Friday, 17 January 2020

Stock Review – YOCB (5159) (YOONG ONN CORPORATION BERHAD)

Bursa Malaysia - 5159
Bloomberg - YOCB:MK
Yahoo - 5159 .kl
Webpage - http://www.yoongonn.com/#

Sector : Consumer Product and Services
Sub Sector : Household Goods

Company Profile

YOCB is a leading integrated designer, manufacture, distributor and retailer of home linen and bedding accessories in the region. YOCB has more than 10 main brands of home linen such as Novelle, Jean Perry, Loius Casa, Genova, Niki Cains, Diana and Cotonsoft. YOCB has it own retail outlets which are twenty two fully owned outlets of “Home’s Harmony”.

YOCB export to more than seventeen counties namely Australia, Brunei, Cambodia, Dubai, Fiji, Indonesia, Japan, Mozambique, New Caledonia, Nigeria, Papua New Guinea, Philippines, Singapore, Taiwan, Thailand, Turkey and Vietnam.

1) Operating Segment

YOCB consists of 3 main reporting segments as follow:

Segment
% 2019 Revenue
Asset Turnover
Return on Asset (%)
% 2019 CAPEX
Manufacturing
19.95
0.92
7.84
0.35
Distribution and Trading
56.67
1.57
16.53
90.84
Retailing
23.38
1.39
17.52
8.81

Manufacturing

Design and manufacturing of home linen and bedding accessories

Distribution and trading

Distribution and trading of home linen and homeware

Retailing

Retailing home linen and homeware

PROS:
è YOCB place large amount of CAPEX on Distribution and Trading segment which has a good asset turnover and return on asset.


Financial Statement


YOCB had increased it Property, plant and equipment (PPE) from RM 49,158,000 in 2018 to RM 60,311,000 in 2019. In 27 November 2018 and 7 December 2018 YOCB had brought 2 level of office suite in EkoCheras Office Suites which cost RM 6,790,8000 and RM 6,300,000 respectively.

YOCB had decrease it inventory from RM 103,468,000 in 2018 to RM 77,590,000 in 2019 while the trade receivable maintain which mean YOCB able to sell more inventory in cash for 2019. Trade receivable past due had decrease from RM 15,189,000 in 2018 to RM 12,890,000 in 2019.

YOCB short term investment, deposits with financial institutions and cash and bank balances had increase from RM 39,120,000 in 2018 to RM 59,421,000 in 2019.

PROS:
è  Selling more inventory in cash instead of account receivable in 2019 compared to 2018.
è Trade receivable past due had decrease by 15%.
è Increase of short term investment, deposits with financial institutions and cash and bank balances by 51.89 %


YOCB long term borrowing had increase from RM 333,000 in 2018 to RM 8,258,000 in 2019 however YOCB total borrowing had reduce from RM 13,072,000 in 2018 to RM RM 9,276,000 in 2019.

PROS:
è  Total borrowing had reduce by 29.04 %

Financial Ratio

Description
2019
2018
Different
Gross Profit Margin
39 %
47 %
-8 %
Net Profit Margin
9 %
12 %
-3 %
Interest Coverage Ratio
54.73
42.20
+12.53
Effective Tax
25 %
24 %
+1%

Warrant

No Warrant issue

Dividend and Bonus Issued for the past five year

YOCB had constant dividend for the past five year from 2015 – 2019 with the average of RM 0.044 with the dividend yield of 4.51 % base on YOCB stock price of RM 0.975 on 17/1/2020

PROS:
è YOCB had dividend yield of 4.51 % for the past five year which is higher than fixed deposit of 2.9%

Market Research

No recent research


Estimated Price

IVKLS Price : RM 1.41


Peers
1) ENGKAH (7149)
2) LEESK (8079)