Author: YiStock
By now, most investor should have realised the potential growth of frontken taiwan business.
Let straight to the point.
Let examine the Q2 2017 result.
On Revenue:
| Semi-con | Engineering | ||||||
| Frontkn | total | total | |||||
| Revenue (mil) | Twn | Sg | My | Phi | Indon | China | |
| 2013Q1 | 13,948 | 29,732 | 18,027 | 7,205 | 3,637 | 300 | 563 |
| 2013Q2 | 16,197 | 27,670 | 15,156 | 8,379 | 3,068 | 384 | 683 |
| 2013Q3 | 17,839 | 33,496 | 21,049 | 8,652 | 2,843 | 358 | 594 |
| 2013Q4 | 17,746 | 40,471 | 25,516 | 9,416 | 4,403 | 697 | 439 |
| Total | 65,730 | 131,369 | 79,748 | 33,652 | 13,951 | 1,739 | 2,279 |
| % from total biz | 33.35% | 66.65% | |||||
| 2014Q1 | 17,915 | 31,791 | 17,046 | 10,753 | 3,017 | 758 | 217 |
| 2014Q2 | 20,350 | 55,589 | 13,796 | 38,841 | 2,693 | 259 | 0 |
| 2014Q3 | 22,807 | 63,028 | 14,490 | 45,731 | 2,807 | 0 | 0 |
| 2014Q4 | 31,195 | 77,777 | 21,666 | 52,650 | 3,028 | 433 | 0 |
| Total | 92,267 | 228,185 | 66,998 | 147,975 | 11,545 | 1,450 | 217 |
| % from total biz | 28.79% | 71.21% | |||||
| 2015Q1 | 23,456 | 55,765 | 13,205 | 37,905 | 3,811 | 844 | N/A |
| 2015Q2 | 25,913 | 42,829 | 13,318 | 25,173 | 3,815 | 523 | |
| 2015Q3 | 29,417 | 41,773 | 14,877 | 22,221 | 3,930 | 745 | |
| 2015Q4 | 30,254 | 38,718 | 12,410 | 21,548 | 4,289 | 471 | |
| Total | 109,040 | 179,085 | 53,810 | 106,847 | 15,845 | 2,583 | 0 |
| % from total biz | 37.84% | 62.16% | |||||
| 2016Q1 | 26,848 | 32,449 | 9,688 | 17,779 | 4,371 | 611 | N/A |
| 2016Q2 | 30,714 | 33,317 | 11,383 | 16,872 | 4,207 | 855 | |
| 2016Q3 | 33,785 | 31,405 | 9,931 | 16,350 | 4,328 | 796 | |
| 2016Q4 | 36,908 | 39,763 | 15,966 | 17,532 | 5,482 | 783 | |
| Total | 128,255 | 136,934 | 46,968 | 68,533 | 18,388 | 3,045 | 0 |
| % from total biz | 48.36% | 51.64% | |||||
| 2017Q1 | 35,444 | 32,097 | 13,689 | 13,444 | 4,796 | 168 | |
| 2017Q2 | 41,114 | 29,700 | 12,617 | 12,614 | 4,173 | 296 | |
| Total | 76,558 | 61,797 | 26,306 | 26,058 | 8,969 | 464 | 0 |
| % from total biz | 55.33% | 44.67% |
Key Observation:
1) The revenue from taiwan has increased
by 16% against Q1 2017. It is also the record high revenue contribution
from Taiwan segment. This should exclude the contribution from
additional stake purchase by frontken which completed toward the end of
Q2 2017. Therefore, the exponential revenue should be seen in coming quarters to accompany with much higher growth of world semi-conductor industry.
2) The low activity on oil & gas sector is as expected.
On Profitability:
| Semi-con | Engineering | |||||||
| Taiwan biz % margin | Operating Profit (mil) | Twn | Sg | My | Phi | Indon | China | |
| 5.64% | 2013Q1 | 787 | 1,547 | 819 | 518 | 516 | -278 | -28 |
| 17.62% | 2013Q2 | 2,854 | -1,814 | -523 | -1,215 | 365 | -175 | -266 |
| 18.95% | 2013Q3 | 3,380 | -364 | 945 | -379 | 348 | -926 | -352 |
| 12.54% | 2013Q4 | 2,226 | 803 | 1,232 | -243 | 646 | -242 | -590 |
| 14.07% | Total | 9,247 | 172 | 2,473 | -1,319 | 1,875 | -1,621 | -1,236 |
| % from total biz | 98.17% | 1.83% | ||||||
| 12.86% | 2014Q1 | 2,303 | 955 | -115 | 795 | 564 | 329 | -618 |
| 17.36% | 2014Q2 | 3,532 | 163 | -1,996 | 2,914 | 377 | -563 | -569 |
| 16.76% | 2014Q3 | 3,823 | 5,227 | 973 | 4,065 | 369 | -3 | -177 |
| 14.09% | 2014Q4 | 4,395 | 5,687 | 2,361 | 4,709 | 317 | -181 | -1,519 |
| 15.23% | Total | 14,053 | 12,032 | 1,223 | 12,483 | 1,627 | -418 | -2,883 |
| % from total biz | 53.87% | 46.13% | ||||||
| 21.50% | 2015Q1 | 5,042 | 5,971 | -434 | 5,571 | 783 | 51 | N/A |
| 22.46% | 2015Q2 | 5,819 | -4,076 | -1,644 | -2,932 | 757 | -257 | |
| 24.03% | 2015Q3 | 7,069 | -4,842 | 1,043 | -6,415 | 690 | -160 | |
| 8.77% | 2015Q4 | 2,652 | 911 | 255 | 229 | 824 | -397 | |
| 18.88% | Total | 20,582 | -2,036 | -780 | -3,547 | 3,054 | -763 | 0 |
| % from total biz | 110.98% | -10.98% | ||||||
| 10.16% | 2016Q1 | 2,727 | -672 | -4,192 | 2,934 | 731 | -145 | N/A |
| 21.55% | 2016Q2 | 6,620 | 1,913 | -881 | 1,972 | 821 | 1 | |
| 24.75% | 2016Q3 | 8,363 | 803 | -1,265 | 1,213 | 796 | 59 | |
| 16.85% | 2016Q4 | 6,220 | 7,137 | 5,202 | 1,080 | 862 | -7 | |
| 18.66% | Total | 23,930 | 9,181 | -1,136 | 7,199 | 3,210 | -92 | 0 |
| % from total biz | 72.27% | 27.73% | ||||||
| 20.21% | 2017Q1 | 7,164 | 2,162 | 221 | 1,530 | 889 | -478 | N/A |
| 22.38% | 2017Q2 | 9,203 | 1,092 | 549 | 147 | 737 | -341 | |
| #DIV/0! | 2017Q3 | 0 | ||||||
| #DIV/0! | 2017Q4 | 0 | ||||||
| 21.38% | Total | 16,367 | 3,254 | 770 | 1,677 | 1,626 | -819 | 0 |
| % from total biz | 83.42% | 16.58% |
Key Observation:
(1) Oil and gas segment - Looks stable
(2) Taiwan Ares Green - Doing Fantastic!!! Operating profit surged nearly 29% compared to Q1 2017.
Outlook:
Oil and gas should remain stagnant, the growth continue to come from Taiwan Ares Green.
On Balance Sheet:
(1) cash level stable compared to Q1 2017 at around RM 108 mil. Or equivalent to RM 0.10 per share.
(2) Increase in receivable, inventory and payable. Continue drop in non-current liability
On valuation:
current PE stood at 13.13. Reasonable to me.
Conclusion:
I will continue to hold and probably add some if price retrace a bit.
Cheers,
YiStock
投资股票除了守， 还是守。 好的公司要时间。
http://klse.i3investor.com/blogs/frontkn/130794.jsp
http://klse.i3investor.com/blogs/frontkn/130794.jsp
