Results Review

TECNIC has reported some favourable results although the stock has seen little trading other than the increased BUY/SELL price which has rise but still cheap if assuming their EPS can be maintained for another 2 quarters. Latest result has bump up their EPS to date to 18.9 sens and if the trend continues, we would see a minimum of 35 sen EPS FYE2010. That would mean a minimum of 17.5 sen dividend and represents a 7.6% yield at current price of RM2.30. That is if they can maintain their EPS for the rest of the year. Strong dividends but very low volume counter.

UCHITEC also reported a stronger quarter bumping their 6 month accumulated EPS to 6.4 sens. If their recovery continues in the next 2 quarters, their expected EPS will be near 15 sens. With a policy of minimum of 70% dividend payout from EPS, the stock price will see greater upside if their 3rd quarter results shows continuous normalisation of their profits. FYE2008 their EPS was 15.75 sens and they paid out 12 sens of dividends. Being cash rich and almost no debts will allow it to continue paying generous dividends to their shareholders as long as EPS can be maintained. Expect stock price to exceed RM1.80 if yearly EPS of 15 sens is achievable.

WELLCAL which has announced that one of its directors controlled company have been liquidated and now almost all Executive directors have direct shareholding of the company with the biggest shareholder being Mr Huang Sha with a 15% direct stake. Their recent results has also shown some improvement and declared a 2.5 sen dividend which went ex-date at the end of last month. So far they've paid 8 sens worth of dividends FYE2010. The company also have a habit of announcing and paying the dividends within 30 days. Being an industrial hose which exports 90% of their products, the RM appreciation will affect their bottom line and the world economy will dictate their growth.

PROTON has seen a great start to FYE2011 with big improvement in sales and importantly profits. A final dividend of 15 sens after tax is also announced going ex at the end of Sept for FYE2010. Cash levels has also increased dramatically last year and the NTA of PROTON is now a staggering RM9.85, when compared to the current price of RM4.72. Their current cash per share is already at RM2.90 which makes me wonder why is PROTON priced so cheap by the market. Their debts is less than RM200mil for long and short term combined although their payables are at RM1.8 bil which is worrying. The car industry which is currently seeing it's best year in Malaysia with record growths of car sales, is unfortunately not expected to last past 2011. PER wise it is more realistic as it show PROTON is priced at about 14x of last year's EPS. In other words, PROTON may be priced cheaply in terms of assets but fair relative to earnings. Expect PROTON to hit above RM6 if EPS is replicated throughout the rest of the year.