Oceancash Pacific (OCNCASH 0049) Quick Analysis
Nonwoven Division - target customers are in disposable hygienic products industryand its application include top-sheets, second layer, acquisition distribution layer (ADL), and back-sheet for diapers, sanitary napkins, wet wipes, and surgical apparels including caps, masks, and gowns.
Harimau Capital
Nov 9, 2014
Business Analysis:
Oceancash business activities principally divided into two product division- Felts Division - Manufacturing and distribution of resinated felts and thermoplastic felts for thermal and acoustic applications.
- Nonwoven Division - Manufacturing and distribution of thermalbond, airthrough and specialty nonwoven fabrics for hygiene application
Product Application and target customers
Felts Division - target application and customers include but not limited to; interior and exterior trims in automobiles, noise damper for compressors of split unit air conditioners as well as insulation in buildings including roofs, walls, partitions, and carpet underlay.Nonwoven Division - target customers are in disposable hygienic products industryand its application include top-sheets, second layer, acquisition distribution layer (ADL), and back-sheet for diapers, sanitary napkins, wet wipes, and surgical apparels including caps, masks, and gowns.
Business activities comments: Oceancash products are not target directly
to end customer segment and their customers are the automotive and
hygienic products manufacturer.
Hence, the company need to be leading in manufacturing technologies and
innovative technology to compete with competitors in the same field.
Financial Analysis:
| OCNCASH | 2009 | 2010 | 2011 | 2012 | 2013 | 2014 (6months) |
| Revenue (,000) | 54707 | 55802 | 58057 | 58876 | 68581 | 37263 |
| Net Profit (,000) | 3271 | 1809 | 2189 | 2550 | 6264 | 3598 |
| Net Profit Margin (%) | 5.98 | 3.24 | 3.77 | 4.33 | 9.13 | 9.66 |
| EPS (sen) | 1.47 | 0.81 | 0.96 | 1.18 | 2.92 | 1.61 |
| Dividend (sen) | 0.2 | 0.2 | 0.2 | 0.3 | 0.4 | |
| Equity | 38890 | 40253 | 41995 | 43876 | 49248 | 52780 |
| Cash & bank balances (,000) | 4413 | 5066 | 6682 | 7170 | 13127 | 12867 |
| Total Liabilities (,000) | 23586 | 24701 | 30545 | 24528 | 22784 | 23733 |
Comments:
The company balance sheet continues improving over the years and its
cash pile is growing while the liabilities is decreasing. Both revenue
and net profit are improving in FY13 and 1st of FY14.
Based on projected FY14 EPS 3.2 sen and dividend 0.5sen, the valuation of the stock
OCNCASH 0.42 sen @ 07/11/14
1.) PER 15x = RM 0.48
2.) PER 10x = RM 0.32
3.) Projected DIVIDEND YIELD FY14 = 1.2% @ RM0.42
If company forecast 80 million sale is achieved in FY15 and the net
profit margin yield improve from 10% to 12% based on economy of scale.
The estimated FY15 EPS will be 4.3 sen. Hence the company can be valued
as high as RM0.65 (PER 15x) in next 18 months. Any price trade higher than RM0.65 will be out of the company fundamental.
Harimau Capital
http://www.harimaucapital.com
