For a number of years, the multilevel marketing company used its operating cash flow to diversify into unrelated businesses, from property development and a travel agency to the timber trade and biodiesel production.
In 2008, they made the decision to focus on the MLM business. The transformation has reinvigorated the group’s bottom line. It made a record net profit of RM28.4 million for FY2010 ended Jan 2010, which improved further into a record quarterly net profit of RM10 million in its 1Q2011 ended May 31, 2010.
That was helped by the use of operating cash flow to reduce borrowings. It reduces its net borrowings to RM17.3 million in 1Q from RM31.3 million in the preceding quarter. The group could turn net cash by year end.
All its unrelated businesses have been wound down and losses provided for – except for ongoing property development project in Alor Star. It does not plan to scale up this division. Operating cash flow from the MLM will be ploughed back into the MLM or distributed as dividends.
In 1Q2011, besides savings in interest costs, earnings also grew through the group’s two pronged strategy of opening new markets and broadening its product range
Financial position as at 31 May 2010.
NTA RM0.89
Cash RM43.46 million
Borrowings RM60.88 million
Share Capital RM60.191 mil
Share Premium RM1.78 mil
Treasury Share (RM7.911 mil)
Retained Earning RM154.37 mil
Shareholders Fund RM202.97 mil
Non Current Asset RM119 mil
Current Asset RM188 mil
Current Liabilities RM94 mil
Long Term Liabilities RM6.8 mil
1Q EPS RM0.0445 ( Corresponding 1Q EPS RM0.0216 )
1Q Net Profit RM10.076 million
Projected Annualised EPS RM0.1772
Projected Annualised profit RM40 mil
Number of shares 240.764 million
Share price on 24.9.2010 RM1.13
Look out for the announcement for the 2nd quarter by October 2010. If the EPS is the same or more, then this counter is good to invest in. Recently the company had fix its dividend policy to pay at least 50% of its profit as dividend on a quarterly basis.
If the above profit is maintained, at least RM20 million will be paid as dividend, giving a yield of about 8%.
Fair price RM1.70 ( 10 x projected EPS )
Saturday, September 25, 2010
Motivate Ourself To Better Health
“In health there is freedom. Health is the first of all liberties.” Henri Frederic Amiel.
Yes, health is more important than wealth. If you are wealthy, but not healthy, you will not be able to enjoy your wealth. If you are healthy but not wealthy, you can work hard to look for wealth.
Francois Rabelais once said, “Without health life is not life; it is not living life. Without health life is only a state of languor and an image of death.”
“Health is worth more than learning.” Thomas Jefferson, 3rd president of USA.
Health is wealth. Health is beauty. Take care of your health and make it as top priority in life. William Shenstone said, “Health is beauty, and the most perfect health is the most perfect beauty.”
“Strive to preserve your health; and in this you will the better succeed in proportion as you keep clear of the physicians, for their drugs are a kind of alchemy concerning which there are no fewer books than there are medicines.” Leonardo da Vinci.
Look after your health. Value your health to value your life. “Health is not valued till sickness comes.” Anonymous.
Yes, health is more important than wealth. If you are wealthy, but not healthy, you will not be able to enjoy your wealth. If you are healthy but not wealthy, you can work hard to look for wealth.
Francois Rabelais once said, “Without health life is not life; it is not living life. Without health life is only a state of languor and an image of death.”
“Health is worth more than learning.” Thomas Jefferson, 3rd president of USA.
Health is wealth. Health is beauty. Take care of your health and make it as top priority in life. William Shenstone said, “Health is beauty, and the most perfect health is the most perfect beauty.”
“Strive to preserve your health; and in this you will the better succeed in proportion as you keep clear of the physicians, for their drugs are a kind of alchemy concerning which there are no fewer books than there are medicines.” Leonardo da Vinci.
Look after your health. Value your health to value your life. “Health is not valued till sickness comes.” Anonymous.
Money Mistakes
Money Mistakes. How To Avoid Them
“Money is a huge deal in every one’s life. It has to be managed well, otherwise one would run the risk of having financial difficulties in the future” KH Tan, a financial planner.
What are the mistakes?
Not Budgeting
The root of financial problem begin with our failure to plan ahead and set financial goal. Budgeting is the first step of financial success. Budgeting enables one to manage his or her finances and be in control of his or her financial affairs.
Impulsive Spending
Wealth is commonly destroyed because of uncontrolled spending. One cent spend is one cent loss. Unrestrained spending can turn into habit of wastage and create mountain of debts.
Debt Bondage
Credit card is a useful tool but it can be a tool to accumulate debt too. In Malaysia, 1,656 were declared bankrupt in 2006 cause by credit card alone. Nationwide there are 3.2 million being declared bankrupt. According to Bank Negara in July 2010, 50% of credit card holders who had been declared bankrupt were below 30 years old.
No Saving
Locally renowed millionaire, Azizi Ali said “The one essential step to achieving financial independence is learning how to save.” One of the habits of a millionaire is to consistently saving a portion of your income.
No Sound Investment
Conventional saving alone cannot grow one’s wealth because interest rate do not compensate well due to inflation. Therefore, it is necessary to put one’s money in other investment instrument like stocks, bonds and unit trust.
“Money is a huge deal in every one’s life. It has to be managed well, otherwise one would run the risk of having financial difficulties in the future” KH Tan, a financial planner.
What are the mistakes?
Not Budgeting
The root of financial problem begin with our failure to plan ahead and set financial goal. Budgeting is the first step of financial success. Budgeting enables one to manage his or her finances and be in control of his or her financial affairs.
Impulsive Spending
Wealth is commonly destroyed because of uncontrolled spending. One cent spend is one cent loss. Unrestrained spending can turn into habit of wastage and create mountain of debts.
Debt Bondage
Credit card is a useful tool but it can be a tool to accumulate debt too. In Malaysia, 1,656 were declared bankrupt in 2006 cause by credit card alone. Nationwide there are 3.2 million being declared bankrupt. According to Bank Negara in July 2010, 50% of credit card holders who had been declared bankrupt were below 30 years old.
No Saving
Locally renowed millionaire, Azizi Ali said “The one essential step to achieving financial independence is learning how to save.” One of the habits of a millionaire is to consistently saving a portion of your income.
No Sound Investment
Conventional saving alone cannot grow one’s wealth because interest rate do not compensate well due to inflation. Therefore, it is necessary to put one’s money in other investment instrument like stocks, bonds and unit trust.
Friday, September 24, 2010
Vitrox Berhad
Vitrox-At An Inflection Point (CIMB )
This vision inspection equipment maker is on the cusp of explosive growth, having successfully executed its business re-engineering. It is well-placed to tap into the vast revenue opportunity of US$1.0bn-1.2bn p.a. presented by its new area of manufacture as it rides on its association with Agilent. Vitrox (VITRO MK, Not Rated) will benefit from Agilent’s technology, channel partners, supply chain and outsourcing, and shorter product development cycle.
The key drivers are i) its takeover of Agilent’s market share for AOI and AXI machines, ii) the drive towards more automated vision inspection, iii) a wider product offering, and iv) margin expansion possibilities.
Vitrox is trading at 5.5 x FY11 P/E, a 25% discount to its peers due to its smaller market cap, lower ROE and dividend yield. If we were to apply a 20-30% P/E discount to its peers on FY12 EPS to factor in execution risks, potential shortfall in market share targets and Vitrox’s smaller size, we would arrive at a valuation of RM1.83-2.09, which offers upside of 61-83% from current levels. Vitrox is at an inflection point, buoyed by its new AOI and AXI machines which have been gaining rapid acceptance
Posted by Smartbiz
Financial position as at 30 June 2010
NTA RM0.41
Cash RM28.9 mil
Borrowings RM0.00
1Q EPS RM0.0288 ( Profit RM4.895 mil; Turnover RM12.98 mil )
2Q EPS RM0.0648 ( Profit RM9.874 mil; Turnover RM26.12 mil )
Projected Annualised EPS RM0.2232
Projected Annualised net profit RM34 mil
Share Capital RM15.5 mil
Share Premium RM1.22 mil
Treasury Share (RM1.022 mil)
Retained Earning RM47.61 mil
Shareholders Fund RM63.3 mil
Non Current Asset RM16.09 mil
Current Asset RM62.258 mil
Current Liabilities RM14.457 mil
Long Term Liabilities RM0.581 mil
Number of share buy back 2,714,700
Number of shares 155.5 million
Watch out for the announcement on its 3rd quarter profit. Good counter to invest since its earning is on an uptrend.
Fair price is RM2.20 ( 10 x its EPS if its performance is maintained )
This vision inspection equipment maker is on the cusp of explosive growth, having successfully executed its business re-engineering. It is well-placed to tap into the vast revenue opportunity of US$1.0bn-1.2bn p.a. presented by its new area of manufacture as it rides on its association with Agilent. Vitrox (VITRO MK, Not Rated) will benefit from Agilent’s technology, channel partners, supply chain and outsourcing, and shorter product development cycle.
The key drivers are i) its takeover of Agilent’s market share for AOI and AXI machines, ii) the drive towards more automated vision inspection, iii) a wider product offering, and iv) margin expansion possibilities.
Vitrox is trading at 5.5 x FY11 P/E, a 25% discount to its peers due to its smaller market cap, lower ROE and dividend yield. If we were to apply a 20-30% P/E discount to its peers on FY12 EPS to factor in execution risks, potential shortfall in market share targets and Vitrox’s smaller size, we would arrive at a valuation of RM1.83-2.09, which offers upside of 61-83% from current levels. Vitrox is at an inflection point, buoyed by its new AOI and AXI machines which have been gaining rapid acceptance
Posted by Smartbiz
Financial position as at 30 June 2010
NTA RM0.41
Cash RM28.9 mil
Borrowings RM0.00
1Q EPS RM0.0288 ( Profit RM4.895 mil; Turnover RM12.98 mil )
2Q EPS RM0.0648 ( Profit RM9.874 mil; Turnover RM26.12 mil )
Projected Annualised EPS RM0.2232
Projected Annualised net profit RM34 mil
Share Capital RM15.5 mil
Share Premium RM1.22 mil
Treasury Share (RM1.022 mil)
Retained Earning RM47.61 mil
Shareholders Fund RM63.3 mil
Non Current Asset RM16.09 mil
Current Asset RM62.258 mil
Current Liabilities RM14.457 mil
Long Term Liabilities RM0.581 mil
Number of share buy back 2,714,700
Number of shares 155.5 million
Watch out for the announcement on its 3rd quarter profit. Good counter to invest since its earning is on an uptrend.
Fair price is RM2.20 ( 10 x its EPS if its performance is maintained )
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