--公司于4,5,6月的Q2, 2015 业绩很好，赚了 1181万，Eps=10.16sen ,nta=rm2.16
若下来Q3,Q4有720万(EPS=6SEN),则全年可赚2910万(EPS=24.64 SEN)
现RM1.94只是PE=7.8 倍在交易,明显被低估了,合理的PE=10,价位=RM2.46
--于30-6-2015 SUCCESS 的债务1.2亿,公司有CASH 3492万.
---展望未来，陈玡宾说，前风变压器可能重估其资产与产业，并且派送红股或凭单
1)前景带动股价 前风竞标3国LED工程
2014-10-19 10:57
受到LED领域前景一片光明带动，加上交出更好的业绩表现，其股价上个月开始走高。
“许多国家现已转为使用更环保和更节省能源的光二极管照明系统，
Conclusions
It is always not easy to predict if a company would do well in the
future and that its share price would rise. It is much easier to see
if a company is likely not to do well. Normally the writing is all over
the walls in its financial statements, if you know how to spot red
flags. Although investing is about the future, not the past, the
economics of the business are usually clearly reflected from its
past performance and the actions of the same management.
It seldom changes unless the business model changes, and/or
the management changes.
Investing just basing on the simplistic growth and PE ratio
works sometimes, and sometimes it doesn’t work. There are
more important things to look for, some of them mentioned
above, which have higher predictability on your return of investment.
This has been proven again and again in many academic research
and from the investing experience of many truly super investors
all around the world.
Do you wish to learn how and what to look for in investing in
the stock market in order to have a higher probability of success
in building long-term wealth? Do you wish to scout for some
good stocks to invest at cheap prices now using some plausible
and proven investing strategies? Please contact me for an online
course for a small fee at
ckc14training@gmail.com
In Bursa, there aint no tooth fairy. The only person whom you
can depend on is none other than yourselves. Nothing comes
easy and without having to spend time and effort, and nothing
good comes free. That is the golden rule in investing.
Happy investing.
K C Chong (5th September 2015)
Appendix
Table 1: Revenue and net income for Success Transformer
8)
若下来Q3,Q4有720万(EPS=6SEN),则全年可赚2910万(EPS=24.64 SEN)
现RM1.94只是PE=7.8 倍在交易,明显被低估了,合理的PE=10,价位=RM2.46
--于30-6-2015 SUCCESS 的债务1.2亿,公司有CASH 3492万.
---展望未来，陈玡宾说，前风变压器可能重估其资产与产业，并且派送红股或凭单
以作为回馈忠诚股东及提升流通量.
---在2008年9月，它获《福布斯亚洲》杂志评选为13家‘十亿令吉以下最佳公司’之一。
---机构基金已经从公开市场购入前风变压器股票，意味着看好这只被忽略与
低估股票的上扬潜质，因后者持续以净有形资产值以下水平交易。
---前风变压器是透过旗下逾800个交易商和分销商，出售其变压器与照明产品，
---前风变压器是透过旗下逾800个交易商和分销商，出售其变压器与照明产品，
涉及高速公路计划和供应商业建筑、购物广场、仓库和工厂的照明。
---许多国家现已转为使用更环保和更节省能源的光二极管照明系统，
---许多国家现已转为使用更环保和更节省能源的光二极管照明系统，
这项产品将成为我们的一个庞大市场。
---买股看公司的未来是否成长，净利多少等，当可见度变得清晰，投资风险相对变小，
股价也将呈现上升势头，success 会是不错的选择。
---公司诚信度是很好的，因此数据造假应该不会发生在这公司上。
---于30-05-2015 的30大股东已持有80.96%（97152张），
市场流通量只有22848张(19.04%),总股数为120000張.大股东己持 56.48%.
---success现提供的投资机会,真的是越買越高,趁现在低,早点进货,等待丰衣足食.
---success 绝对是投资者的首选股，公司的潜在价值好，成长佳,将会是一只黑马股。
http://www.success.com.my/
---买股看公司的未来是否成长，净利多少等，当可见度变得清晰，投资风险相对变小，
股价也将呈现上升势头，success 会是不错的选择。
---公司诚信度是很好的，因此数据造假应该不会发生在这公司上。
---于30-05-2015 的30大股东已持有80.96%（97152张），
市场流通量只有22848张(19.04%),总股数为120000張.大股东己持 56.48%.
---success现提供的投资机会,真的是越買越高,趁现在低,早点进货,等待丰衣足食.
---success 绝对是投资者的首选股，公司的潜在价值好，成长佳,将会是一只黑马股。
http://www.success.com.my/
1)前景带动股价 前风竞标3国LED工程
2014-10-19 10:57
- 陈玡傧。
（吉隆坡18日讯）近期股价大涨的前风
（SUCCESS，7207，主板工业产品股）
，证实在肯尼亚（Kenya）、新加坡、澳洲
及印尼竞标LED照明工程。
根据财经周刊《The Edge》报道，前风创办人
兼董事经理陈玡傧表示：“基于以往纪录良好，
公司有信心能够在肯尼亚获得价值600万至
750万令吉的政府合约。”
公司目前竞标着的合约，包括肯尼亚的LED
照明工程，新加坡、澳洲和印尼政府和私人
领域的LED工程。
针对市场潜能，他指出，很多国家都已转至
使用有利生态环境和节省能源的LED照明系统，
所以，这对公司而言，是一个相当庞大的市场。
由于该领域拥有很大的发展潜能，所以公司必
须通过并购活动扩展业务和加速成长。
“我们正与一些公司洽谈并购活动，但目前
还不确定。由于LED市场庞大，所以，
我们需要更多资金拓展业务。”
这家低调的大马公司，主要业务是生产
变压器和工业照明产品。
股价创新高
受到LED领域前景一片光明带动，加上交出更好的业绩表现，其股价上个月开始走高。
同时，更在9月25日冲上2.03令吉的历史新高。
消息人士指，机构基金已在公开市场收购公司股票，因看好股价成长潜能高。http://www.nanyang.com/node/656740?tid=462
2)
投标海外工程计划乐观 前风变压器成长迅速
二零一四年十月二十六日 晚上七时十分
股价最近无预料从一年低点1.15令吉，飙高至2.03令吉的前风变压器有限公司
二零一四年十月二十六日 晚上七时十分
股价最近无预料从一年低点1.15令吉，飙高至2.03令吉的前风变压器有限公司
（SUCCESS，7207，工业产品组），正投标肯尼亚、新加坡、澳洲和印尼的光二极管
（LED）照明计划。
该股于上周五收盘时挂1.86令吉。
这间从事制造变压器与工业照明产品且作风低调的公司，有信心在其良好记录背景下，
该股于上周五收盘时挂1.86令吉。
这间从事制造变压器与工业照明产品且作风低调的公司，有信心在其良好记录背景下，
赢得肯尼亚价值600万至720万令吉的政府合约。
董事经理兼创办人陈玡宾表示：“除了肯尼亚的光二极管照明计划外，我们也投标新加坡
董事经理兼创办人陈玡宾表示：“除了肯尼亚的光二极管照明计划外，我们也投标新加坡
、澳洲和印尼政府与私人领域的光二极管计划。”
“在肯尼亚，我对我们赢得这项工程相当乐观，因在过去5年，我们为从内罗华机场至
“在肯尼亚，我对我们赢得这项工程相当乐观，因在过去5年，我们为从内罗华机场至
市区的街道供应照明产品。”
这也是陈玡宾认为它不受来自飞利浦和其他业者激烈竞争影响的原因。
飞利浦于2012年与肯尼亚都市道路局合作，以确保首都内罗华的道路装置太阳能光
这也是陈玡宾认为它不受来自飞利浦和其他业者激烈竞争影响的原因。
飞利浦于2012年与肯尼亚都市道路局合作，以确保首都内罗华的道路装置太阳能光
二极管照明设备。这项计划是东非地区的首创。
陈玡宾说，前风变压器的客制化照明方案涵盖设计阶段至制造与售后服务，
陈玡宾说，前风变压器的客制化照明方案涵盖设计阶段至制造与售后服务，
让它可与本土和海外业者竞争。其于双溪毛糯工厂的产品出口到超过40个国家，
包括法国、澳洲、阿联酋、日本、韩国、印度、香港和新加坡。
“许多国家现已转为使用更环保和更节省能源的光二极管照明系统，
这项产品将成为我们的一个庞大市场。”
前风变压器是透过旗下逾800个交易商和分销商，出售其变压器与照明产品，
前风变压器是透过旗下逾800个交易商和分销商，出售其变压器与照明产品，
涉及高速公路计划和供应商业建筑、购物广场、仓库和工厂的照明。
基于该领域的迅速成长机会，该公司可能需要透过合并与收购扩充，以巩固其未来成长。
于1980年成立该公司的陈玡宾指出：“我们已针对并购与一些团体进行洽商，
基于该领域的迅速成长机会，该公司可能需要透过合并与收购扩充，以巩固其未来成长。
于1980年成立该公司的陈玡宾指出：“我们已针对并购与一些团体进行洽商，
但目前仍然尚未有定案。由于光二极管市场非常庞大，我们未来将需要更多资金
以扩充我们的业务。”
拜光二极管和明朗前景和前风变压器更强稳的财务表现所赐，该股上个月从之前
拜光二极管和明朗前景和前风变压器更强稳的财务表现所赐，该股上个月从之前
被冷待逐渐转为受到关注，于9月25日冲上令吉的记录高点，惟走势较后回软。
陈玡宾强调，前风变压器董事与该股的不寻常活动无关。
消息称，机构基金已经从公开市场购入前风变压器股票，意味着看好这只被忽略与
陈玡宾强调，前风变压器董事与该股的不寻常活动无关。
消息称，机构基金已经从公开市场购入前风变压器股票，意味着看好这只被忽略与
低估股票的上扬潜质，因后者持续以净有形资产值以下水平交易。
截至6月30日，其净有形资产值企于2.25令吉。基于该股最后挂价1.86令吉，
截至6月30日，其净有形资产值企于2.25令吉。基于该股最后挂价1.86令吉，
和2014财政年常年化每股收益28仙，前风变压器只有约6倍本益比。
该公司于同时期的净盈利从之前的1360万令吉提高到1670万令吉，
而收益则增加27.8%至1亿8964万令吉。
陈玡宾预测，该公司2014和2015财政年度的收益与盈利将进一步提高，
陈玡宾预测，该公司2014和2015财政年度的收益与盈利将进一步提高，
主要是来自旗下光二极管照明部门。
展望未来，陈玡宾说，前风变压器可能重估其资产与产业，并且派送红股或凭单
展望未来，陈玡宾说，前风变压器可能重估其资产与产业，并且派送红股或凭单
以作为回馈忠诚股东及提升流通量，惟现阶段尚未对这些企业活动作出决定。
前风变压器是于2005年在大马交易所的第二交易板挂牌，并于2007年转升主要交易板上市。
在2008年9月，它获《福布斯亚洲》杂志评选为13家‘十亿令吉以下最佳公司’之一。
前风变压器是于2005年在大马交易所的第二交易板挂牌，并于2007年转升主要交易板上市。
在2008年9月，它获《福布斯亚洲》杂志评选为13家‘十亿令吉以下最佳公司’之一。
3)
Success Transformer- to buy or to
sell - Koon Yew Yin
Koon Yew Yin
The group is principally involed in the manufacturing and trading of electrical appratus
Author: Koon Yew Yin | Publish date: Fri, 20 Jun 09:40 http://klse.i3investor.com/blogs/koonyewyinblog/54580.jsp
Koon Yew Yin
The group is principally involed in the manufacturing and trading of electrical appratus
and industrial lighting products. About 40% of its product is exported to China.
Many of my friends who have bought this share asked me whether they should buy
Many of my friends who have bought this share asked me whether they should buy
some more because currently there are a lot more investors taking notice of it or
they should take profit since it has strike its all time high.
That is a very difficult question to answer.
I am very good at finding really undervalued stocks but I am always afraid to tell
That is a very difficult question to answer.
I am very good at finding really undervalued stocks but I am always afraid to tell
people when to sell to take profit.
All I can say is that it has been making increasing profit ever since it was listed in
All I can say is that it has been making increasing profit ever since it was listed in
2005 and its revenue has also been increasing every year. It obviously has
the competitive market advantage. The 1st Q of the current year shows that both
of its revenue and profit have increased. This shows that it is likely to continue to
make increasing profit.
My answer: I will not sell because I believe it will continue to make more
My answer: I will not sell because I believe it will continue to make more
and more profit every year.
4)
| 前風數據剖析2014-05-04 19:19
前風業績料持平
（2）業務前景：董事部宣佈最新業績時指出，旗下變壓器及工業照亮燈業務領域，
預料在國內外市場的競爭激烈。不過，公司將善用以往的強勁營運記錄，
廣泛的客戶網絡群及多種類的產品等，擴展及滲透現有及新的市場。該公司也將
努力加強營運競爭力及生產力。
該公司預料棕油及其他工業領域市場將持續具挑戰性，惟大馬油氣領域展望將繼續亮眼。
若無出現任何不可預見事故，放眼未來業績表現保持現年水平。
（3）不動產價值：1億6千零3萬5千令吉。
（4）大股東：陳聰玲（譯音）直接及間接持有47.82%股權（2012年報資料）
（5）難以預測及沒有類似消息，相信要視大股東而定。
（星洲日報／投資致富‧投資問診‧文：李文龍）
5)
7) Is Success Transformer a successstory? kcchongnzAuthor: kcchongnz | Publish date: Sat, 5 Sep 2015, 07:13 PM
“Earnings, dividends and growth rates are useful figures in
investment analysis. However, like water to humans, there is an underlying element essential to the survival and success of any firm—cash flow.” Somewhere at the end of February 2013, Success Transformer Corp Berhad (Success) announced its end of year 2012 results. Revenue and net income both jumped by 16% to RM296m and RM30.6m respectively. Earnings per share was 22.5 sen, while its share price was trading at around RM1.00 apiece as shown in Figure 1 below. At that price, it was se lling at less than five times earnings.  Its share price went up with this good profit growth by 40% to RM1.40 within a year, and continues to rise after that to RM2.00 another six months later, with another profit growth to EPS of 24 sen for the financial year ended December 2013. Success is quite an illiquid stock and with some recommendations in the cyber space because of this seemingly great results, the retail investors “suddenly” realize its value and many of the transactions were done around the RM1.75-RM2.00 level. After that Success’s revenue continues to rise, with its revenue growing another 15% to RM371.4m, but net income dropped by 20% for the financial year ending 31st December 2014. Its share price retreated as a result and closed at RM1.35 last Friday on 4th September 2015. If an investor has invested in Success 5 years ago at the adjusted price of about RM1.00, the total return after 5 years is still okay at about 30% now, or a compounded growth rate of 5.8%, comparable to the return of the broad market during the same period. It is still far ahead of the return of many lemons as shown in the link below: http://klse.i3investor.com/blogs/kcchongnz/67199.jsp However, if you were to compare with the return of many good second liners companies during the same period, the return of Success falls far behind. For those who were chasing its high growth story a year ago and bought close to RM2.00 would have suffered considerable loss of about 30%. Business background Success is engaged in investment holding and provision of management services. The Company, through its subsidiaries, operates in two segments: transformer, lighting and related products, which is engaged in manufacturing and marketing of electrical apparatus, industrial lighting and metal products focusing on metal casing and stamping parts, and process equipment, which is engaged in the fabrication of process equipment and metal structures and the provision of maintenance, repair and shutdown works. Past Performance Success appears to be a successful story since its listing about 10 years ago at RM1.00. It is a high growth company no doubt with its revenue growing from RM74.3m 9 years ago to RM371.4m in 2014, or a compounded annual growth rate ( CAGR) of 20% as shown in Table 1 in the Appendix. Net Income, however, grows at a CAGR of 11% from RM10.4m to RM25.8m, or 20.6 sen a share, way below its revenue. At this price of RM1.35 apiece, it is still trading at a relatively low 6.6 times its earnings. Why isn’t Success trading at a double digit PE ratio with such a high growth story? One of the answers was given by the legendary Warren Buffett. “Customarily, most investors measure annual company performance by looking at earnings per share (EPS). Did they increase over last year? Are they high enough to brag about? For his part, Buffett considers EPS a smokescreen. Most companies retain a portion of their previous year's earnings as a way of increasing their equity base, so he sees no reason to get excited about record EPS. There is nothing spectacular about a company that increases EPS by 10%, if at the same time, it is growing its equity base by 10%. That's no different, he explains, from putting money in a savings account and letting the interest accumulate and compound. Worse still, there are many companies borrow huge amount of money to improve EPS, but the marginal return is way below its borrowing costs. The test of economic performance, he believes, is whether a company achieves a high earnings rate on equity capital ("without undue leverage, accounting gimmickry, etc."), not whether it has consistent gains in EPS. To measure a company's annual , Buffett prefers return on equity or ROE. -- The ratio of operating earnings to shareholders' equity.” Return on Capitals Figure 2 below, however shows a clear trend of deteriorating return on capitals.  As early as beginning of 2014 before the share price of Success up from about RM1.50 to RM2.00, diligent investors could already see the ROE of Success has been deteriorating unabated from 18.8% in 2009 to 13.1% as at end of December 2013, barely meeting its cost of equity, and avoided investing in Success, even though its PE ratio is about only 6 at a price of about RM1.40 then. Despite of that, the share price continued to shoot up following the high growth story. Actually the deteriorating ROE is just part of the story, and the low PE ratio is just a smokescreen. In my opinion, it deserves that low PE valuation due to its cash flow from operations. Cash is King Look at Enron’s four years financial performance and cash flow from 1997 to 2000 as shown in Table 4 below with its net income galloped by 832% from $105m to $979m before it went belly up. This was one of the most talked about corporate scandals in the US in 2000s, an excellent MBA case study. Focussed on net income, profit growth and PE ratio, Enron became a darling stock and Wall Street sent Enron’s stock price soaring from about $30 to $100 from 1997 to 2000. However, from 1997 to 1999, the company burned all its revenues and required an additional $3b of capital expenses just to open its doors. Table 4: Enron cash flow, $m
generate cash. I have written a similar article before using another company as an example. http://klse.i3investor.com/blogs/kcchongnz/78262.jsp Basically, a business needs to pay all the expenses such as administration, marketing, workers, plant and equipment , materials etc. to produce goods and services . After deducting cash to pay for all these stuff, and sold or executed the services and receive cash, you get some cash left over from the operations, termed cash flows from operations (CFFO). The net income/profit (NI) or earnings figure, the income statement’s “bottom line,” is based on the principles of accrual accounting. Accrual accounting attempts to match expenses with revenues regardless of when the cash transactions that deal with the creation of the goods being sold and the receipt from the sale occurred. In essence, accrual accounting is not entirely concerned with when “cash trades hands.” However, over a long period of time, the profit figure should match closely the net profit figure, i.e. the ratio of CFFO/NI should average close to 100%, generally with increase in net working capital along the years, and neutralized by the adding back of the non-cash depreciation charges. Table 2 below shows it is not the case for Success. Table 2: Cash flow of Success  The CFFO has been always way below NI. The average of CFFO is only 43% of NI for the last 5 years, very poor CFFO indeed. What has been the problem? Let us examine Table 3 below. Table 3: Growth in revenue and inventories of Success  The culprit as you can see is the inventories build up, mush faster than revenue growth. Compare last year and 5 years ago, revenue grows by 87% while inventories grows at a much faster pace of 309% as shown in Table 3 above. A lot of cash has been tied up in inventories, which explains its persistent shortage of cash all these years. Another big headache is Success’s business requires relatively huge amount of capital expenses (capex) to embark on its high growth as shown in Table 2 above. What is left from CFFO after capital expenses is the free cash flow (FCF) in the year. As you can see from the Table above, Success has not been successful at all in this respect. It has negative FCF practically every year for the last 5 years. Without positive FCF, there is no money left from the business for distributing dividends to shareholders, to invest in other profitable ventures, pay down debts, or buy back shares when they are selling cheap. Without FCF, a company has to resort to issuing more shares and hence dilute its EPS, or borrow more from the banks and making the company more risky in times of economic downturn. That is precisely what Success has been doing for the later; keeps on borrowing. Most smart and proven successful businessman and super investors looks at more tangible metric when investing, a good cash yield, rather than the obscure earnings yield, the inverse of PE ratio. http://klse.i3investor.com/blogs/kcchongnz/76875.jsp Cash yield CY = Free cash flow (FCF) / Price. Success’s CY is negative as a result of negative free cash flow (FCF) practically every year for the last 5 years. Hence it was never a good candidate for investment since listing. How do you like when you invest in a business, it reports profit but losing hard cash every year? Second quarter 2015 interim report Success has just announced its second quarter results ending 30th June 2015. Its net income increased again by 20% to RM12.6m, or 10.2 sen per share, from the corresponding quarter last year. The company has been announcing many share buybacks recently. Were all these good news? Not until you see its CFFO deteriorated further to a negative value of RM16.3m for the two quarters, and with a further RM5.2m in capex, FCF is at a negative of RM21.5m. Not until you see the major shareholders keep on dumping their shares? |
Conclusions
It is always not easy to predict if a company would do well in the
future and that its share price would rise. It is much easier to see
if a company is likely not to do well. Normally the writing is all over
the walls in its financial statements, if you know how to spot red
flags. Although investing is about the future, not the past, the
economics of the business are usually clearly reflected from its
past performance and the actions of the same management.
It seldom changes unless the business model changes, and/or
the management changes.
Investing just basing on the simplistic growth and PE ratio
works sometimes, and sometimes it doesn’t work. There are
more important things to look for, some of them mentioned
above, which have higher predictability on your return of investment.
This has been proven again and again in many academic research
and from the investing experience of many truly super investors
all around the world.
Do you wish to learn how and what to look for in investing in
the stock market in order to have a higher probability of success
in building long-term wealth? Do you wish to scout for some
good stocks to invest at cheap prices now using some plausible
and proven investing strategies? Please contact me for an online
course for a small fee at
ckc14training@gmail.com
In Bursa, there aint no tooth fairy. The only person whom you
can depend on is none other than yourselves. Nothing comes
easy and without having to spend time and effort, and nothing
good comes free. That is the golden rule in investing.
Happy investing.
K C Chong (5th September 2015)
Appendix
Table 1: Revenue and net income for Success Transformer
8)
Success Transformer - Profits shine through
Author: equitydiary | Publish date: Fri, 28 Aug 2015, 07:43 AM
Link to official blog: www.equitydiary.blogspot.com
By the looks of things, profits of Success Transformer Corp (STC)
With promising 2Q15 results, this low P/E stock of decent quality
Based on yesterday’s closing price of RM1.38 and an annualized
To recap, STC’s 65% owned subsidiary, Seremban Engineering
Based on SEB’s 2Q15 report, it appears like the cost overruns
Figure 1: SEB quarterly P&L
Figure 2: STC quarterly P&L
Figure 3: STC quaterly segmental profit
The latest 2Q15 results show SEB’s profit levels to be back in the
The transformer and lighting segment showed decent margin
For the process equipment segment, sales dipped 32% yoy,
I have read some articles on STC’s business outlook especially on
Figure 4: STC’s segmental results, 2010-2014
Figure 5: STC’s transformer, lighting and related products
Figure 6: STC’s process equipment segment revenue, 2010-2014
Once they've taken expansion to a good enough level, they
A good company from a long-term investor's point of view.
9)
SUCCESS TRANSFORMER CORP BHD
Profits shine through
By the looks of things, profits of Success Transformer Corp (STC)
being clouded by its subsidiary has come to an end.
With promising 2Q15 results, this low P/E stock of decent quality
looks like it’s on its way for a rerating.
Based on yesterday’s closing price of RM1.38 and an annualized
2Q15 EPS of 40.64 sen, the stock is trading at a prospective P/E
of just 3.4x. If we apply a P/E of 6x to that annualized EPS,
it would give the stock a value of RM2.44, or an upside of 77%
to its last traded price.
To recap, STC’s 65% owned subsidiary, Seremban Engineering
Bhd (SEB) posted heavy losses in 4Q14 and 1Q15 due to cost
overruns of the Sabah Ammonia Urea project (which is more t
han 90% complete now). This clouded STC’s transformer and
lighting profits as they were consolidated with SEB’s (see Figures
1, 2 and 3, highlighted in red).
Based on SEB’s 2Q15 report, it appears like the cost overruns
had mostly been provided for in 1Q15 and will no longer be seen
in SEB’s future financials.
Figure 1: SEB quarterly P&L
Source: Company quarterly reports
Figure 2: STC quarterly P&L
Source: Company quarterly reports
Figure 3: STC quaterly segmental profit
Source: Company quarterly reports.
Note: Segmental profits here are approximations as the company does not provide
profit breakdown by segment in quarterly reports.
a Derived by subtracting b from c
b Operating profit/loss taken from SEB’s income statement.
c Operating profit/loss taken from STC’s income statement.
The latest 2Q15 results show SEB’s profit levels to be back in the
normal range (albeit at the lower range due to a drop in sales),
and as a result, STC’s transformer and lighting segment's profits
are now shining through again.
The transformer and lighting segment showed decent margin
expansion vs. in most recent quarters; revenue grew about 3%
yoy while operating profit climbed 13%.
For the process equipment segment, sales dipped 32% yoy,
but this didn’t affect STC’s overall profits much. Even if we
stripped out or assume zero profits for this segment, STC’s net
profit would have still been around RM10.5m or 9 sen EPS in 2Q15.
I have read some articles on STC’s business outlook especially on
its LED lighting and I’m quite convinced. Could 2Q15 be a
precursor to STC’s continuation in growth?
Figure 4: STC’s segmental results, 2010-2014
Source: Company annual reports.
Figure 5: STC’s transformer, lighting and related products
segment revenue, 2010-2014
Figure 6: STC’s process equipment segment revenue, 2010-2014
I'm not too concerned about Success' capex levels as the
company is in expansion/growth mode. I believe Success is
taking the opportunity to expand fast while they can. If they're
spending to expand an unprofitable business then that would
obviously be bad, but this isn't the case for Success.
Once they've taken expansion to a good enough level, they
would cut down on capex, and now with the higher profits
from the expansion, the effect would be: strong cash flows,
which would lead to debts going down and cash going up.
A good company from a long-term investor's point of view.
9)
Wednesday, 19 November 2014
SUCCESS - Lighting the Way Up
While global market had been in an upbeat mode, Malaysia had been trailing behind most of the party after foreign investor view Malaysia outlook as "a lack of catalyst" as foreign funds pared down holdings. However, with the month of November that is full of quarterly reports, would there be something that will be interesting to look out at?
It had came to me on Success Transformer Corp Berhad (SUCCESS - 7207), which is dealing with lighting and transformer will be a good company to be vested in with their bright business prospectus.
Let's have a look at their latest chart
SUCCESS had been in a gradual uptrend. SUCCESS had been consolidating at the range of RM 1.85 to RM 2.00 in a lower volume manner. However, with the tight consolidation focused at the range of RM 1.95, SUCCESS could be pending upon a break above RM 2.00 in the coming days with a strong anticipation on a stronger quarterly performance.
SUCCESS - Lighting the LED way
The latest trend had been going the LED way for cost saving and environmental friendly. Success Transformer Corp Berhad, being the largest LED Lightning manufacturer in Malaysia would be looking to see this trend as a booming prospect for it's business.
LED had been in a strong trend as of lately, and it's widely supported in the European countries as it consumes lesser energy while providing a brighter light, which in turn, reducing green house gases that had been a cause of global warming.
SUCCESS had been seeing steady growth in it's revenue since 2009.
According to the latest Q2 FYE 2014 performance, Success had been seeing a cumulative revenue of RM 189.6 million.
A quick simple calculation will see SUCCESS maintaining their 2014 performance will be seeing a possible revenue around RM 380 million, as EPS can hit a potential 28 to 29 cents. A quick valuation based on PER x10 will easily see SUCCESS being valued at the range of RM 2.80.
Currently, SUCCESS had been aggressively expanding it's network and production to Thailand and Singapore. SUCCESS is currently catering to more than 60 countries and will be looking to see more demand coming in to their door.
Based on the current outlook, SUCCESS will be looking to see a 15% to 20% growth in their revenue for the next 3 years, which could potentially hit up to RM 500 million revenue in FYE 2016.
In my opinion, SUCCESS will be a good fundamental company to be vested in for the long run, with good business prospectus, good management team, and good financial control within the company. A long term outlook will place SUCCESS at RM 3.00.
Bone's short term TP : RM 2.20
Cheers and have a nice day
Regards,
Bone
It had came to me on Success Transformer Corp Berhad (SUCCESS - 7207), which is dealing with lighting and transformer will be a good company to be vested in with their bright business prospectus.
Let's have a look at their latest chart
SUCCESS had been in a gradual uptrend. SUCCESS had been consolidating at the range of RM 1.85 to RM 2.00 in a lower volume manner. However, with the tight consolidation focused at the range of RM 1.95, SUCCESS could be pending upon a break above RM 2.00 in the coming days with a strong anticipation on a stronger quarterly performance.
SUCCESS - Lighting the LED way
The latest trend had been going the LED way for cost saving and environmental friendly. Success Transformer Corp Berhad, being the largest LED Lightning manufacturer in Malaysia would be looking to see this trend as a booming prospect for it's business.
SUCCESS had been seeing steady growth in it's revenue since 2009.
According to the latest Q2 FYE 2014 performance, Success had been seeing a cumulative revenue of RM 189.6 million.
A quick simple calculation will see SUCCESS maintaining their 2014 performance will be seeing a possible revenue around RM 380 million, as EPS can hit a potential 28 to 29 cents. A quick valuation based on PER x10 will easily see SUCCESS being valued at the range of RM 2.80.
Currently, SUCCESS had been aggressively expanding it's network and production to Thailand and Singapore. SUCCESS is currently catering to more than 60 countries and will be looking to see more demand coming in to their door.
Based on the current outlook, SUCCESS will be looking to see a 15% to 20% growth in their revenue for the next 3 years, which could potentially hit up to RM 500 million revenue in FYE 2016.
In my opinion, SUCCESS will be a good fundamental company to be vested in for the long run, with good business prospectus, good management team, and good financial control within the company. A long term outlook will place SUCCESS at RM 3.00.
Bone's short term TP : RM 2.20
Cheers and have a nice day
Regards,
Bone
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