Investing in D&O for the brighter future

Today I want to recommend 1 good stock to all my fansi. For those already bought Johotin since 85 to 90 cents region, congratulation. Please continue to hold on to Johotin because the potential of this share will only continue to show over the years. As for me, I am still holding on to my dear Johotin and will probably hold on to it for another couple of years because Johotin will truly  blossom with the right management, right product, right market and right investment.

However, I do not discount there are people who had already cashed out on Johotin since it has appreciated more than 20% from the base. Since you guys are likes to invest at the base, or near the base level, probably I would like to show you this potential share as well.

Now, this share that I am going to recommend is called D&O Green Technologies Berhad. Short form is D&O.

What is so special in this share that I want to recommend is because the technical chart is showing a good entry point for strategic investor based on technical outlook.

As you can see, based on the 2 years chart outlook, the share price of D&O rebounded strongly on the long term support line. Overall, the share is still showing good momentum with strong institutional buying in that is keeping the share for long term.

So why 2019 is a good year for D&O ?

Firstly, new factory in Batu Berendam, Melaka is slated for operation end of 2018, and will be catering for new capacity which can cater for 4 to 5 years of growth. Currently, the growth rate in automotive LED is 15% per annum. With the new factory, D&O can look for growth rate of 20% to 30%, boosting the bottom line figure.

Secondly, D&O is able to command a good gross margin of 25% for it's LED product. The product that D&O manufacture are no OEM, but OBM (Original Brand Manufacturer), where D&O owns the patent, design and brand. This will open door of opportunities for D&O to lease their intellectual property to other manufacturer for OEM manufacturing of their goods.

Thirdly, D&O is major supplier for Volvo, which is owned by Chinese company Zhejiang Geely. Currently, China is the fastest country in implementing energy efficient, environment friendly products. Hence, partnering with China Zhejiang Geely is a strategic move that will enable the product offering into the market faster, with China as the primary market.

So as a conclusion note and summary

1. D&O had a bright prospect with automotive LED lighting, where current global usage is only 3%. Projected to see automotive LED usage to reach 15% on 2021

2. D&O new factory ready to cater for new demand, project company growth rate at 20 to 30%

3. Technical chart suggesting a good buy in price at long term support line

Source and additional reading on D&O

1.) https://themalaysianreserve.com/2018/02/22/green-technologies-enter-local-market-via-geely/

2.) http://www.theedgemarkets.com/article/do-attractive-target-amid-industry-consolidation

Please do your own due diligence in any investment decision.