Today is the last day of February 2017. 2 months had passed and there is another 10 more months to to~ Our FBMKLCI had been in a rough roller coaster. All of my counters had released the QRs. Therefore it's a busy day to read... read... and... read.... I had been tracking YEELEE since 15 August 2016:
Let's dig in~
1. Fundamental Analysis
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| Revenue and Net Profit in Malaysia Stockbiz[1] |
YEELEE announced their Q4 2016 result. Both revenue and net profit shown positive improvement in qoq and yoy. Revenue increased +18% qoq and +23% yoy respectively while net profit increased +9% qoq and +9% yoy respectively. If you notice from the snapshot above, this Q4 2016 shown the highest revenue and net profit during the displayed 3 years[1]. For me, YEELEE is still a growing counter. For the whole year, FY2016's revenue improved +32%, while net profit increased +39% when compared with FY2015. The net profit margin also improved to 4.2%
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| YEELEE 5 Years Revenue and Net Profit [1] |
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To refresh back YEELEE's business, they are engaged in manufacturing division (packaging division, palm oil refinery division, palm oil mill division), trading division (consumer products), plantation division (oil palm and tea) and hospitality division (tourism in Sabah), these four big businesses. The biggest revenue contributors are the manufacturing division and trading division, which already make up to 99%. When compared against FY2015 and FY 2016, the revenue manufacturing division improved +11%, while trading division improved +43%, while for net profit, the manufacturing division improved +22%, and trading division improved +98%.
The growth in manufacturing division is due to the higher selling price of palm based products arising from the increase in CPO price, and also the removal of the Government's control celing prices imposed on the consumer pack cooking oils. For trading vision, the sales growth is supported by higher sales of cooking oils, Campbell products and beverages segment including the new distributorship of Ribena and Lucozade products, and of course not to forget about Red Bull. The consumer products will still continue to grow: people will still use cooking oils, people will still need to eat and drink. Even though the CPO price will continue to fluctuate due to La Ninaa and El Nino.
In FY 2016, YEELEE proposed 4.5 sen of dividend, which will need to go be gone through in the AGM. In FY 2015, YEELEE only gave 3.5 sen of dividend. An extra 1.0 sen of dividend, its signalling that "We are growing, and we are able to provide more dividend in the future".
2. Technical Analysis
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| YEELEE Daily Chart |
YEELEE had been in an uptrend since the day i posted about them. But the share price is very slow, but those who appreciate its business and understand its growth will still continue to hold it. YEELEE is now in the new high, supported at 2.56. The next resistance is 2.65. I believe the resistance of 2.65 will be broken as the revenue and net profit both experienced double digit growth, which is +32% and +39% respectively. The MACD is still waiting for the golden cross to happen. SMA20 is still above SMA40, signalling that YEELEE is still bullish in the mid term.
3. Projection Analysis
I am going to perform a simple peer comparison among its competitor, the same i had done in my first post about YEELEE. But this time, i removed KTC and i only compared among DKSH, HARISON and YEELEE.
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| Peer Comparison among HARISON, DKSH and YEELEE |
From here, we can see DKSH had the biggest market capitalization, hence we can say DKSH is the dragon head. If i take the average PE among these 3 counters, the average PE is 12.
Now, i take the EPS trending for YEELEE.
2014: 15.04 sen
2015: 17.51 sen (+16%)
2016: 23.47 sen (+34%)
2017: 28 sen (+20%)
I will assume an increment of 20% for the EPS. The manufacturing and trading division will still remain the biggest contribution. For manufacturing division, the CPO price will be above RM2,000 and YEELEE will still producing the palm oil for daily usage. For trading division, Ribena and Lucozade's sales be reflected full year in 2017. Red Bull sales will have consistent grow. Hence, 23.47 x 20% = 28.16, the projected EPS is 28 sen.
With the PE and projected EPS, the projected price at the end of 2017 is around = 28 sen x 12 = 3.38, if round it down, then let's set at around 3.30.
Another situation is with the average PE of 12 and the current EPS of 23.47 sen, the share price is 2.82. In the short term, i hope YEELEE can reach to 2.80.
From the current price of 2.60 to 3.30 in a year, there is still another 27% of upside. And if everything is as per what we had projected and estimated, the share price of 3.30 is reachable. Let's not be too hype or too optimistic. Let's just hold and see whether YEELEE can perform the magic or not. Still, we should remember to read the Annual Report 2016 and see whether the management pledge any surprise prospect for us.
Summary:
YEELEE is definitely a little Red-Riding-BULL riding on the CPO price and Ribena:
- Riding on the wind of rising consumer power and CPO price
- YEELEE is a growing counter, its revenue and net profit grows each quarter.
- Distributes a lot of famous consumer products, Spritzer, Helang Oil, Neu Vida, Morning Kiss toothpaste, Red Bull energy drinks, Sabah Tea, you can name it, they got it~
- Well diversified with manufacturing division, trading division, plantation division and hospitality division. The best thing is YEELEE had the complete business cycle for the palm oil. From plantation of the palm oil, to the processing from the CPO to cooking oil, as well as packaging and sell them at the consumer shelves.
- Both manufacturing and trading division is the biggest revenue contribution for YEELEE.
- With the new distributorship license from Suntory, Ribena and Lucozade is expected to boost up the trading division's sales, coupled with the ongoing Red Bull Energy Drink sales, things are looking bright for YEELEE.
- The resistance is 2.65 and the support is at 2.56. The resistance is expected to be broken due to the YOY double digit growth.
- YEELEE is a growing counter, its revenue and net profit grows each quarter.
- Distributes a lot of famous consumer products, Spritzer, Helang Oil, Neu Vida, Morning Kiss toothpaste, Red Bull energy drinks, Sabah Tea, you can name it, they got it~
- Well diversified with manufacturing division, trading division, plantation division and hospitality division. The best thing is YEELEE had the complete business cycle for the palm oil. From plantation of the palm oil, to the processing from the CPO to cooking oil, as well as packaging and sell them at the consumer shelves.
- Both manufacturing and trading division is the biggest revenue contribution for YEELEE.
- With the new distributorship license from Suntory, Ribena and Lucozade is expected to boost up the trading division's sales, coupled with the ongoing Red Bull Energy Drink sales, things are looking bright for YEELEE.
- The resistance is 2.65 and the support is at 2.56. The resistance is expected to be broken due to the YOY double digit growth.
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Let's Ride the Wind and Gainvest
Gainvestor 10sai
1 March 2017
12.30am
12.30am
Sources:
[1]: http://www.malaysiastock.biz/Corporate-Infomation.aspx?securityCode=5584
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