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Friday, July 24, 2015

YOCB - SLEEPING BEAUTY AWAKE?

YOCB (5159) Yoong Onn is a leading integrated designer, manufacturer, distributor and retailer of home linen and bedding accessories in the region.

Founded in 1966, Yoong Onn has evolved from a home linen trading business to a full-fledged home linen and bedding accessories provider with a approximately more than 1000-strong staff force currently.

Yoong Onn’s products have enjoyed astounding success overseas, and are currently exported to the following countries: Singapore,Taiwan,Australia,Brunei,Fiji,Indonesia,Japan,Mozambique,New Caledonia,Turkey,Vietnam.

WHY I say YOCB is sleeping beauty? Because the business itself are very much related to sleeping. Yet Its so beautiful ! The price is cheap, the company is great, what more to say? Its not yet meletup !
Lets us look at the stock movement. To see how pretty is this sleeping beauty. From head to tail. 

Ever since IPO price 0.88, listing on 23/12/2009, YOCB reach highest prices on 27/6/2014 which is 1.39 and closed at 1.30. The price have come down during August which I expect due to surprising lower profit on that quarter. Price lowest at around 0.80. Recently its start to climb back to 1.0 which attract my attention very much. Is it the sleeping beauty awake !?

Lets us look at the body of YOCB sleeping beauty,

Wow, its never get sick and always stay healthy ! YOCB must be exercise a very good business management ! More to say, this year result is astonish ! Beside consistently making profit, its give dividend very often. Dividend Yield return at least around 4% which is considered very high yield now. 
Is that all? Lets us see inside the stomach of this sleeping beauty whether she very hungry?
Wow ! Cash is more than bank borrowings ! Its a nett cash company with zero risk ! Trade receivable have 59 million and trade payable only 16 million, YOCB still have many cash to collect ! This sleeping beauty is very full and not hungry at all. We don't have to feed her already :)
Any more surprise from YOCB the sleeping beauty? 
Hey hey, the retained profit is higher than share capital ! This sleeping beauty is ready to born baby bonus already ! If you love her, you will surely fall in love with her ! Check back history, she already gave birth before ! 
BONUS ISSUE OF 1 BONUS SHARE FOR EVERY 3 EXISTING SHARES on14 Oct 2011 
Since YOCB have giving bonus record, its pretty high chance to see YOCB give again !


Anymore surprise? 













Oh that's about export once again, we can see that last year foreign exchange rates show in 2014 Annual report for USD is around $3.21. But now? its about $3.80 ! SGD 2.8 ! How much different would it be?
USD around 18% increase and SGD around 8%.

Its will definitely benefit YOCB when RM is depreciating, exactly same like others furniture company !
So is buying now consider cheap? 

As of today price around RM 1.08, 4 rolling quarter PE at 9.0
Comparing with other furniture stock, mostly are over PE 10 to 15 at least. 
Lets us do some very simple projection once again, exactly same like previous post on JHM, 
Financial Year 2015
First quarter           3.3 Mil = 0.0207 EPS
Second quarter      6.5 Mil = 0.0412 EPS
Third quarter         6.7 Mil = 0.0423 EPS
Coming quarter     2.0 Mil = 0.0125 EPS  (I put very low to show if result bad still worth how much)
Total EPS year 2015 = 0.01167 EPS
0.1167 EPS x PE 10 = RM 1.16
0.1167 EPS x PE 12 = RM 1.40
0.1167 EPS x PE 15 = RM 1.75

What if coming August result is 6 Mil or more? If its 6 mil or more, YOCB at least worth  RM1.75 - RM 3.0.

As a conclusion,
1. YOCB is sleeping beauty that just awake.
2. Company are doing export business which got earn from USD appreciate as well.
3. Current trend of goreng stock are onto USD related, exported related.
4. Price still cheap..
5. Quarter result never make losses.
6. Nett cash company.
7. Potential to give bonus.
8. Its much better than many other furniture stock at higher valuation.
9. Its result potential to be good, that's why price got action now!

My first Target price RM 1.30, second target price RM 2.0, long term RM 3.0 if result maintain good. 

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