INVEST DOMINAN NOW, FUTURE CAN GENERATE 10% ROI FROM DIVIDEND. CASH COW GOOD BUSINESS SOLID DIVIDEND PAYMENT RECORD. NO TIME TO MISS

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With MALAYSIA OPR rate shrinking down, FIXED DEPOSIT RATE had been dropping and interest income are affected greatly. 2 years back, the FD PROMOTION RATE can be as high as 4.5% PER ANNUM. At the current market scenario in 2020, the FD PROMOTION RATE can only go as high as 2% PER ANNUM, and the OPR RATE will be expected to stay low for sometime until economy recover and pick up again.

How long the market will takes to recover? How long will it pick up again? Will it stay low for a few years? 2 years? 3 years? 5 years?

If that is your concern, maybe is time to take some time and look for some dividend income that had better yield, steady and also had good management.

The one company I am looking into is DOMINAN 7169 (DOMINANT ENTERPRISE BERHAD).

This company main business is to supply raw material to furniture company for their manufacturing. Furniture plywood and skirtings. Dominan also supplies so construction material as their expansion business.

Dominant will also be looking to create a stream of steady rental income this year after their warehouse factory is ready and already have ready tenant to rent their commercial property.

Most importantly, investor have to know that this company is not a goreng goreng stock, the company owner always prioritize shareholder value, and dividend payment every quarterly.

DOMINAN had been paying dividend without fail since 2005.

Why the current price is very attractive for you to invest into DOMINAN.

1. The company had good and strong record of paying dividend. Here are the past 4 years total dividend that the company had paid out to shareholder.

YEAR 2017 - TOTAL DIVIDEND PAID IS 5 CENTS

YEAR 2018 TOTAL DIVIDEND IS 7 CENTS

YEAR 2019 TOTAL DIVIDEND IS 7 CENTS

YEAR 2020 TOTAL DIVIDEND IS 4 CENTS 

WHY FYE 2020 TOTAL DIVIDEND PAID IS LESSER ?

REASON IS SIMPLE, NOW THE WHOLE WORLD GOT COVID-19 SITUATION, AND DOMINAN SUFFER FROM A 3 MONTH LOCKDOWN ON OPERATION. THE IMPACTED THE REVENUE, HENCE THE LOWER DIVIDEND PAY OUT

HOWEVER, THE CURRENT FURNITURE LANDSCAPE AT MUAR, JOHOR IS OPERATING AT MAX CAPACITY. ORDER ARE PILLING UP AND FURNITURE MAKER ARE ALL BUSY FULFILLING ORDERS.

COMPANY LIKE POHUAT WHICH HAVE OPERATION IN MUAR AND VIETNAM ARE BOOMING WITH ORDERS.

DOMINAN ALSO HAVE OPERATION AT MUAR JOHOR AND VIETNAM.

BOTH ARE FURNITURE HUB IN SOUTHEAST ASIA!!!

SO WILL DOMINAN BUSINESS CONTINUE TO BE LOW ? OR THE BUSINESS WILL REBOUND?

IF BUSINESS REBOUND, WILL THE DIVIDEND GO BACK UP?

LETS SAY U ARE INVESTING AT 70 CENTS NOW, GIVE ANOTHER 1 YEAR, DOMINAN BUSINESS REGAIN TRACK AND CONTINUE PAY BACK 7 CENTS DIVIDEND A YEAR, MEANS YOU ARE GETTING 10% ROI ON DOMINAN DIVIDEND

RULES OF 72, BASED ON 10% ROI OF DIVIDEND, YOU WILL RECOUP ALL YOUR INVESTMENT FROM DOMINAN IN 7 YEARS!!!!

NOW THIS IS UR CHOICE TO SEE IF DOMINAN AT THE CURRENT PRICE WORTH FOR YOU TO TAKE THE RISK

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US CHINA Trade War - Look not on casualties, but the beneficiaries.

Hi all reader and investor again.

This month of May is a real challenge for those who are trading for a living. The volatility is max with trade war brewing at a full scale with US imposing tariffs on China and China countered with their tariffs as well.

Market is bad, companies stocks are shaken. But I believe that every big shaking is also a big opportunity here. While trade war hurts the global economy somehow, but I think some of the Malaysian industry will stand to benefit from such event.

I believe the trade war will benefit Malaysian export market, especially the furniture market.

The key reason are
1. Malaysian furniture exporter benefit from a stronger USD
2. Demand shifting to Malaysia due to no tariff
3. US economy is still strong

While there are many key companies involved in the furniture market, namely Liihen, Latitude, Pohuat, and Jaycorp to name a few, today I will focus on the Jaycorp due to it's good prospect looking forward.

Investing in Jaycorp Berhad

1. Why is Jaycorp interesting? 

One of the most important factor in investing will be the fundamental of the company. The company must be having good earning, and pay dividend.

This is the past 3 quarterly result of Jaycorp.

Sep 2018

December 2018

March 2019

So for the past 3 quarter of Jaycorp, the company already made
3.4 cent + 4.69 cent + 3.67 cent = 11.76 cent

Dividend paid in the 9 month time frame = 8 cents ( 5 + 3)


So you can see this is a company that is doing well, have decent earning and is paying dividend to it's shareholder.


2. Jaycorp is heading for a new uptrend

The share already fallen from a height of RM 1.60 and consolidating at 90 cent range. Now it is the time for the company to make a new come back after breaking away from long term downtrend resistant line that is back with good result for 3 consecutive financial reports. (9 months)


3. Jaycorp to benefit from a weaker MYR

The latest measure of BNM to cut 0.25% in OPR will also see MYR floating lower against USD.
Source: https://www.thestar.com.my/business/business-news/2019/05/07/bank-negara-lowers-opr-by-25bps-to-3pct/

According to technical chart, the USD/MYR already broke resistant and looking to trend higher, potentially visiting the range of 4.2x to 4.3x

Conclusion

Since there are a lot of indicator pointing towards the positive outlook for furniture industry, Jaycorp will be very interesting for the next coming few months.

Assuming the coming quarter report to produce 4 cents in earning, that will bring a total 4 consecutive quarter earning to 15.76 cents

Simple valuation of PE X10, Jaycorp can see valuation at RM 1.50 to RM1.60

At the current price of RM 0.95, this will be more than 50% capital appreciation for the investor now. Now is the best time to invest when Jaycorp is low while the potential is high.

You are not a good enough investor until you see this

Red Alert to all Investor, Trader and Punter of KLSE.

Today need to informed everyone of this champion stock of 2019, which is Johotin.

Johotin sound like a tin manufacturing company for you at first sight. While this is not entirely wrong, it is important to know that Johotin already diversified their core business into F&B manufacturing which focuses on dairy related products. Now, the revenue and profit generated from diary division had surpassed the one from tin manufacturing.

Taken out from the previous quarterly report, you can see that F&B contributed 75% on revenue, and around 67% on profit before tax. This is to note that contribution from the F&B division do not resemble a full capacity operation mode.

The very reason I am writing this is to tell about the potential of the investment in Mexico that will give Johotin the ultimate bottom line boost in the future revenue and profit.

https://www.thestar.com.my/business/business-news/2017/04/12/johore-tin-unit-to-make-us2mil-investment-in-mexico/

Although this expansion is very big and crucial for Johotin, but it had been lacking of coverage from analyst, which is why I am here to do the noble job of informing all the investor, trader and punter alike to be on the look out for Johotin.

First of all, currently all the operation are processed in Malaysia, which means milk powder are sourced from overseas, tin plates locally, and sugar are purchased on Malaysian market price.

According to the local prices, 1kg of Sugar will cost RM 2.85 for coarse sugar, and RM 2.95 for fine granulated sugar. But most of you do not know that at the international level, sugar price is actually trading around RM 1.20 per kg. This means that manufacturer in Malaysia is paying more than double on the international price.

Sugar prices had been in a depressed mode, and is trading at the range of 13 cents for 1 pound, which is around RM 1.17 per kg (based on exchange rate USD 1 to RM 4.10)

If Johotin is to move it's production into Mexico, the raw material of Sugar will be greatly decrease, hence increasing operating profit. It makes good sense to set up factory in Mexico because Mexico is the top 10 (rank no.6) in sugarcane production, which will put sugar trading at competitive prices.

Question now - If Johotin sugar price input from the current RM 2.85 shrink down into RM 1.20 per kilogram, what is the positive impact in terms of operating profit.

To answer you this good question, I have to show you some projection which is done by professional analyst. This is taken from TAOnline research paper.
http://eas.taonline.com.my/research/Dco/CR_7167_171025.PDF

For every 5% increase in raw material cost within the F&B segment, Johotin net profit is expected to decline 34%.

So, if raw material decrease 5%, will net profit increase 34% ? I think probably not.

But, what if raw material decrease 57%, from RM 2.85 to become RM 1.20 per kilogram ? Will Johotin profit at least increase 50% ? I believe that this can be within the range of expectation.

As I had already outlined, not many analyst and investor noticed about Johotin coming future potential and earning power. At RM 1.20, I think Johotin is still very reasonably undervalued and much more potential to be unveiled in the future.

I had to be honest that I had held Johotin for more than 1 year, buying from RM 1.1x until 0.8x and is still buying and keeping, because I will definitely believe that Johotin will be the future Dutchlady in the making. Solid business, steady revenue and steady dividends.

My advice to you is to grab it before fund manager and unit trust start to add Johotin into their fund portfolio.

What can you know about Condensed Milk and Johotin's future earning?

Today, I will continue to talk on Johotin future potential when sugar price is dropped. Many know Johotin as a company that manufacture tin can for various uses such as paints and F&B tin packaging.

But in fact, the real revenue driver of Johotin is actually derived from it's F&B business. According to the previous quarter result, the food & beverage division is making up approximately 75% of the total revenue.

In the future, F&B business will be the main pillar for Johotin as new factory start operating in the Q4 of 2018.

So coming back to my previous topic that Johotin will stand to benefit from a lower sugar price in Malaysia. As I am not going to drill into the very detail calculation, let me show you some rough idea how much sugar is needed for a can of sweetened condensed milk.

This is a can of sweetened condensed milk by Nestle which is produced in Australia. We will drill down to the nutritional facts of this can of condensed milk. The information is published here in Nestle Australia as well.

As you can see, every 100g of condensed milk, there is 55.9g of Sugar in it. That is like 56% of it being made of sugar. Stunning isn't it?

Now if you work down on the cost for producing this condensed milk, you can see that the input raw material cost will be reduced significantly because more than half is actually sugar, and the price of sugar will be reduced drastically to match the global sugar price.

The sugar price will be brought down in order to reduce the consumer burden of high cost of living.

Finance ministry Lim Guan Eng informed that the new price of sugar will be made following a study on the matter - Source from The Star https://www.thestar.com.my/news/nation/2018/08/20/guan-eng-announcement-on-new-sugar-price-to-be-made-following-study/

Lim said cited structural factors and monopolies practiced by certain industries as reasons why prices of certain goods are fixed.

"For example, why is the sundry price of sugar RM2.90 per kilo which is almost double that of global market price of RM1.40 per kilo.

"This is due to structural factors and the power of monopolies which do not benefit the people," he said.

News are floating on government will put a 10 cents ceiling from the market price, which means it is talking of a potential RM 1.50 per kilo in the future for the price of sugar.

From RM 2.90 to RM 1.50 per kilo, that is almost 50% reduction. If you are a right minded business man, you will know this new ruling will definitely give the business a better profit margin in the coming future.

So what do you think about Johotin?

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Disclaimer:This is not a recommendation to buy or sell any equity. The information contained should be treated for general information only. Any decision to deal with any securities, please consult your own investment adviser.

Sugar price to be reduced, Johotin profit to be increase?

Hello all,

Welcome to my blog that talks about share investment idea in KLSE. Investment had been my passion, and sharing out my thoughts to be discuss among fellow investor will be a great venue for both me and you to continue improve on our investment method and also enlighten on new investment ideas.

Today I will talk about the what stock to be look out upon as sugar price is poised to be reduced in the future by the new Pakatan Harapan government.

One of my medium to long term pick stock selection to be seen benefiting for the lowering price of sugar will be Johotin - 7167. This company managed to catch my attention due to several coming up issue that will probably improve the company bottom line profit.

Johotin had a few business. Initially started out with tin can packaging, now Johotin already diversified into manufacturing F&B products such as sweetened condensed milk and evaporated milk. The business had been thriving and expanding, and is expanding overseas through JV with Able Diary.

Source is taken from The Star - https://www.thestar.com.my/business/business-news/2017/04/12/johore-tin-unit-to-make-us2mil-investment-in-mexico/


But what could be the latest catalyst for Johotin to see improvement in their earning could be a future reduction of raw material cost as Putrajaya mulls on putting down monopoly in the sugar trade, and signal for a lower price on the commodity.


According to an article taken from The Edge Malaysia, Deputy Domestic Trade and Consumer Affairs Minister Chong Chieng Jen had informed that Malaysia’s sugar prices may be reduced within the next six months as the government plans to negotiate with sugar refineries to reduce prices of the commodity.

Full article as per below:

The question now is - By how much will the decrease of sugar price affect Johotin bottom line net profit?

Stay tune and subscribe with us as we continue to update you on Johotin.

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Disclaimer:
This is not a recommendation to buy or sell any equity. The information contained should be treated for general information only. Any decision to deal with any securities, please consult your own investment adviser.