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KARYON (0054) KARYON INDUSTRIES BHD  - STRONG-DEMAND PRODUCTS & MARKETS, QUALIFIED FOR EXPANSION
KARYON
Safeguarding Public Health via Its Own-Manufactured Disinfectants
 
  • SELLING STRONG-DEMAND PRODUCTS IN A STRONG-GROWTH NICHE
  • CAPTURING THE VALUE CHAIN, ESTABLISHED PRESENCE ACROSS ASIA
  • DECENT FINANCIAL PERFORMANCE, READY TO SEIZE EXPANSION OPPORTUNITIES



Overview


Having presence in Malaysia, Asia, Africa and others, Karyon manufactures and distributes oleochemical products –Residential, commercial and industrial disinfectants, foam booster, concentrated detergent paste, washing detergent and toiletries.



Karyon also sells polymeric products, including polyvinyl chloride (PVC) compound, plastic additives and industrial chemical products.

SELLING STRONG-DEMAND PRODUCTS IN A STRONG-GROWTH NICHE
With the outbreak of the coronavirus, the WHO encourages people to take more aggressive steps to prevent the widespread of the virus, especially in offices, public areas, public transportations, hospitals or places where the infected patients are being treated. Disinfectants have been strong-demand products.
The increasing demand for disinfectants and sanitizers as preventive measures against COVID-19 has resulted in changing the dynamic of the market. People are stockpiling and the market has witnessed a high demand during the epidemic and is anticipated to grow in the coming years due to the growth in the adoption of cleaning supplies and more awareness.
According to market research, the Surface Disinfectant The surface disinfectant market is expected grow at a CAGR of 8.3% and reach up to USD 1.53 billion by 2027.


Source: PR News Wire

Karyon’s disinfectant products serve exactly this market and demand.

CAPTURING THE VALUE CHAIN, ESTABLISHED PRESENCE ACROSS ASIA
Contrary to many small companies that just distribute disinfectants, Karyon manufactures and distributes them. This enables the Karyon to achieve stronger bargaining power and better cost control. With established presence across Asia, Karyon is able to sell their products effectively.

DECENT FINANCIAL PERFORMANCE, READY TO SEIZE EXPANSION OPPORTUNITIES
Karyon has been consistently profitable since 2013.  The latest quarter earnings took a dip due to March’s MCO and the sudden, forced factory closure. Nonetheless, Karyon has fully resumed its operation since mid-April. Karyon is now proactively expanding its existing revenue-generating businesses by developing competitive products and related downstream industries.

Source: Latest QR
With a current ratio of 5.0x, Karyon has absolutely no problems meeting short term financial obligations.
In fact, coupled with its net-cash position, Karyon should be qualified to expand its disinfectant business across Malaysia, Asia, Africa and others, thereby seizing the market opportunities.

VALUATION
Karyon has an NTA of 22.5 sen. The share price is now hovering slightly below its NTA. At a PER of 15x, it is slightly lagging behind other healthcare stocks under current market situation.

DISCLAIMER
The article is for sharing purpose only. There is no buy/sell recommendation.

https://t.me/jomnterry

https://klse.i3investor.com/blogs/jomnterry/2020-08-06-story-h1511560638-KARYON_STRONG_DEMAND_PRODUCTS_MARKETS_QUALIFIED_FOR_EXPANSION.jsp
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