Scan of Malaysia’s Consumer Industry:
Consumer sector is in boom this year
due to higher operating costs for consumer companies this year on an
account of forthcoming Government policies.
Coming in with 0.93% year-on-year gain
for the year ended December 2013, the consumer services industry
under the FTSE EMAS Index is one of the handful of industries that
ended in the positive territory last year. This covers broad view of
businesses which is most affected by the Budget 2014’s policies
viz. fiscal debt, shrinking current account surplus and growing debt
pile.
With policies such as the
implementation of goods and services tax come April 2015 as well as
reduced subsidies, the consumer services industry is expected to
mellow from the rising cost of living this year.
Consumer spending is likely to
experience slower growth from lower purchasing power and disposable
income although selective bright spots exist. Higher tourist flows
into the country in conjunction with Visit Malaysia Year 2014 is
expected to mitigate the slowdown in domestic consumer spending.
While the outlook for the industry
appears to have dimmed, not negative for the consumer industry in
Malaysia. Looking into the Visit Malaysia Year 2014 initiative,
Malaysia is targeting to attract 28 million in foreign tourist
arrivals with up to 13.2 million tourist arrivals from Singapore to
the country this year. This is certainly good news for the travel and
leisure sector of the consumer industry. Noticing, the gaming sector
pops to mind when it comes to tourism in Malaysia.
Current Volume: 659,818
Current Change: 4.650
Current Change %: 0.78
Sector Allocation Chart by Turnover
Consumer Industry lifted the
FBMKLCI Market by 30.81% followed by Trade/Service (24.83%), Finance
(11.50%), Properties (10.30%), Technology (9.11%) and
Industry-Production (7.83%).
ANALYSIS:
This sector has been “underweight”
since long time and it moved within the range of 590.782-582.432, but
now it is in good pace to boom the Malaysian Economy maintaining a
sharp uptrend.
Trading Facts for Top Gainers
Comprising Consumer Industry:
| TOP GAINERS |
CHANGE |
CHANGE% |
LAST RATE |
HIGH |
LOW |
VOLUME |
| MSPORTS |
0.03 |
16.67 |
0.21 |
0.215 |
0.185 |
48,81,900 |
| SINOTOP |
0.005 |
9.09 |
0.06 |
0.065 |
0.055 |
24,51,100 |
| CAB |
0.07 |
7.91 |
0.955 |
0.975 |
0.88 |
1,11,58,600 |
| TPC |
0.03 |
7.79 |
0.415 |
0.43 |
0.38 |
11,06,800 |
| MFLOUR |
0.11 |
5.76 |
2.02 |
2.03 |
1.88 |
31,42,400 |
| HOVID |
0.02 |
4.49 |
0.465 |
0.465 |
0.44 |
76,01,800 |
| BIOOSMO |
0.005 |
3.33 |
0.155 |
0.155 |
0.15 |
20,92,100 |
| GPHAROS |
0.025 |
2.69 |
0.955 |
0.96 |
0.92 |
11,80,500 |
| PELIKAN |
0.03 |
2.52 |
1.22 |
1.23 |
1.17 |
16,26,600 |
| EURO |
0.01 |
1.57 |
0.645 |
0.67 |
0.64 |
41,29,900 |
| UMW |
0.18 |
1.54 |
11.88 |
11.9 |
11.7 |
31,12,800 |
| TEOSENG |
0.02 |
1.42 |
1.43 |
1.44 |
1.35 |
20,69,500 |
| LIONFIB |
0.01 |
0.86 |
1.17 |
1.18 |
1.14 |
9,48,000 |
Highlighting HOVID BHD addressing
Consumer Industry
Hovid Berhad is engaged in the
manufacture and sell of pharmaceutical and herbal products. The
company operates through two segments, Pharmaceutical and
Phytonutrient. It is involved in extracting and processing nutrients
from palm oil for manufacturing and producing pharmaceutical,
phytonutrient, and oleochemicals/biodiesel products. The company
offers special drug delivery systems, including modified release
formulations and bio-availability enhanced formulations; ethical
products, such as anti-biotics, anti-diabetics, anti-hypertensives,
and anti-malarial and anti-inflammatory analgesics; dietary
supplements; and consumer products, as well as extracts palm
tocotrienol complex, mixed carotenoid complex, and phytosterols from
palm fruits. It also owns and manages a chain of concept stores
selling over-the-counter health food products, consumer products,
supplements, and herbal products. In addition, the company is engaged
in establishing, maintaining, and operating laboratories and shops
for carrying on chemical, physical, and other research and
development activities in medicine, chemistry, industry, and other
fields. Further, it is involved in trading and marketing
pharmaceutical products, medical supplies, and health and wellness
products. Hovid Berhad operates in Asia, Africa, North and South
America, and the Pacific Island. The company is based in Ipoh,
Malaysia.
P { margin-bottom: 0.21cm; }
FUNDAMENTALS:
Comparison of Income, Balance Sheet and
Key ratios on Previous Year over Year basis showing Growth of the
Company.
- Company is having strong
fundamentals which are constantly increasing on Y-o-Y basis.
- Operating margin increased over
three fiscal years 30/06/2011 to 30/06/2013, it evaluate what
proportion of a company's revenue is left over after paying for
variable costs of production such as wages, raw materials, etc. A
healthy operating margin is required for a company to be able to pay
for its fixed costs, such as interest on debt. More is the operating
margin, more is the dollar per sales.
- Return on Equity Capital is
important to equity shareholders who are interested to know profits
earned by the company and those profits which can be made available
to pay dividends to them. Interpretation of the ratio is similar to
the interpretation of return on shareholder’s investments and
higher the ratio better is.
- Current Ratio is ability to pay
short-term obligations. The higher the current ratio, the more
capable the company is of paying its obligations. A ratio under 1
suggests that the company would be unable to pay off its obligations
if they came due at that point. While this shows the company is not
in good financial health, it does not necessarily mean that it will
go bankrupt - as there are many ways to access financing - but it is
definitely not a good sign.
- The debt-to-capital ratio
addresses the company's financial structure, or how it is financing
its operations, along with some insight into its financial strength.
The lesser the debt-to-capital ratio, the lower debt that company
has compared to its equity.
RECENT ANNUONCEMENTS:
As per the recent announcement,
Directors of the Company of their intention to deal in the securities
of Hovid during the closed period pending the announcement by Hovid
of its results for the financial quarter ended 30 June 2014.
286,776,400 no. shares are
directly held by the Chairman and Managing Director.
331,555 no. shares are directly
held by the Executive Director.
1,765,830 no. shares are directly
held by the Executive Director.
Interim Dividend of 0.5 cents per share
under the single tier system for the financial year ending 30 June
2014.
OUTLOOK:
Hovid is looking to export to emerging
markets and the Middle East, which it has yet to tap. Its export
contributions may increase to 56% in the financial year (FY) 2016,
should this expansion prove successful. Hovid is set for a good
FY2015 ahead, given abundant opportunities in both domestic and
global pharmaceutical markets. We anticipate that its net profit may
grow at a CAGR of 18.5% in FY2014-2016 or RM20.7 million to RM32.7
million, on the back of growing affluence, health awareness and
healthcare expenditure in the markets that it operates in.
Hovid is good for its robust revenue
pipeline, strong and wide exposure to the export market, and decent
return on equity of 12-13% in FY2014-2015.
OUR VIEW:
As per the Fundamentals, HOVID is good
for generating profit. Technical also support the Stock as EMA 20 DAY
is above its EMA 50 DAY and share prices lied above the major support
0.415.
8:47 PM
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