NOTE: Wishing all Happy Holidays and a Happy Chinese New Year! Gong Xi Fa Cai!
Good morning.
Today, we feature a note on D&O Green Technologies Berhad in our FundTech Radar – 27th Feb 2018. The company is one of the forerunners for LED manufacturing with world class automotive standards (AEC-Q101) qualifications. About 50%-60% of production costs were denominated in the US Dollar while about 89% of revenue was denominated in the USD and Chinese Yuan.
Fundamental Stance
· strong 3-year(FYE15-17) sales and core PATAMI CAGR of 3.2% and 141.7% respectively
· FY17E core PATAMI margin continued to rise
· overall cash position improved to a net cash of RM4.9m (0.5 sen per share) as at 31 Dec 2017
· dividend payment of 0.5 sen in FY17, with dividend payout of 20.5%
· Upon completion of the renovation work on the recent acquired land cum factory building, the support offices will move to the new building, thus freeing up space in the existing plant for future production capacity expansion
· expected to benefit from increasing LED adoption in the car exterior lighting and new interior lighting applications
· currently trading at 24.2x 12-month trailing P/E, 47.9% discount to its 3-year historical average P/E of 46.5x. As compared to its closest peer (JHM), D&O is trading cheaper at 10% discount
Technical Front
Prices are still consolidating sideways
Resistances: 0.725/0.80/1.00
Supports: 0.575/0.53/0.43
The above information is extracted from CIMB Research Report. For the full research reports, outlook and disclaimers, please logon to your account on www.itradecimb.com.my and click on <Research> Tab under Malaysia.
This FundTech Radar report is intended for educational purposes only. It represents a preliminary assessment of the subject company, and does not represent initiation into CIMB's coverage universe. It does not carry investment ratings and CIMB does not commit to regular updates on an ongoing basis.
27th Feb 2018
Disclaimers: This distribution is by CIMB Investment Bank Berhad (“CIMB”) in Malaysia only. The views are our own as of this date and subject to change. No further distribution is allowed without our prior written consent. CIMB, its related corporations, affiliates and business partners make no recommendation, offer or invitation to transact in any securities, futures contracts or other instruments. Please make your independent evaluation, consider your own investment objectives and financial situation and consult your own professional advisers before participating in any transaction.
