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Bursa Malaysia - 0002
Bloomberg - KTRI:MK
Reuters - KOIN.KL
Yahoo - 0002.kl

Sector            : Healthcare
Sub Sector    : Pharmaceutical
Focus            : Pharmaceutical

Company Profile

Kotra Industries Berhad (KOTRA) is engaged in pharmaceutical and healthcare products manufacturing and trading business. KOTRA had a research and development facility in Cheng, Melaka. KOTRA has 51 members working in R&D in 2020 which will be able to launch an average of 4 products over the 5 years; 2016 - 6 products, 2017 - 7 products, 2018 - 3 products, 2019 - 3 products and 2020 - 2 products.

KONTRA have 3 brands of products

  1. Appeton

  • Nutraceutical product focus on preventive healthcare

  • consist s of 21 different health supplement products for children, expectant mothers and senior

  1. Axcel

  • Specialise in paediatric care, anti infective, dermatological and gastroenterology

  1. Vaxcel

  • Specialise in sterile antibiotic injection

KONTRA has completed Metered Dosage Inhaler Line and Pre Filled Syringe Manufacturing Line, a pioneer initiative in Malaysia and had obtain approval from National Pharmaceutical Regulatory Agency in 2019, 2 years delay from the expected completion date on 2017.

Income Statement



30 June 2020

30 June 2019

30 June 2018

30 June 2017

30 June 2016

Revenue

171,730,000

172,550,000

178,480,000

166,370,000

160,230,000

Cost of Goods Sales

42,200,000

47,010,000

52,370,000

46,200,000

47,460,000

Operating Expense

100,840,000

104,170,000

110,210,000

107,630,000

104,900,000

Earning Before Tax

25,930,000

21,360,000

15,900,000

12,520,000

7,870,000

Nett Profit

29,560,000

22,200,000

15,750,000

12,400,000

7,760,000

5 Years CAGR of Revenue

1.40 %

5 years CAGR of Nett Profit

30.67 %


KOTRA 5 years CAGR of Nett Profit increased by 30.67 % although the revenue only had a 1.40 % increase. This is mainly because KOTRA managed to reduce its cost of good sales while keeping its operating expense constant around RM 100,000,000 over the 5 year. KOTRA profit margin had increase from 4.84 % in 2016 to 17.21 % in 2020.


KOTRA revenue is derived 57 % from the local market and 43 % from the overseas market.


Balance Sheet




30 June 2020

30 June 2019

30 June 2018

30 June 2017

30 June 2016

Deferred Tax Asset

4,797,000

1,034,000

0

0

0

Account Receivable past due

10,863,000

11,376,000

14,567,000

7,720,000

8,569,000

Debt

32,300,000

44,450,000

57,700,000

73,750,000

96,930,000

Current Ratio

2.65

2.47

2.34

1.97

1.67

Cash / Current Asset

42.71 %

28.48 %

21.55 %

17.01 %

18.00 %


KOTRA deferred tax assets had increased from RM 1,034,000 in 2019 to RM 4,797,000 in 2020. 43 % of the KOTRA trade receivable in 2020 had past due. KOTRA debt had reduced significantly over the year from RM 96,930,000 in 2016 to RM 32,300,000 in 2020.


KOTRA had a current ratio above 1 over the past 5 years and increased over the years. KOTRA cash/current ratio had increased from 28.48 % in 2019 to 42.71 % in 2020.


Cash Flow



30 June 2020

30 June 2019

30 June 2018

30 June 2017

30 June 2016

Cash Flow from Operation

49,910,000

36,970,000

35,670,000

32,980,000

25,910,000

Cash Flow from Investing

12,310,000

-25,760,000

-5,910,000

-2,850,000

-9,570,000

Cash Flow from Financing

-27,650,000

-17,390,000

-25,820,000

-29,500,000

-11,670,000

Free Cash Flow

47,350,000

24,460,000

29,280,000

29,930,000

16,240,000

5 years CAGR of Cash Flow from Operation

14.01 %

5 years CAGR of Free Cash Flow

23.86 %


KOTRA has had positive cash flow from operation for the past 5 years and 5 years CAGR of cash flow from operation is 14.01 %. KOTRA had positive cash flow from investing in 2020 is due to withdrawal of fixed deposits for RM 14,000,000.


Asides that, KOTRA has a 5 years CAGR of free cash flow of 23.86 % which is about the same as the 5 years CAGR of price which is 23.75 %.


Per Share Analysis




30 June 2020

30 June 2019

30 June 2018

30 June 2017

30 June 2016

Share Outstanding 

145,470,000

143,960,000

133,600,000

133,270,000

132,460,000

Price 30 June

2.96

1.76

1.82

2.08

1.02

BV/Share

1.31

1.20

1.15

1.07

0.99

P/E

14.57

11.42

15.44

22.35

17.41

5 years CAGR of Price 

23.75 %


As of 30 June 2020, there are 5,187,600 number of the Employee Share Option Scheme (ESOS) outstanding until 2023 about 3.57 % of the share outstanding.


Dividend



31 Dec 2020

31 Dec 2019

31 Dec 2018

31 Dec 2017

31 Dec  2016

Dividend Per Share

0.09

0.074

0.05

0.02

0.00

Dividend Payout

44.29 %

47.99 %

42.41 %

21.50 %

0.00 %

Dividend Yield

3.04 %

4.20 %

2.75 %

0.96 %

0.00 %

10 year Malaysia Government Bond

2.68 %

3.33 %

4.01 %

3.94 %

4.24 %


KOTRA had high dividend payout of 44.29 % for the year 2020. KOTRA start paying out dividend from 2017. KOTRA had increased its dividends every year since it pay dividend in 2017.


Research Report


No Recent research report


Peer Analysis (Pharmaceuticals)



KOTRA

AHEALTH

DPHARMA

PHARMA

YSPSAH

P/E

18.48

25.59

35.28

47.84

16.21

Dividend Yield

3.63

1.56

2.08

2.13

3.65


KOTRA P/E is quite low compared to its peers. Only YSPSAH had lower P/E compared to KOTRA. Asides that KOTRA had high dividend yield compared to its peer.


Technical Analysis


KOTRA daily chart show a downward trench testing support of RM 2.52. If price break above RM 2.52 there might be a reversal.


KOTRA weekly chart also shows a support level at RM 2.27.



http://ivkls.blogspot.com/2021/06/stock-review-kotra-0002-kotra.html

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