HIL - an undiscovered gem as it has quietly started producing face mask and face shield. Unlike other listed companies who are in the process of buying equipment to install after making announcement to Bursa of their plans, HIL has been producing face mask and face shield for a month now. As a family run company, they have not gone out to aggresively market their products but have registered their masks with Medical Device Authority (MDA). WIth MDA, their products can be sold throughout Malaysia.
Even with minimal marketing efforts, the masks receive good response thanks to their corporate clients such as Perodua. Manufacturing of face mask is easy for HIL as it currently also manufactures auto parts for the likes of Perodua. It currently has one machine to produce face masks now. It intends to triple capacity by adding another 2 machines based on the almost 100% take up currently.
Apart from corporate clients, management is also targeting government schools.
Margin is good depsite the stiff competition. This is a new product to HIL and management is expected to improve the quality, supply & cost further.
Not content with just local sales, they have submitted and now awaiting results from Singapore on the mask efficiency. They are also in ealy stages of securing a client in India and thats why the need to triple capacity.
HIL is debt free with net cash of RM89m (as at Mar'20), which means 30% of market cap is in cash. HIL's other businesses are plastic manufacturing and property. Both are profitable with 2019 revenue split at 56% (plastic) and 44% (property).
Given the many annoucement of companies venturing into face masks, HIL stands head and shoulders above the rest given its track record in plastic manufacturing, net cash company and face mask manufacturing business that has already started. Expect a pick up in earnings in the coming quarters.