This thread is construct again in the Malaysia social forum, please follow using the link below if you are interested.

http://klse.i3investor.com/servlets/forum/901269360.jsp

Lottolearn, The Bonus proposal is on-going but not yet confirm and announce.

Fitters is one of the company that has newly ventures into the renewable energy industry, the original business of Fitters is the provision of safety equipment and fire prevention system. To gain more sustainable income, it then involved in the biomass to renewable energy-distributed generation and combined heat and power projects. This includes biomass gasification for rural electrification, captive power and grid-connected plants with capacities up to 4 Mwe and also conventional steam cycle power plants apply for larger capacity projects.

Fitters also involved in waste to energy; sustainable crude palm oil mills; empty fruit bunch processing into revenue-producing products; integrated total solution for solid waste and effluent management at palm oil mills.

Take a look on its Profit and Loss:

Net profit 2009: 8 million
Net profit 2010: 13 million
Net profit 2011: 22 million
Net profit 2012: 28 million
Net profit 2013: 39 million

The net profits grow by a steady rate over years, and showing the strong catch up of its core business, if the new ventures of renewable energy business were to pump in the profit in the future, it will surely cause the earning of Fitters to take a big leap! Look at Cypark and Amprop, their renewable energy units, i.e. solar energy generation, took their share price higher than the existing high!

First quarter of 2014, Fitters recorded a higher QoQ result of 9 million, the coming 2Q result is around the corner, if the net profit can hit up to 15 million for 2Q, then the half year of net profit would achieving the 24 million, which put it to more assurance to hit the new high of its net earnings.
On its balance sheet, the accumulation earning of Fitters is increasing and it’s approaching its amount of paid-up capital. This shows the ability of Fitters to issue bonus shares to its shareholders, and if the subsequent financial result is to be strong, it will further increase the possibility of bonus share issue.

The ROE of fitters stay strong at 15.02% and its PE is as low as 10x, compared to the market average of 15x. Thus, the target price based on PE will be at RM2, take 10% of safety margin, the future price estimated can hit up to RM1.80, about 32% potential gain from current price.

From the increasing of Land and machine holdings, it tells that the company is venturing into a different domain of business- the renewable energy business, and this indeed creates a lot of future potentials for Fitters.

Technically, the current net profit is 3 times more comparing to the year 2010, which trade by an average price of RM0.60, now, if the 3 times net profit was to apply into the share price, the target price would be at RM1.80, align with that of the PE valuation!

The chart pattern of Fitters is bullish, a gap up to the uncharted territory creates powerful momentum for further rally. The formation of ascending triangle and breakout of from its end will support the bull. Nearest support is located at RM1.28.

For the chart pattern illustration and more info, kindly refer http://chartian.com/fitters-9318/

When the news reveals that the rubber prices continue to edge lower, weighed by abundant supply and over demand from China, it lets me think about one of the company that uses rubber as its raw materials- Wellcall Holdings Berhad.

Wellcall might be familiar for those investors who love high dividend stocks, it is a company that manufacture industrial mandrels hoses and extrusion hoses for the rubber hose distributors world-wide, Wellcall manufacture rubber hose to a range of application including air and water, welding and gas, oil and fuel, automobile, ship building and food and beverage. It’s the largest hose manufacturers in Malaysia. To make things simple, let’s don’t border too much about those complicated market indicator and data, we just put an eyes on Wellcall’s business propect and that’s enough to tell why Wellcall is a right company to invest.

The wellcall group has showed good results in terms of operating profit in the past few years. In fact, the ascending trend of its operating profits shows that this company is actually growing very healthily. Over 98% of Wellcall’s products are selling overseas, its customer spread more than 60 country from America, Africa to Asia and Australia. With this, most of the trading is based on US dollars. Apart from the weakening of rubber prices, the strengthen of US dollar will also favorable to the earnings, this can be notice on Wellcall FY 2013 financial report. The falling of revenue by 14.78% shows that slower demand in rubber hose but the profit after taxation contrastingly rose by 5.8%, this rising of Profit after taxation despite of lower revenue, is contributed by the lower price on raw materials and the appreciation of US dollars in 2013.

In terms of balance sheet, the current ratio maintain at around 5.8 and its cash ratio/ acid test is around 4.4, this means the company is highly stable for uncertainty of economy downturns, and the ability for it to expand is also strong. The other remarkable side of Wellcall is its zero borrowings and low inventories levels, in fact, Wellcall products are mostly tailor made for its customers, there’s the advantage for Wellcall as it doesn’t has the need to keep inventories. Wellcall has a short inventory turnover cycle, it normally takes about 60 days to complete a transaction, that is, the process from accepting order to delivery and receiving payments, depending on the volume of the order.

Wellcall is expanding its factory in FYE 2013 for Mandrel hose manufacturing, this is good news because Wellcall is trying to uses its overwhelming assets to increase their production, which can then increases its management efficiency, this expansion expected to increase 40% of its total production. In addition, Mandrel hose provide more profit margin compare to other types of hose, the increment of Mandrel hose products push the sales of the higher margin products which increase the company’s earning power.

For industrial review, Oil & Gas sector will be the coming trend of economy, which means demand for the piping for Oil & Gas activity will be increase, continuously pickup of rubber hose requirement continue to go strong in emerging and developed market. Especially during the recovery of the European economy and the industry renaissance in the west, industry piping no doubt, will be in high demands. for the cost- wise, continuous easing of rubber prices secures the earning margins, on the other hands, U.S. economy data continue to sees improvement, which in turns, expect stronger dollar’s value in the future, which also goes along with the company. Wellcall has proposed share split of 1:2.5 in FYE 2014, this is the second alternation to its shares structure after bonus issued in 2008. This shares split actually increase the share liquidity which is positive to its ever lower trading volume, more floating shares might attracts more institutional investors.

In term of risk, the market price of Wellcall is pivoting to its sustainable of earning power, any inferiority of its revenue can drag down the price sharply, the price might over its valuation unless more profit coming in the next financial years. The competition of lower cost products from China and India also threaten Wellcall’s business but the competitive edge still there. Wellcall is an OEM (Original equipment manufacturer) business mode, which it might lack of a branding competitive edge, but as an OEM it bears the advantages like rapid market penetration and better co-existing ability with other market players. Although the rising of energy cost in 2014 creates worry in industrial costing, but it does not actually affect Wellcall in big extent as the electric and fuel cost constitute not more than 2% of its total production cost. In term of man power, Wellcall did state in its annual report that, the company is seeking the improvement in the production automation in order to reduce its dependence on manual labour.