Stock Review – HIGHTEC(7033)(KUMPULAN H&L HIGH-TECH BERHAD) -2

Bursa Malaysia - 7033

Bloomberg - H&L:MK
Yahoo - 7033 .kl
Webpage - http://www.hlhightech.com/

Company Profile

HIGHTEC specializing in the innovation of plastic injection mounting solutions; which are in Automotive, Consumer Goods, Electrical, Industrial and Medical.

1) Operating Segment

HIGHTEC has four major operating segments which are:

1) Manufacturing & Trading – 70.73 % of 2018 revenue

2) Property Development – 11.22 % of 2018 revenue

3) Plantation – 9.63 %  of 2018 revenue

4) Investment – 8.42 % of 2018 revenue

Asset turnover of the operating segments are:

1)  Manufacturing & Trading – 0.39

2) Property Development – 0.51

3) Plantation – 0.28

4) Investment – 0.02

Investment segment is having the most of non current asset gain for 2018 which is 77.49 % of the non current asset gain.

CONS:

è The lowest asset turnover ratio segment having the high non current asset gain.

2) Geographical Information

HIGHTEC is operated in three major location which are:

1) European countries – 49.64 % of 2018 revenue

2) Malaysia – 45.96 % of 2018 revenue

3) South East Asia – 2.72 % of 2018 revenue

4) Others – 1.67 % of 2018 revenue

Financial Statement

The Investment Properties had increase from RM 55,016,281 (2017) to RM 55,845,731 (2018),of the increment RM 765,550 (92.30 %) are from fair value adjustment.

Of the RM 3,054,727 trade receivables, RM 1,679,230 (54.97 %) are trade past due compared to 38.74 of the trade receivable past due in 2017.

HIGHTEC had increase in cash and deposit with licensed financial institutions from RM 16,000,377 (2017) to RM 17,616,060 (2018), 10.1 % increase.

PROS:

è HIGHTEC had 10.1 % increase in cash and deposit with licensed financial institutions.

CONS:

è 54.97 % of trade receivable had past due

HIGHTEC borrowings had reduced from RM 4,747,845 (2017) to RM 3,575,397 (2018), 24.69 % decrease.

There is significant increase in deferred tax liability from RM 4,257,925 (2017) to RM 6,126,376 (2018), 43.88 % increase. These increase in deferred tax liability is due to increase of fair value gain on investment properties from RM 1,451,907 (2017) to RM 2,980,814 (2018). If the investment properties is sales next year HIGHTEC had to pay the deferred liability.

PROS:

è HIGHTEC loans and borrowings had reduced by 24.69 %

CONS:

è Deferred tax liability had increase by 43.88 % mainly due to increase of fair value gain of investment property.

Financial Ratio

Description	2018	2017	Different
Gross Profit Margin	0.40	0.38	+0.02
Net Profit Margin	0.15	0.25	-0.10
Interest Coverage Ratio	32.58	28.78	+3.79
Effective Tax	0.47	0.20	+0.27

HIGHTEC increase of effective tax because of additional of deferred tax liability on real property gain which is RM 1,528,907. If the figure remove HIGHTEC effective tax rate is 23.63 %.

Warrant

HIGHTEC had no warrant.

Dividend and Bonus Issued for the past five year

HIGHTEC had constant dividend for the past five year from 2014 – 2018 with the average dividend of RM 0.033 with the dividend yield of 2.34 % base on HIGHTEC stock price of RM 1.28 on 15/3/2019.

CONS:

è HIGHTEC had dividend yield of average 2,34 % for the last five year which is lower than fixed deposit rate of 3.15 %

Estimated Price

IVKLS Price : RM 1.25

Peers

1) SCH

2) PNEPCB

3) HLT

4) KEIHIN

5) WONG

6) SANICHI

7) JASKITA

8) PASUKGB

9) YBS

10) MQTECH

Summary of Stock Reviews

Stock Review – AJIYA (7609) (AJIYA BERHAD) – 5

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.

1) Geographical Location

AJIYA operated in two countries Malaysia and Thailand. Base on 2017 annual report, most revenue are coming from Malaysia operation which is 92.05 %.

The asset turnover ratio for Malaysia operation had reduce from 0.89 in 2016 to 0.82 in 2017. However the asset turnover for the Thailand operation had maintain at 0.53.

CONS:

è Asset turnover ratio for the Malaysia operation had reduce by 7.87 %

Financial Statement

The increase of inventories from RM 70,926,380 (2016) to RM 75,593,726 (2017), 6.58 % increase and decrease in trade and other receivables from RM 210,043,277 (2016) to RM 112,308,075 (2017), 41.77 % decrease had shown a sign of drop in sales. Besides that the revenue for AJIYA also decrease from RM 395,516,712 (2016) to RM 370,882,963 (2017), 6.23 % decrease.

AJIYA had increase in cash and bank balance from RM 56,404,655 (2016) to RM 75,372,329 (2017), 33.63 % increase. Besides that, AJIYA fixed deposit with licensed bank had also increase from RM 29,789,782 (2016) to RM 56,241,921 (2017), 88.88 % increase and the interest rate ranging from 3.53 % - 2.83 % in 2017 while the interest rate for fixed deposit with licensed bank ranging from 3.00 % - 3.95 %.

PROS:

è AJIYA had 33.63 % increase in cash and bank balance è AJIYA had 88.88 % increase in fixed deposit with licensed bank

CONS:

è 6.58 % increase in inventories, 41.77 % decrease in trade and other receivables and 6.23 % decrease in revenue had shown sign of reduce sales in 2017. AJIYA total loan and borrowing had reduce from RM 9,668,238 (2016) to RM 6,515,216 (2017), 32.61 % decrease. PROS: è AJIYA loans and borrowings had reduced by 32.61 % Financial Ratio Description 2017 2016 Different Gross Profit Margin 0.17 0.20 -0.03 Net Profit Margin 0.04 0.05 -0.01 Interest Coverage Ratio 45.94 27.68 +18.26 Effective Tax 0.17 0.22 -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 0.59. Dividend and Bonus Issued for the past five year AJIYA had constant dividend for the past five year from 2013 – 2017 with the average dividend of RM 0.011 after adjustment (2016 stock split) with the dividend yield of 1.86 % base on AJIYA stock price of RM 0.59 on 21/9/2018 . CONS: è AJIYA had dividend yield of average 1.86 % for the last five year which is lower than fixed deposit rate of 3.15 % Estimated Price IVKLS Price : RM 0.59 Peers 1)           ASTINO 2)           CHINHIN 3)           ENGTEX 4)           PGLOBE 5)           KIMHIN 6)           SCBUILD 7)           SEACERA 8)           SKBSHUT 9)           WOODLAN 10)                  WTHORSE         Summary of Stock Reviews