Stock Review – JOHOTIN (7157) (JOHORE TIN BERHAD)

 

Bursa Malaysia - 7167

Bloomberg - JOHO:MK

Reuters -  JHTN.KL

Webpage - http://www.johoretin.com.my/

Yahoo - 7167.kl

Sector            : Consumer Products & Services

Sub Sector    : Food & Beverages

Focus             : Tin & Dairy Products

Company Profile

Johore Tin Berhad (JOHOTIN) was incorporated in Malaysia on 22nd November 2020. JOHOTIN involved in two segments:

1. Tin Cans Manufacturing

• 21.72 % of 2020 revenue

• Manufacturing of various tins, cans and other containers and providing tin plate services.

• Most customer are locally base, with minor market shares in Singapore

• Customer base consists of various industries mainly in biscuits, paint and chemical, edible oil and food processing industries.

2. Food & Beverage 

• 78.28 % of 2020 revenue

• Manufacturing and selling of milk and other related dairy products, as well as packing and trading of all types of dairy products.

• Dairy products comprise of sweetened condensed milk, evaporated milk and milk powder with the brand name Able Farm, Able LAC, Able Mama.

• 80 % of the dairy products are exported, mainly to West Africa, South East Asia Region and American Continent.

Income Statement

	31 Dec 2020	31 Dec 2019	31 Dec 2018	31 Dec 2017	31 Dec 2016
Revenue	502,260,000	579,790,000	501,120,000	474,550,000	441,200,000
Cost of Goods Sales	370,530,000	439,340,000	385,000,000	377,730,000	331,180,000
Earning Before Tax	53,220,000	60,520,000	48,350,000	33,580,000	46,790,000
Nett Profit	39,840,000	48,190,000	36,560,000	25,830,000	35,440,000
5 Years CAGR of Revenue					2.63 %
5 years CAGR of Nett Profit					2.37 %

JOHOTIN revenue had increased for the year 2016 to 2019 with a CAGR of 7 % before the Convid 19 pandemic. In 2020 the revenue had dropped from RM 579,790,000 in 2019 to RM 520,260,000, a drop of 10.23 % due to the factory being unable to operate at full capacity during Movement Control Order by Government of Malaysia in March 2020.

From the Q1 2021 financial report, JOHOTIN is recovering from the drop in revenue due to pandemic in 2020. Despite lower revenue in Q1 2021 the profit from Q1 2021 is on par with the profit before the pandemic due to higher profit margin.

Balance Sheet

	31 Dec 2020	31 Dec 2019	31 Dec 2018	31 Dec 2017	31 Dec 2016
Account Receivable	89,092,975	97,784,025	112,953,453	79,567,756	83,501,184
Percentage of Account Receivable Past Due	25.15 %	28.15 %	33.88 %	32.66 %	33.18 %
Total Debt	44,990,000	49,470,000	32,410,000	43,890,000	67,660,000
D/E	0.13	0.15	0.10	0.15	0.30
Current Ratio	2.94	2.79	2.51	2.92	2.14
Cash / Current Asset	32.96 %	26.60 %	23.38 %	31.36 %	26.40 %

JOHOTIN percentage of account receivable past due had reduced from 33.18 % in 2016 to 25.15 % in 2020. Asides that, JOHOTIN total debt and debt to equity ratio had also reduced. JOHOTIN has a strong current ratio of 2.94 in 2020 while 32.96 % of the current assets are cash.

Cash Flow

	31 Dec 2020	31 Dec 2019	31 Dec 2018	31 Dec 2017	31 Dec 2016
Cash Flow from Operation	48,300,000	43,810,000	41,580,000	20,340,000	81,610,000
Cash Flow from Investing	-810,000	-29,300,000	-31,480,000	-17,010,000	-9,750,000
Cash Flow from Financing	-21,110,000	-8,150,000	-25,970,000	21,480,000	-45,580,000
Free Cash Flow	46,650,000	30,360,000	18,180,000	3,180,000	71,210,000
5 years CAGR of Cash Flow from Operation					-9.96 %
5 years CAGR of Free Cash Flow					-8.11 %

JOHOTIN CAGR of cash flow from operation is -9.96 % and CAGR of free cash flow is - 8.11 %.

Per Share Analysis

	31 Dec 2020	31 Dec 2019	31 Dec 2018	31 Dec 2017	31 Dec 2016
Share Outstanding	307,560,000	310,470,000	310,470,000	310,470,000	248,810,000
Price 31 Dec	2.01	1.73	0.96	1.21	1.23
BV/Share	1.12	1.06	0.98	0.90	0.86
P/E	15.52	11.15	8.15	14.54	8.64
5 years CAGR of Price					10.32 %

JOHOTIN had lower book value per share compared to its current price. Asides that its price had increase with CAGR of 10.32 % while its free cash flow had decrease with CAGR of -8.11 %.

Dividend

	31 Dec 2020	31 Dec 2019	31 Dec 2018	31 Dec 2017	31 Dec 2016
Dividend Per Share	0.054	0.064	0.05	0.04	0.04
Dividend Payout	41.69 %	41.23 %	42.46 %	48.08 %	28.08 %
Dividend Yield	2.69 %	3.70 %	5.21 %	3.31 %	3.25 %
10 year Malaysia Government Bond	2.68 %	3.33 %	4.01 %	3.94 %	4.24 %

JOHOTIN has a dividend payout of around 40 % and dividend yield match with 10 year Malaysia Government Bond.

Dupoint Analysis

	31 Dec 2020	31 Dec 2019	31 Dec 2018	31 Dec 2017	31 Dec 2016
Net Profit Margin	7.93 %	8.31 %	7.30 %	5.44 %	8.03 %
Asset Turnover	1.07	1.28	1.13	1.20	1.27
Equity Multiplier	1.32	1.33	1.41	1.36	1.54
Return of Equity	11.19 %	14.16 %	11.63 %	8.91 %	15.78 %

Net Profit Margin of JOHOTIN is around 8 % over the 5 years except 2017. Net profit margin for 2020 stayed around 8 % despite convid 19.

Asset turnover of JOHOTIN had reduced from 1.28 in 2019 to 1.07 in 2020 maybe due to convid 19. Asset turnover of JOHOTIN might increase after the recovery of the economy.

Equity Multiplier or Financial Leverage of JOHOTIN had decreased from 1.54 in 2016 to 1.32 in 2020 which means the company had reduced its debt over the five year.

Growth Rate

5 year average ROE (AROE)	12.33 %
5 year average dividend payout ratio (ADPR)	40.31 %
Ground Rate (GR = AROE x (1-ADPR))	7 %

JOHOTIN had growth rate of 7 %

Capital Asset Pricing Model (CAPM)

Beta of JOHOTIN	0.7
Risk Free Rate (10 year Malaysia Government Bond)	3.24 %
Expected Return (ROE)	12 %
Cost of Equity = Risk Free Rate + Beta (ROE - Risk Free Rate)	9.37 %

Research Report

Investment House	Date	Target Price
PUBLIC INVESTMENT BANK	13 April 2021	RM 2.08
Average Price Target		RM 2.08

Peer Analysis 

	JOHOTIN	DLADY	F&N
P/E	11.04	31.78	22.87
Dividend Yield	3.42	2.39	2.29

JOHOTIN had lower P/E compared to its peers. Asides that It had a higher dividend yield.

Technical Analysis

JOHOTIN daily chart show a downward trend with a support level at RM 1.48. Price might go upward if it is above the Ichimoku cloud at RM 1.625.

JOHOTIN charts is testing it to support RM 1.53. JOHOTIN going downtrend if price is below RM 1.53.

Maximum drawdown for JOHOTIN is 54 %.

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