Tecguan- hit by weaker CPO & cocoa prices
For QE31/1/2013, Tecguan incurred a pre-tax los of RM15.9 million on a revenue of RM35.8 million. Its profit attributable to shareholders came in at RM23.4 million after it recorded a surplus of RM39.3 million from the revaluation of land, building & biological assets.
Table 1: Tecguan's last 8 quarterly results
Looking at Chart 1, we can see that Tecguan's losses for the current year was due to losses from both its Oil Palm & Cocoa products division. This is a complete reversal from last year when both divisions recorded positive result. How did Tecguan record a loss in the Oil Palm division?
Chart 1: Tecguan's Segmental Performance for 9-month for FY2013, FY2012 & FY2011
Chart 2: Tecguan's last 23 quarterly results
Financial Position
Tecguan's financial position as at 31/1/2013 is deemed weak, with current ratio barely above unity and gearing ratio at an elevated level of 0.82 time.
Valuation
Tecguan (closed at RM0.67) is now trading at a PB of 0.4 time (based on NTA of RM1.68 ps. as at 31/1/2013). Being a loss-making company, Tecguan does not have a PE ratio.
Technical Outlook
Tecguan is in a long-term downward channel. In addition, the stock is range-bounce between RM0.50 & RM0.80.
Chart 3: Tecguan's monthly chart as at Mar 28, 2013 (Source: Tradesignum)
Conclusion
Based on poor financial performance, weak financial position and poor technical outlook, I revise the rating for Tecguan to a SELL.
Tecguan- powered higher by palm oil business
Teck Guan Perdana Bhd ('Tecguan') is involved in the two main businesses:
1) Oil Palm products business, where it owns oil palm plantation as well as operates a kernel crushing plant; and
2) Cocoa products business, where it manufactures & sells cocoa products as well as trades in dried cocoa beans.
In the past 4 years, Tecguan's cocoa products business has shrunk while the oil palm products business has grown significantly. The bulk of Tecguan's oil palm products business comes from the kernel crushing plant as the acreage of its oil palm estates is only 2020 acres. Based on this small acreage, we can deduce that 10-15% of its turnover came from FFB sales while the balance came from sale of kernel oil.
Table 1: Tecguan's 1Q Segmental Results for the past 4 FY
Part of a large Conglomerate
Tecguan is a part of the HTG Holdings Sdn Bhd group of companies. Its business dealings with related companies could be fairly extensive. This situation could become problematic when substantial amount of money is owing to its holding company while equally large amount is due from related companies. For example, if you look at the Annual Report for FY2010, there is an amount due from a related company of RM70.6 million, which was classified under Current Assets. Tecguan in turn owed its holding company RM79.1 million, which was classified as Non-current Liabilities. It also owed related companies a total of RM13.5 million, which was classified as Current Liabilities. All amount advanced or owed carries interest at a rate of 5.55% pa.
In its detailed accounts for QE30/4/2011, Tecguan's Trade & Other Receivable dropped to RM17.8 million from RM73.4 million as at 31/1/2011 while its Cash Balances increased to RM46.4 million from RM11.5 million. On the Liabilities side, the Other Payables (which should include the Amount due to Holding Company) dropped slightly from RM78.6 million to RM64.2 million.
Recent Financial Results
Tecguan's financial performance has improved significantly over the past two quarters. When compared to last year, Tecguan's net profit increased by 52% despite an unchanged turnover. Net profit has however declined by 20% q-o-q to RM4.0 million despite a 22%-increase in turnover to RM54 million. The decline in bottom-line on a q-o-q basis is due mainly to lower FFB prices.
Table 2: Tecguan's last 8 quarterly results
Chart 1: Tecguan's last 16 quarterly results
Financial Position
Tecguan's financial position as at 30/4/2011 is deemed satisfactory, with current ratio at 3.3 times and debt to equity ratio at 0.3 time. Tecguan was holding cash balances of RM46 million as at 30/4/2011. However, this cash position is likely to be money advanced by its holding company for unspecified purposes. In the past, the money has been on-lend to related companies.
Valuation
Tecguan (closed at RM0.83 at end of the morning session) is trading at a PE of 2 times (based on annualized EPS of 40 sen). Even adjusted for the current slide in the price of CPO, Tecguan is deemed very cheap.
Technical Outlook
Tecguan has been in a bottoming phase from 2006 until early this year. It broke above its strong horizontal line at RM0.80 today. Its next resistance is the horizontal line at RM0.95-1.00.
Chart 2: Tecguan's monthly chart as at June 27, 2011 (Source: Quickcharts)
Conclusion
Based on good financial performance and attractive valuation, Tecguan can be a good stock for long-term investment. The upside breakout above the RM0.80 horizontal line could signal the start of a new upleg; thus, a possible trading BUY. However, Tecguan is such an integral part of the HTG group of companies that it is bound to be afflicted with issues of corporate governance and transparency. These issues could affect investors' enthusiasm for the stock.
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22 July 2010
tguan, tecguan ?
tsh up 7sen to 191sen
冷门股tecguan (teck guan perdana），全日上升29% ，闭市62sen
毫不相干的塑料股，tguan （thong guan industries） ，也应声上涨！！！？？？
全天起 26% ，闭市 114sen。
它有卖茶叶，但业务不到10%，也没有可可产品。
关于我对可可市场的解读：
如果没错，TSH没有种可可， 只是加工和销售（买卖可可豆和加工可可豆） ，这些和可可有关（或无关）的股票，很可能炒一个存货增值的题材。
我国可可收成季节是10，11，12月， 可可价格强势必须撑到那个时候才可以。没有收成，就只能靠存货提升公司价值。 当然，TSH没有种可可，因此没差。
这种突如其来的期货盘口，60%是泡沫，炒家做高行情，高处派发，越派越低。今年的钢铁就是如此。
我觉得市场不是大好，就是大坏，如果全世界的坏天气没有想象中的坏的话。
为什么说，这种期货盘口是泡沫？我不会解释，是感觉。
今年年头，中国和巴西淡水河谷谈判钢铁价，全球市场哗然，我们回顾就可以知道这是泡沫，同样的其他商品，只要被中国的谈判团做坏行情，都不会有好结果的，前年的钾肥就是如此。
虽然说全球的天气不好，但我认为可可不是极度的必需品，还轮不到它来领涨。
真正领涨的，是能充饥的农作物，例如小麦，稻米。
至于黄豆油和棕油，只能做陪衬的角色。我们可以从近期的软商品看出差别，黄豆肉渣涨了20%，黄豆油只有7%的涨幅， 而棕油，因为马印两国供应增加的疑虑升高，更显得弱势。
追踪7月20号的最新出口数据，棕油的出口是呈现下跌的。
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Thursday, September 27, 2012
tecguan
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