As you know, Lay Hong share price has risen recently. Can it rise more? I believe it can rise more.
Lay Hong's JV with NH Foods is paying off greatly with production output at 700tons per month since November to January. With the additional 700tons per month, Lay Hong is able to reap revenue of RM13.7mil per month (RM28mil x 49%). By May, the JV will be receiving orders up to 1,200tons per month. At 1,200tons per month, revenue from JV will rise to RM23mil per month.
What can we expect of next quarter result from JV?
RM13.7mil revenue x 2.5months (November was half a month): RM34.5mil revenue from JV
At a net profit margin of 6%, you can expect additional RM2mil profit for the third quarter from JV alone
What can we expect from normal operating profit?
We can expect a recovery for third quarter. Stripping off impairment of RM7.5mil and recovery of eggs prices, we can expect revenue and profit to normalize.
How much recovery would you expect?