Today, we feature a note on Harrisons Holdings Malaysia Berhad in our FundTech Radar – 22nd May 2018. The company is a leading distributor of the fast moving consumer goods (FMCG) in Malaysia. It is involved in marketing, sales, warehousing and distribution of consumer, building materials and engineering products, fine wines, agricultural and industrial chemicals, operation of shipping/logistics and travel agencies
· Revenue and core PATAMI have been steadily growing over the past three years (FYE15-17).
· Its business operates on a fairly thin core PATAMI margin of about 1.2% on average.
· Net gearing ratio rose marginally to 0.31x as at 31 Dec 17 (vs. 0.28x in FY16).
· Constant dividend payment since FY02, with FY17 4.9% div. yield and 65.1% payout ratio.
· The major shareholders of the company are mainly foreign investors.
· The recent acquisitions will further expand its distribution and wholesaling business.
· FMCG agencies are expected to grow modestly.
· Rising wages will continue to exert pressures on operation costs.
· 27th June 2018 is the ex-date of the final single tier dividend of 20sen per share.
· Currently trading at 13x 12-month trailing P/E, a 8.8% discount compared to its peers.
Triangle formation breakout.
Low trading volume.
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.
22nd May 2018
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