Description
|
Value
|
Criteria
|
Point
|
Price
to Tangible Book Ratio
|
0.71*
|
<
1
|
5/5
|
Stock
Valuation
|
CAPM
=> 2.97%
Return
(2008-2014) => 10.16%
Undervalue by 7.19%
|
CAPM
< Return
|
3/5
|
Return
on Asset
|
4.51*
|
>
0
|
4/5
|
Return
on Common Equity
|
6.80*
|
>
0
|
4/5
|
Quick
Ratio
|
2.13*
|
>1
|
5/5
|
Long
term Debt / Total Capital
|
5.81*
|
<50%
|
4/5
|
Continue
Dividend over Past 10 Years / Since Inception
|
Yes
|
Yes
|
2/2
|
Cash
From Operation
|
Positive
> 5 years
|
Positive
|
5/5
|
Total Point
|
|
|
32/37
|
Note:
* To understand more
about the financial analysis ratio kindly visit my hubpages.
By scoring 32/37 (86.5%),
we will look into the annual report and the latest quarterly report of AJIYA
before making the decision to buy the stock.
By comparing the CAPM
method and the average return of AJIYA from the year 2008 to 2014. AJIYA undervalue
by 7.19%. From 2008 to 2014 AJIYA is able to provide an average return of 10.16%.
However with such a
good valuation and ratio, as a value investor we always look into the annual
report, quarterly report and any announcement before making any investment
decision.
Company
Profile
AJIYA consists
of two main business divisions as follows:
- Metals Products Operation
- Safety Glass Operation
1) Metals Products Operation
AJIYA starts with this
operation since 1990 through Asia Roofing Industries Sdn Bhd (ARI), a
wholly-owned subsidiary of AJIYA berhad. ARI manufactures of metal roofing
system, metal frame products, structural products, light weight channel
products, metal ceiling and sun shade product in Malaysia.
In 2014, AJIYA developed
a new product is Mega Rib 30 PU PVC, a complete insulation system which able to
reduced heat and noise. Besides that, AJIYA is also venturing into integrated
industrial building systems (“IBS System”). IBS System is a new revolution in the
construction industry, now most of the local council in klang valley want the Architect
to ensure certain percentage of the building is build using the IBS system
before the building plan approval.
In June 2014, ARI has
enter a Memorandum of Understanding (MOU) with Gantan Beauty Industry Co. Ltd
(GANTAN) to become sole and exclusive agents in Malaysia for Gantan’s product. In
December 2014, new plant in Jalan Seelong, Johor was successfully commission which
enable the AJIYA to capture the projects in Johor.
Projects undertook by
these division are Tentera Udara Diraja Malaysia in Subang, Universiti Islam Antarabangsa
Malaysia in Gambang, Langsat OSC Sdn Bhd in Johor and Kipmart Shopping Complex
Kota Warisan Sepang.
2) Safety Glass
Operation
This division start its
operation in 1995 through Ajiya Safety Glass Sdn Bhd, a subsidiary of AJIYA. Its
principle activity is manufacturing of curved and flat tempered safety glass,
laminated glass, decorative glass and safety glass.
In 2014, AJIYA had
expended the glass operation in Johor Bahru plant by addition of one unit of
force convection tempering line.
The project which had
completed by this division are KLIA 2, Menara JKR 2, Plaza Bank Rakyat, CIMB
Tower, 2C10 Putrajaya and 4G5 Putrajaya.
PROS:
|
- Ventures into IBS system which local council
in Klang Valley already enforced that new building must be build using IBS
system. These will be enforced by other council in other states in Malaysia
in near future.
- Enter
an MOU with Gantan in June 2014 to become sole and exclusive agent of Gantan’s
products in Malaysia. Gantan has 49 years in metal roofing industry.
- With
the operation in Johor, AJIYA might able to cater the building material
industries in Singapore since they have an agent office in Woodlands,
Singapore.
- Having
factory for both metal production and safety glass operation in Thailand,
these can helps to hedged the weakening of ringgit.
|
CONS:
|
- In 2014 AJIYA has increase its capacity
for metal products operation and safety glass operation in Johor this year
there is a slow down in the construction industry in Malaysia especially in
the Johor region. The plant might not able to operate at its full capacity.
- The safety glass business in Malaysia
has intensified competition.
- Ajiya Safety Glass Sdn Bhd bought 2
vacant land and a factory lot in Ulu Langat, Selangor for RM 16,600,000.00 in
30 September 2014 announcement. The company haven’t decided the uses of the
properties, it is either as short to medium term investment and/or may be utilized for future expansion.
|
Management
& Shareholders
The founder of AJIYA Dato’
Chan is the managing director of AJIYA. This is good for AJIYA because he is
the one who bring out AJIYA from scratch and he had proven his ability to lead
AJIYA since inception into a company listed in Main Board.
Since May 2015, we had
these two Singaporeans , Mr Yeo Seng Chong and Mdm Lim Mee Hwa together with
their company Yeoman Capital Management Pte Ltd are start accumulating the AJIYA
shares. Yeoman Capital Management Pte Ltd had almost 18 years’ experience in
investing and had an absolute cumulative return of 853.39%. From Yeoman Capital Management Pte Ltdwebpages, there are focusing on long term investment style and these is what we
want as a value investor.
PROS:
- The managing director is the
founder of the company.
- Foreign institution investor which
focus on long term investment (Yeoman Capital Management Pte Ltd) start
buying AJIYA shares since May 2015.
|
Financial
Statement
From the annual report
2014, AJIYA had 45% of account receivable which had been pass due and had impaired
around 12.29% of the account receivable which had pass due.
By looking at the quarter
report end 31 May 2015 AJIAYA cash and bank balance is capable to paid all the
short term borrowing and debt. Despite implementation of GST, AJIYA still able
to had higher turnover compared to preceding year corresponding quarter, since
these quarter included March 2015 which is the month before GST we might need
to wait for the next quarter to see the actual effect of GST to AJIYA.
CONS:
|
- 45% of account receivable had past the
due date.
|
