FIBON (0149) - Fibon - Walking on Dragon's Steps

Fibon Berhad (Fibon - 0149) is mainly involved in the manufacturing and trading of electrical insulators, electrical enclosure as well as meter boards. The group also provided private financing scheme as well as factoring services.

With Fibon HQ located at Johor,  much of Fibon revenue is derived from Singapore, Malaysia and Australia. With much untapped international market, there is a huge space for future growth in place for Fibon, especially in the emerging market segment.

Being involved in the sales and manufacturing of electrical insulators, enclosures as well as meter boards, where will this lead Fibon in the coming days?

Electricity Demand is Growing

According to market research firm NRG Expert, the demand of electricity is growing, hence demand for cables, insulators, transmission towers will also be growing with it. The increase in the global energy demand are encouraging the demand for electrical insulator for power transmission and distribution application. The electrical insulator market is projected to grow at a CAGR of 6.5% in between 2014 to 2019.

On the local outlook, the massive development in Johor, ranging from property to massive industrial development continue to push the demand in building related components, such as cabling, piping, insulation and wiring.

With Fibon stationed at Johor, it will stand to benefit from all these massive development. Continuation of infrastructure upgrade in Singapore will also continue to benefit Fibon.

A Potential Gem in Future

Fibon can be closely compared to peers such as Ulicorp and Superlon, due to it's product and service offering are part of the building essential components. While Ulicorp is involved in cabling, Superlong is involved in heat insulation.

Both the companies are resilient during the recent equity shake up.

Albeit Fibon still at the lower price region, there are similarities of Fibon with Superlon and Ulicorp. The similarities are :
- Company are in net cash position
- Company practices giving annual dividend
- Business related to the component for building completion

With Fibon still laying relatively on the lower side of the identified trading range of RM 0.50 to RM 0.60, the current price will deem attractive to buy in position for Fibon. Fibon will be looking to announced it's upcoming quarter result in July 2016. Currently, Fibon net cash value stand at RM 0.28 per share.

Fibon revenue had saw improvement compared to the previous quarter. The total rolling 3 quarter EPS had also displayed stronger compared to the previous financial year.

We expect to see Fibon revenue improving further due to growing demand from infrastructure and residential development in Johor as well as Singapore. At just 98 million share issue, Fibon can be an interesting company in the coming 2 years when stronger revenue kick in. By growing revenue close to RM 50 million for a financial year, Fibon can possible see EPS tackling around 7 to 8 cents in the future.

Short term should be able to see Fibon trending towards RM 0.60.

FIBON (0149) - Fibon - Walking on Dragon's Steps