Stock Review – ARANK (7214) (A-RANK BHD)

Bursa Malaysia - 7214

Bloomberg - ARNK:MK
Yahoo - 7214 .kl
Webpage - http://www.arank.com.my/

Company Profile

ARANK is principally involved in manufacturing and marketing of aluminium billets. ARANK is currently the largest manufacturer and supplier of aluminium billets in Malaysia and one of Asia’s leading suppliers of aluminium extrusion billets.

1) Geographical Information

According to annual report 2017, ARANK revenue are from three segments which are

1)  Malaysia – 68.85 %

2) South East Asia Except Malaysia – 20.96 %

3) Others – 10.18 %

ASIAFLE revenue per asset for each segment are as follows:

1) Malaysia – 2.06

2) South East Asia Except Malaysia – 21.73

3) Others – 0.45

CONS: è Most of revenue are from Malaysia however the revenue per asset of Malaysia is must lower than South East Asia Except Malaysia

Financial Statement

ARANK Inventories has increase by 233% from RM 26,861,793 (2016) to RM 62,589,421(2017). The trade and other receivable did not decrease from RM 38,587,651 (2016) to RM 37,968,565 (2017) of which of which RM 3,602,103 or 9.49 had past due and the cash and bank balances had reduce from RM 25,261,913 (2016) to RM 7,751,660 (2017). However by looking at the Quarter 3 2018 unaudited quarterly report below:

As of April 2018, the inventories had reduce from RM 62,589,000 to RM 47,799,000. The trade and other receivable had increase from RM 37,969,000 to RM 48,644,000 and the cash and bank balance had increase from RM 7,751,000 to RM 36,770,000.

PROS:

è ARANK had increase its inventories in 2017 and had sold 23 % of them within July 2017 to April 2018.

ARANK bank borrowing are foreign currency loan denominated in US Dollar.

CONS

è Bank Borrowing denoted in USD.

Financial Ratio

Description	2017	2016	Different
Gross Profit Margin	0.06	0.06	0.00
Net Profit Margin	0.04	0.04	0.00
Interest Coverage Ratio	35.98	37.98	-2.00
Effective Tax	0.18	0.01	0.17

Dividend and Bonus Issued for the past five year

ASIAFLE had constant dividend for the past five year from 2013 – 2017 with the average dividend of RM 0.0266 with the dividend yield of 3.55 % (base on closing price 24 July 2018 RM 0.75).

PROS: è ASIAFLE has dividend yield of 3.55 % which is higher than fix deposit rate of 3.15%

Market Research

None

Estimated Price

IVKLS Price : RM 0.92

Peers

1)   PMETAL

2)   PMBTECH

3)     PRESTAR

4)   ATTA

5)   LBALUM

6)      LYSAUGHT

7)      FACBIND

8)   ALCOM

9)   EMETALL

10) PA

Summary of Stock Reviews