Hong Leong Industries - HLIND (Share price - 7.47 - 24 Sep 2020)

Core Business

- Consumer products: Manufacturing, assembling and distribution of motorcycles (Yahama), scooters and related parts and products, manufacturing and sale of ceramic tiles as well as distribution, trading and provision of services in marine related products.

-  Industrial products: Manufacturing and sale of fibre cement and concrete roofing products.

Financial

Segmentation 

-  From the above table, we can clearly see that consumer product bring in the most revenue. Consumer product included - Yamaha motor and ceramic tiles. Whereas the loss generated from industrial product - fibre cement and concrete roofing products.

Geographical information 

The main country for the company to focus on is in Malaysia, 90% of the revenue is from Malaysia. 

Year 2020 Performance

Revenue dropped 8.5% and PAT dropped 39% !!! This is due to MCO and lower profit for associated company. But this company still a cash rich company with cash - 1.2billions. 

Prospect 

Sound like management team not expecting grow for next quarter as well. 

Financial performance year 2020

EPS - 0.5392

P/E - 13

ROE - 13.50 

GDP - 50

PRC -  60

My thought - Company highly impacted by Covid- 19 but I believed that it will slowly recover. 

Frencken (22 Sep 2020) - Share Price 0.945

Core business

Mechatronic Division

Frencken designs and manufactures high precision and complex systems for renowned global Original Equipment Manufacturers in the healthcare, analytical & life sciences, semiconductor and industrial automation markets

IMS Division 

Frencken offers integrated contract design and manufacturing services to the automotive and consumer & industrial electronics segments

Business Segment 

For 1H2020 performance 

Revenue dropped 9.6percents and profit dropped 6.1%.

Automation segment dropped 34.1% due to lower shipments on the storage drive equipment to a key multinational customer.

Automotive markets were affected by measures implemented by the respective governments to contain the spread of Covid-19 and an overall slowdown in end-user demand

Business Outlook 

Management team believed that 2H20 semicon, medical , automation and automotive segment revenue will be better than 1H20.

PRO: 

1) I've audited this company in year 2018, my impression for this company in bangi is good. Well manage and systematic. 

2) eco-PVD method is good but not sure how many customer will look for this. 

3) Business diversify is good , at least will not get serious impact if one of the sector in down turn. 

Cons

1) In machining field, the price is competitive and supplier will reduce the price in order to get the business. 

2) IMS business it keeps going downward. Even though the profit is up but the revenue is going down hill. 

Financial performance 

Issued Shares - 424,922,409

Net Profit - 18,641,000

EPS - 0.043 - for (1H20)

CAGR Profit (2013 - 2020) - 5.63 %

Current price - 0.945

Intrinsic - 1.057

MOS - 10.59

GDP scoring - 75

PRC scoring - 75