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KESM (9334) - KESM (RM4.81)? Stunning quarter result, net cash company with high NTA (RM6.52)



 
 

 
Latest quarter result:
 
30/4/2016 - 17.6sen
31/1/2016 - 16.3sen
31/10/2015 - 18.8sen
31/7/2015 - 24.3sen
Total - 77sen
 
Current PE ratio : 6.25 (RM4.81)
 

 
Company background
The company owned by a listed company in
Singapore, Sunright Limited (48.41%).
 
On 1 Apr 2015, the company proposed to
acquire the remaining shares (34.62%) of
KESM Test (M) Sdn Bhd.
 
Since the acquisition completed on 13 May
2015. the company's EPS have been spiked
up.
 

 
 
I am here to ANSWER a simple question.
Why KESM?
 
1) Low PE ratio company (PE 6.25)
2) Net cash company with net assets which
higher than their market price
3) Market leader in independent burn-in
test' service provider
4) Others
 
 
1) Low PE ratio company (PE 6.25)
 
On 2 Jun 2016, the company have
 
announced a stunning quarter result of
 
earning of 17.6sen despite the the currency
 
against USD dollar have been dropped from
 
USD1 = RM4.29 (31 Jan 2016) to USD1=
 
RM3.90 (30 Apr 2016)
 
 
 
With the announcement of the stunning result, it make
 
KESM one of the lowest PE ratio net cash company in
 
Bursa Malaysia.
 
 
Although the share price have been increased by 74sen
 
during Friday, in my opinion it is still undervalue (PE
 
6.25sen)
 
 
2) Net cash company with net assets which
higher than their market price
 
Total cash : RM108mil
Total borrowing: RM45mil
 
Net cash position = RM63mil or RM1.46 per
share
 

As per quarter ended 30 April 2016, the
company's net assets position is at RM6.52,
which is 35% lower than current share
price of RM4.81!!

3) Market leader in independent burn-in
test service provider
 
As per disclosure from annual report, the
group (Sunright Limited) is the market
leader in independent burn-in test service
provider.
 
Other than that, recently the company has
won Stmicroelectronics Awards
on"Operation Excellent & Lean Awards".
 

4) Others

 
With the recent announcement from Federal
 
Reserve that there might be rate hike in
 
coming months, the USD dollar have been
 
appreciated during May 2016.
 
 
 
But with the weak non-farm payroll
 
announced on last Friday night, the rate
 
hike might be dealyed. I am not sure
 
whether USD dollar will be recovered to a
 
higher level.
 
 
 
If the USD dollar recovered, it might be a
 
adding point to KESM as some revenue
 
generated in US dollar.
 
 
But with the release of the latest stunning
quarter result, I foresee the company will
be able to maintain or improved the result
in the next couple quarter.
 
 
Trade at your own risk!!! Do research before any investment decision!! Happy trading :-)
 
KESM (9334) - KESM (RM4.81)? Stunning quarter result, net cash company with high NTA (RM6.52)
http://klse.i3investor.com/blogs/undervalue/97852.jsp