HHGROUP (0175) - Heng Huat: Slowly But Surely?
HHGroup FY14Q4 Financial Result
HHG (RM mil) | FY14Q4 | FY14Q3 | FY14Q2 | FY14Q1 | FY13Q4 |
Revenue | 23.2 | 23.1 | 24.1 | 21.3 | 23.1 |
Gross Profit | 8.8 | 10.4 | 10.4 | 9.7 | 9.5 |
Gross% | 37.9 | 45.0 | 43.2 | 45.5 | 41.1 |
PBT | 3.5 | 2.3 | 3.7 | 3.8 | 3.5 |
PBT% | 15.1 | 9.9 | 15.2 | 17.6 | 15.2 |
PATAMI | 3.4 | 1.2 | 2.7 | 3.0 | 2.4 |
Biomass Rev | 18.1 | 18.6 | 19.7 | 16.7 | 18.2 |
Mattress Rev | 9.8 | 9.1 | 9.2 | 9.1 | 10.1 |
Biomass OP | 3.6 | 4.3 | 4.2 | 3.5 | 3.9 |
Mattress OP | -0.1 | -0.1 | -0.2 | 0.3 | 0.2 |
Total Equity | 68.3 | 64.8 | 43.1 | 40.4 | 37.3 |
Total Assets | 109.8 | 110.5 | 95.3 | 90.5 | 89.0 |
Trade Receivables | 22.3 | 19.7 | 21.4 | 19.2 | 19.4 |
Inventories | 5.9 | 6.3 | 5.4 | 4.6 | 4.2 |
Cash | 15.2 | 18.8 | 2.6 | 2.4 | 1.4 |
Total Liabilities | 36.8 | 42.2 | 49 | 47.4 | 49.1 |
Trade Payables | 11.2 | 9.2 | 11.4 | 9.4 | 11.2 |
ST Borrowings | 9.6 | 12.1 | 15.5 | 15.3 | 13.8 |
LT Borrowings | 15.3 | 19.0 | 20.5 | 21.4 | 23.0 |
Net Cash Flow | 13.0 | 16.6 | 0.4 | 0.2 | 0.3 |
Operation | 13.5 | 8.7 | 6.5 | 2.6 | 11.3 |
Investment | -7.7 | -7.5 | -5.1 | -1.8 | -7.7 |
Financing | 7.3 | 15.5 | -1.1 | -0.7 | -3.2 |
EPS | 1.67 | 0.64 | 1.69 | 1.91 | 1.52 |
NAS | 0.38 | 0.38 | 0.27 | 0.25 | 0.23 |
D/E Ratio | 0.14 | 0.19 | 0.77 | 0.85 | 0.95 |
Heng
Huat's revenue in FY14Q4 is rather flat. Gross profit margin drops due
to higher raw material price for biomass segment but lower admin &
distribution expenses make the PBT comparable to previous quarters.
Excluding
the listing expense of RM1.87mil in Q3, FY14Q3 PBT is actually
RM4.2mil. So current Q4 PBT of RM3.5mil is a bit of disappointment to
me.
Tax income registered in Q4 gives Heng Huat its record high quarterly PATAMI of RM3.4mil.
HHG (RM mil) | FY14 | FY13 |
Revenue | 91.7 | 73.7 |
Revenue growth % | 24.6 | |
Gross Profit | 39.2 | 32.0 |
Gross% | 42.7 | 43.4 |
PBT | 13.2 | 11.4 |
PBT% | 14.4 | 15.5 |
PATAMI | 10.4 | 9.7 |
PATAMI growth % | 7.2 | |
EPS | 5.79 | 6.11 |
NTA | 0.38 | 0.23 |
Anyway, full year FY14 result is still commendable with revenue grows 24.6% and PATAMI grows 7.2%.
The
better results are contributed by better demand and selling price for
its biomass products esp oil palm EFB fiber from China.
Lesser growth in profit is due to decrease in product margin, higher transportation cost and the one-off listing expense mentioned earlier.
Lesser growth in profit is due to decrease in product margin, higher transportation cost and the one-off listing expense mentioned earlier.
Tax paid in FY14 is just 3%, due to many of its products granted pioneer status with tax exemption.
Net debt/equity ratio improves substantially after IPO and further drops to 0.14x in the end of FY14.
Heng
Huat latest geotextile product palm fiber mats are fully sold since
launched. It currently only has one production line with production
capacity of 100 pieces per month. It plans to set up another line in Q1
of FY15.
The
palm fiber mats can be used in construction and plantation sector to
prevent soil erosion. Heng Huat highlighted that plantation players can
enjoy a production cost saving of more than 2 times by using the palm
fiber mats.
Palm Fiber Mat
Last
year Heng Huat bought land in Gua Musang to build a new factory that
will increase its oil palm fiber production capacity. Its construction
will only start in Q3 of 2015.
I think Heng Huat still has room to grow, albeit slow.
If not because of the one-off listing expense, Heng Huat should be able to achieve PATAMI of RM12mil in FY14.
With total shares of 205.8mil, EPS will be 5.8sen. So I'll keep my target price at 58sen base on PE of 10x.
http://bursadummy.blogspot.com/
Heng
Huat might be one of the few companies in ACE market who shows good
profitability and awaiting to be transferred to main board.