Saturday, 16 September 2017

Stock Review – CHINWEL(5007) - 2 (CHIN WELL HOLDINGS BERHAD)

Bursa Malaysia - 5007
Bloomberg - CWH:MK
Yahoo - 5007 .kl
Webpage - http://www.chinwell.com.my/


Company Profile

CHINWEL had over 28 years of experience (since 1989) of manufacturing and supplying high quality carbon steel fasteners (ie screw, nuts and bots). Chinwel had production facilities in Malaysia and Vietnam.

1) Customer Information :

According to CHINWELWebpageCHINWEL had exporting to:

1) Europe (60%)
2) USA (30%)
3)  Japan (5%)
4) South East Asia (5%)

2) Products:
CHINWEL consists of two main products:

1) Fastening Products (81.86 %)
2) Wire Product (18.13 %)

Fastening Product

This division mainly focus on manufacturing and trading of screws, nuts, bolts and other fastening products. This division had contribute lesser revenue 81.86 % of total revenue in 2016 compare to 83.36 % in 2015 and 97.22 % in 2014.

The revenue per segment asset for fastening products in the year 2016 is 0.8.

Wire Product

This division focus on manufacturing of precision galvinized wire, annealing wire, bright wire, hard drawn wire, PVC wire, bent round bar and grill mesh. This division had contributed more revenue (18.13%) of total revenue in 2016 compared to 16.40 % in 2015 and 3.58 % in 2014

The revenue per segment asset for wire division in the year 2016 is 0.99.
PROS:
è The revenue for CHINWEL is less dependent on one product which is the Fastening Product.
è The increment of revenue depend on the wire product is a good sign since the wire product division is giving more revenue per segment asset.

Financial Statement


From 2016 Annual Report there is reduce in trade receivables although the revenue for 2016 had increase from RM 502, 420,132 in 2015 to RM 508,134,234 in 2016. These mean there are more cash transactions compared to credit transaction.

Besides that, the cash and bank balances had increase by 2.41 times from RM 55,163,100 to RM 132,961,612 which mean the management had more cash to look for better investment opportunity.

PROS:
è More cash transaction in 2016.
è Increase of cash and bank balances by 2.41 times.


CHINWEL had settle the amount due to the shareholder of Asia Angel Holding Limited which CHINWEL had acquired in 2015. Hence the RM 19,261,124 had been remove in the 2016 balance sheet.
Dividend and Bonus Issued for the past five year
CHINWEL had constant dividend for the past five year from 2012 – 2016 with the average dividend of RM 0.049 per year which dividend yield of 2.8%..

CONS:
è CHINWEL had low dividend yield compared to current bank fix deposit rate of 3%.