Saturday, 21 October 2017

Stock Review – AJIYA (7609) - 4 (AJIYA BERHAD)

Bursa Malaysia - 7609
Bloomberg - AJY:MK
Yahoo - 7609 .kl
Webpage - http://www.ajiya.com/


Company Profile

AJIYA started as manufacturing metal roll products in 1990 and ventured into safety glass productions in1996. AJIYA holds 19 factories / warehouses with office throughout Malaysia and Thailand.

Geographical Location

AJIYA operated in two countries Malaysia and Thailand. Base on 2016 annual report, most revenue are coming from Malaysia operation which is 93.05 %.

The operation in Thailand did not do as well compared to Malaysia as report in 2016 Annual report operation in Thailand had asset turnover ratio of 0.53 compared to operation in Malaysia which had asset turnover ratio of 0.89.

CONS:
è Operation in Thailand had low asset turnover ratio


Financial Statement


AJIYA annual report show that an increase in other investments from RM 205,149 in 2015 to RM 5,069,571 in 2016. This is due to increase in investment on the trust fund of RM 4,914,987 in 2016.

There is an decrease in the amount due from subsidiaries from RM 53,346,219 to RM 31,781,230 in 2016. This is due to the settlement of RM 13,972,818 which carry an interest of 2.90% per annual.

Although the inventories had drop from RM 80,829,535 to RM 70,926,380, there is an increase of work in progress inventories which mean the company is expecting high sales in 2017. The work in progress inventories had increase from RM 352,625 to RM 720,990 in 2016. Besides that, the raw material cost had reduced from RM 71,262,606 to RM 62,695,916.
AJIYA trade receivable past due also had reduce from RM 56,510,388 to RM 48,629,683.

During the financial year, two subsidiaries of AJIYA had enter a sales and purchase agreements for the sales of lands and building for total consideration of RM 13,876,000 which stated in 2016 annual report as asset held for sales of RM 6,895631.

PROS:
è Work in progress inventories had increase by 104.46 %
è Raw Material cost had reduce by 12.02 %
è Trade receivable past due had reduced by 13.94 %

CONS:
è RM 4,914,987 had invest in a trust fund

AJIYA loan and borrowing had reduce from RM 29,959,973 to RM 9,667,968 in 2016.

PROS:
è AJIYA loans and borrowings had reduced by 67.73 %

Financial Ratio
Description
2016
2015
Different
Gross Profit Margin
0.20
0.21
-0.01
Net Profit Margin
0.05
0.07
-0.02
Interest Coverage Ratio
27.68
18.80
+8.88
Effective Tax
0.22
0.17
+0.05

Warrant

In 2016 AJIYA had issue free one warrant to every 2 shares with the exercise price of RM 0.92. The warrant can be exercised at any time on or after 1st September 2016 until 2021. As of 21 February 2017 157,292,242 warrant is available.

PROS:
è AJIYA warrant is way out of money compared to current price of RM 0,68.

Dividend and Bonus Issued for the past five year

AJIYA had constant dividend for the past five year from 2012 – 2016 with the average dividend of RM 0.01 after adjustment (2016 stock split) with the dividend yield of 1.47 %.

CONS:
è AJIYA had dividend yield of average 1.47 % for the last five year which is lower than fixed deposit rate of 3 %
Peers
1) CHINHIN
2) ENGTEX
3) WTHORSE
4) SEACERA
5) ASTINO
6) KIMHIN
7) GBH
8) SCBUILD
9) SKBSHUT
10) WOODLAN