Quarter result released date: 25th May 2017
Even though chinwel's quarter report higher than preceding quarter and corresponding quarter of preceding year, it does not escape the fate of being dumped by investors.
Chinwel fell 0.03cents, or 1.67% to RM1.77 (26th May 2017,1133hrs)
However, market outlook for fastener industry remain positive, supported by Zion Market Research Report, saying that the global industrial fasterners market, valued at US$84.9bil in 2016, is expected to reach US$116.5bil in 2022.
Business
- Manufacturing and trading of fastener and wire products
- Fastening segmemt (screws, nuts, bolt, DIY fastener and other fastening products). 80% of revenue, the edge
- Wire segment (galvanized wire,annealing wire, hard drawn wire, PVC wire, bent round bar and grill mesh). 20% of revenue, the edge
Geographic Segment
- 43.88% of revenue: European countries
- 37.66% of revenue: Malaysia
- 1.52% of revenue: Vietnam
- Other
Financial performance
- Revenue (QoQ: 11.34% ; YoY: 26.40%) (Fastener YoY: 28.95% ; Wire product YoY:16.02% )
- PBT (QoQ: -6.56% ; YoY: 27.79% ) (Fastener YoY: -6.32% ; Wire product YoY: 186.59% )
* Sales of fastener product and steel bar increased simultaneously as demand from local market manages to cushion the continuous drop in the export sales to European countries
* However, PBT drop was due to higher raw material cost
- Net profit (QoQ: 1.86% ; YoY:35.52%)
- Gross profit margin (Quarterly: 18.95% ; Annually:)
- Net profit margin (Quarterly: 10.43% ; Annually)
- Cash: fell 11.93% or RM15,875,000 to RM11,708,000
- Debt: fell 33.31% or RM20,105,000 to RM40,239,000
- Trade Receivables: Increased 32.05% or RM39,181,000 to RM161,404,000
- Trade Payables: Decreased 29.41% or RM 13,079,000 to RM31,380,000
- Long term growth chart
* 2016 Fiscal Year Revenue: RM508,134,000.
* To exceed last year result, chinwell needs to earn RM127,942,000 revenue for its 4th Quarter.
* In the past 2 years, five out of twelve of revenue were higher than RM128m
- European market performance
* Shown below is chinwel's performance at European countries
* Demand from European countries keep decreasing year over year
Factors that will affect Chilwel/Risk
- Poor market demand from European
- Shortage of workforce
- Share price tends to be higher now
Share price
- Current share price: RM1.76 (26th May 2017)
- 1st resistance level: RM1.79
- 2nd resistance level: RM1.84
- Support level: RM1.65/RM1.615
Target price
- Historical PE for Chinwel was around 8-9
- Assume next quarter EPS is 3.61, target price is RM1.50
Comments
- Demand from European countries keep decreasing, to cushion this effect, chilwel need to increase its revenue from Malaysia and Vietnam. From the above screenshot, it is shown that revenue from both countries outperfrom than European Countries.
- In short term, it is not a good time to enter chilwel.
- In long term, we still need to decide based on demand of global fastener industry and local construction sector, which chilwel might benefit from providing services of gabion and fencing.
News
13 Feb 2017, 8:56 AM
- 公司与英国客户向来的营业额以美元计价，因此英镑滑弱，并未对公司造成任何影响
- 钢铁原料约50%的成本是以美元计价
- 来自欧洲的营业额30%为美元，70%则为欧元
- 公司在大马业务未来的成长主要是依赖石笼网（gabion）及防盗网（Fencing），而DIY的扣件成长则仰赖越南的厂房。
- “大马部份河流正在进行河流整治工程，而这些工程都需要使用石笼网。防盗网方面，则用于大道及铁轨项目，公司已经攫取了部份基建项目的相关合约。”
February 27, 2017 : 9:19 AM
- We will not be affected by the US [protectionist] policy against China because we don’t sell anything to China. In fact, we stand to gain from it as the policy would hurt China, meaning that steel prices would rise, increasing our revenue
- the industrial fastener sector, especially in the automotive segment, which has been seeing a slowdown recently as global economic growth slows, is only expected to recover after 2018 when global economy picks up
- According to Global Industry Analysts Inc in February last year, the world market for industrial fasteners was expected to grow to US$83.8 billion by 2020, driven by an improvement in global economy, and reviving automotive and manufacturing sectors.
Reference:
http://www.thestar.com.my/business/business-news/2017/05/02/chin-well-sees-lower-revenue-and-bottom-line/
http://www.malaysiastock.biz/Blog/BlogArticle.aspx?tid=2914
http://www.malaysiastock.biz/Blog/BlogArticle.aspx?tid=3696
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