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