seremban (Malaysia), Kuching (Malaysia) and in China. Currently KIMHIN had operation sets up in four countries which are:
  1. Malaysia – Manufacture and sales (51.44% of 2014 profit)
  2. Australia – sales (30.47% of 2014 profit)
  3. China – manufacture and sales ( 18.88% of 2014 profit)
  4. Vietnam – sales

In May 2014, KIMHIN had acquired 100% equity interest of Norcos Industry Pty Ltd and change it to Kin Him Australia Pty. Ltd. With the acquisition, KINHIM is able to expand in Australia and New Zealand market. Besides that, KINHIM also obtain royalty – free licence to use the trademark of “Johson Tiles” for fifty year, a well-known ceramic tile name in UK. 

PROS:

  • KIMHIN had expand the market to Australia and New Zealand by acquired Norcos Industry Pty Ltd.
  • With the trademark of “Johson Tiles” which is a premium product selling at higher price. KINHIM might increase their revenue.

Financial Statement

By looking at the financial statement for the 2015 annual report and for the quarter ending 30 June 2015, KIMHIN has low amount of borrowing RM 9,696,000 compared to their cash equivalent in hand which is RM 47,922,000.

Besides that the operating cash flow generated for the first 6 months in 2015 (RM 31,373,000) is almost the same as the cash flow generated throughout the whole financial year of 2014 (RM 32,879,000).

PROS:

  • KIMHIN had low amount of borrowing.
  • Cash flow generated within the first 6 months is almost the same as the cash flow generated for the financial year 2014.

Shareholder

Besides Kim Hin (Malaysia) Sdn Bhd which owed 61.45% of the shares. KIMHIN also manage to attract foreign investor such as China Cruise Company Ltd (1.841%) & Yeoman 3 Rights (1.782%). If you guys follows my blog, you guy would notice Yeoman 3 Rights very familiar. Yes Yeoman 3 Rights bought AJIYA before the price shoot up 60%.

PROS:

  • KIMHIN able to attract foreign investor