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    Hing Yiap Group Berhad Buy: Results Report SJ Securities Sdn. BHD

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    Malaysia Stock Exchange. Hing Yiap released its 3Q FY2010 results. Results were very strong and had exceeded our full year forecasts. Revenue for the 3 quarters achieved 74.8% of full year revenue and 110.9% of full year net profit. We have upgraded our forecast for the year

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    Hing Yiap Group Berhad Buy: Results Report SJ Securities Sdn. BHD

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    limml63
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    Malaysia Stock Exchange. Hing Yiap released its 3Q FY2010 results. Results were very strong and had exceeded our full year forecasts. Revenue for the 3 quarters achieved 74.8% of full year revenue and 110.9% of full year net profit. We have upgraded our forecast for the year

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    HingYiap 20100601

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    Malaysia Stock Exchange. Hing Yiap released its 3Q FY2010 results. Results were very strong and had exceeded our full year forecasts. Revenue for the 3 quarters achieved 74.8% of full year revenue and 110.9% of full year net profit. We have upgraded our forecast for the year

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    Attribution Non-Commercial (BY-NC)
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    32 views4 pages

    Hing Yiap Group Berhad Buy: Results Report SJ Securities Sdn. BHD

    Uploaded by

    limml63
    Malaysia Stock Exchange. Hing Yiap released its 3Q FY2010 results. Results were very strong and had exceeded our full year forecasts. Revenue for the 3 quarters achieved 74.8% of full year revenue and 110.9% of full year net profit. We have upgraded our forecast for the year

    Copyright:

    Attribution Non-Commercial (BY-NC)
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    of 4

    Results Report

    SJ Securities Sdn. Bhd.


    1 June 2010 PP7084/11/2006
    Strictly for internal circulation only

    Hing Yiap Group Berhad Buy


    Fair Value
    3Q FY10: Strong results RM1.68 (+52.7%)

    Stock Data Investment Highlights


    Price (RM) RM1.10
    Stock code 7722 Hing Yiap released its 3Q FY2010 results. Results
    Bloomberg Ticker HYTK were very strong and had exceeded our full year
    MK forecasts. Revenue for the 3 quarters achieved 74.8% of
    full year revenue and 110.9% of full year net profit. We
    Listing Main
    have upgraded our forecast for the year
    Share Cap (RM mn) 41.8
    Market Cap (RM mn) 46.0 Results. Results for the quarter was higher. Revenue
    Par value (RM) 1.00 was 7.8% higher Q-o-Q and 10.0% higher Y-o-Y.
    52-wk high (RM) 1.31 Meanwhile this increased net profits by 17.3% Q-o-Q and
    52-wk low (RM) 0.63 was substantially higher Y-o-Y.
    Major shareholders:-
    Review. We note that Hing Yiap’s margins continued to
    Chi Kuei Yung Sdn Bhd 33.22% increase while costs were kept and operating expenses
    Chi Oi Meng 7.36% were minimized. The group had improve its process flow
    Khoo Henn Kuan 5.62% further while the new F&B segment is expanding to hit
    critical mass and enhanced economies of scale. The two
    recent cafes include the Low Cost Carrier Terminal and
    the Curve. This contributed to both higher revenue and
    Financial Data
    better margins.
    12 month trailing PER (x) 3.86
    BV per share (RM) 2.15
    Market outlook. Malaysia’s GDP was up substantially for
    P/BV (x) 0.51 the quarter. It was up 10.1% y-o-y, the highest growth
    ROE (%) 12.09 rate in 10 years. Economists have generally upgraded
    Beta (x) 0.75 their forecasts for the year. However there has been a
    Altman Z Score 3.65 further moderation of interest rates together with planned
    Dividend yield (%) 6.82 gradual decrease of subsidies.

    Relative Performance (%) Risk. Risk to Hing Yiap’s performance is the failure to
    1-month 3.47 meet consumer’s demand in fashion. However, Hing
    3-month -5.59 Yiap’s market is mostly the mid ranged market which
    6-month -5.65 limits such risks.
    12-month 33.32
    YTD -11.91 Recommendation. We are reiterating our buy
    recommendation on the stock with a higher fair value
    RM1.68. This is based on a PER of 6.0x and 2010F’s EPS
    Our reports are available for download of 28.0sen.
    on SJenie website as stated below.

    SJ Securities Sdn Bhd


    A Participating Organisation
    of Bursa Malaysia Securities
    Bhd
    www.sjsec.com.my
    Tel: 603-5634 0202
    Fax: 603-56376811
    SJ SECURITIES SDN BHD

    Results comparison
    3Q FY09 2Q FY10 3Q FY10 Q-o-Q Y-o-Y
    FYE 30 June % %
    Revenue RM mn 31.0 31.6 34.1 7.8 10.0
    Other operating income RM mn 0.2 0.1 0.8 686.0 349.1
    Inventories write-back/write-down RM mn (0.1) 0.0 (1.8) na na
    Operating expenses RM mn (30.8) (28.7) (29.5) (2.7) 4.1
    Profit from operations RM mn 0.3 3.0 3.6 18.2 1093.7
    Finance cost RM mn (0.2) (0.1) (0.1) na na
    Share of associate RM mn 0.0 0.0 0.0 na na
    Profit before Tax RM mn 0.1 2.9 3.5 19.9 2478.7
    Taxation RM mn (0.0) (0.8) (1.0) (27.0) (2390.2)
    Net profit (att to shareholders) RM mn 0.1 2.1 2.5 17.3 2516.8
    EPS sen 0.2 5.1 5.9 17.3 2520.7

    Margins %
    Operating margin % 1.0 9.6 10.5
    PBT margin % 0.4 9.2 10.3
    Net margin % 0.3 6.7 7.3

    Cumulative results comparison


    3Q FY09 3Q FY10 Y-o-Y
    FYE 30 June %
    Revenue RM mn 112.9 109.7 (2.9)
    Other operating income RM mn 0.3 1.1 268.4
    Inventories write-back/write-down RM mn (1.9) (2.4) (21.8)
    Operating expenses RM mn (97.9) (92.0) 6.1
    Profit from operations RM mn 13.4 16.4 23.1
    Finance cost RM mn (0.5) (0.3) 42.8
    Share of associate RM mn (0.1) 0.0 100.0
    Profit before Tax RM mn 12.7 16.1 26.7
    Taxation RM mn (3.8) (4.4) (16.9)
    Net profit (att to shareholders) RM mn 8.9 11.7 30.9
    EPS RM mn 21.4 28.0 30.9

    Margins %
    Operating margin % 11.8 15.0
    PBT margin % 11.3 14.7
    Net margin % 18.9 25.5

    2
    SJ SECURITIES SDN BHD

    Financial Highlight
    P&L FYE 31st June 2005 2006 2007 2008 2009 2010F
    Units
    Revenue RM ('000) 129,421 135,853 132,402 141,661 136,733 146,595
    Operating profit RM ('000) 75 4,941 8,803 12,465 14,150 17,100
    EBITDA RM ('000) 5,521 8,360 12,281 15,526 17,502 20,900
    Finance cost RM ('000) (1,233) (1,780) (1,453) (824) (684) (680)
    Profit before Tax RM ('000) (1,158) 3,161 7,333 11,442 13,382 16,255
    Taxation RM ('000) (1,515) (1,729) (2,813) (3,554) (3,912) (4,551)
    Net Profit RM ('000) (2,673) 1,432 4,520 7,888 9,470 11,704
    EPS sen (6.4) 3.4 10.8 18.9 22.7 28.0
    DPS sen 1.5 3.0 5.0 7.5 10.0 9.0

    Growth % 2005 2006 2007 2008 2009 2010F


    Revenue % 4.2 5.0 -2.5 7.0 -3.5 7.2
    Operating % -98.8 6498.2 78.2 41.6 13.5 20.8
    PBT % -125.2 372.9 132.0 56.0 17.0 21.5
    Net Profit/Loss % -202.0 153.6 215.7 74.5 20.1 23.6

    Margins % 2005 2006 2007 2008 2009 2010F


    Operating Margin % 0.1 3.6 6.6 8.8 10.3 11.7
    PBT Margin % -0.9 2.3 5.5 8.1 9.8 11.1
    Net Margin % -2.1 1.1 3.4 5.6 6.9 8.0

    Per Share Data


    2005 2006 2007 2008 2009 2010F
    Units
    Book Value RM 1.51 1.54 1.63 1.78 1.93 2.04
    NTA RM 1.44 1.48 1.57 1.72 1.75 1.86
    Cash Flow sen -3.5 7.7 58.3 -5.2 59.8 64.6
    Basic EPS sen -6.4 3.4 10.8 18.9 22.7 28.0
    Gross DPS sen 1.5 3.0 5.0 7.5 10.0 9.0
    Payout ratio % -23.4 87.5 46.2 39.7 44.1 32.1
    PER x -6.7 14.6 6.5 3.6 5.2 4.2
    P/Cash Flow x -12.3 6.5 1.2 -13.0 2.0 1.8
    P/Book Value x 0.3 0.3 0.4 0.4 0.6 0.6
    Dividend yield % 3.5 6.0 7.1 11.0 8.5 7.6
    ROE % -4.2 2.2 6.7 10.6 11.8 13.7
    Net Gearing % 39.7 49.6 18.4 13.0 9.5 15.9

    Peers Comparison
    Hing
    Description Yiap Cheetah Bonia Padini Voir Average
    Market Cap
    (RM mn) 46.0 62.5 198.5 473.7 82.8 172.7
    PER current 4.9 4.2 6.9 8.7 13.7 7.7
    PER forward 4.4 na 6.0 7.3 9.9 6.9

    Constituent of Indices
    FBM KLCI No
    FTSE Bursa Malaysia Large 30 Index No
    FTSE Bursa Malaysia Mid 70 Index No
    FTSE Bursa Malaysia EMAS Shariah Index No

    3
    SJ SECURITIES SDN BHD

    Share Performance

    Source: Bloomberg

    Disclaimer

    The information contained in this report is based on data obtained from sources believed to be reliable. However, the
    accuracy, adequacy, reliability or completeness of the information provided herein is not guaranteed and opinions are
    subject to change without notice. This report has been prepared for information purposes only and should not be
    construed as a solicitation for contracts. Any recommendation made does not take into account the specific investment
    objectives and any particular needs of investors. We accept no liability for any direct or indirect loss arising from the
    use of this document. We, our associates, directors or employees may have an interest in the securities and/or
    companies mentioned herein.

    This report has been prepared by SJ Securities Sdn Bhd for purposes of CMDF-Bursa Research Scheme ("CBRS")
    administered by Bursa Malaysia Berhad and has been compensated to undertake the scheme. SJ Securities Sdn Bhd has
    produced this report independent of any influence from CBRS or the subject company. For more information about
    CBRS and other research reports, please visit Bursa Malaysia’s website at:

    http://www.bursamalaysia.com/website/bm/listed_companies/cmdf_bursa_research_scheme/

    Stock rating definitions

    Buy – The stock is expected to perform positively. Expected return including both capital appreciation and dividends is
    expected to exceed 15% over 12 months.

    Hold – The stock is expected to stay sidelined. Expected return including both capital appreciation and dividends is
    expected to range between negative 5% to positive 15% over 12 months.

    Sell – The stock is expected to perform negatively. Expected return including both capital appreciation and dividends is
    expected to be negative 5% or lower over 12 months.

    Not Rated – The stock is not under research coverage and the reports serves for purely informational purposes only.

    Trading Buy – The stock is expected to be volatile while providing for near term positive trading opportunities. This is
    under the high risk category with near term catalysts.

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