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Monday, November 30, 2015

(Icon8888) WTK (Part 2) - Excellent Results

1. Introduction 

I first wrote about WTK in February 2015.

Since my article was published, the group has disappointed investors by failing to deliver good results despite benefiting from weak Ringgit.

As a result, its share price has been stagnant. The stock closed at RM1.23 last Friday, more or less the same level when I first wrote about it in February.


However, it is better late than never. The company finally delivered a sterling set of results on Friday. Monday will be a happy day for its shareholders.

2. Past Few Quarters Performance

The group's past few quarters' performance is set out in table below, which is self explanatory.

In this latest quarter, the timber division really shines, with PBT increasing by more than 100% q-o-q. This is consistent with other industry players.

Balance sheets remained strong. With net assets of RM1.35 billion and net loans of RM11.7 mil, net gearing is negligible at less than 1%.

3. Concluding Remarks

According to various analyst reports, timber industry is expected to continue to do well going into 2016 (sorry, I have not kept any report that can be cut and paste in this article. But you can refer to RHB Investment Bank's report, if I remember correctly). I expect WTK's timber division to continue to do well going forward.

The plantation division is a dark horse as 11,000 hectares had already been planted. Those estates are only starting to produce (latest quarter revenue RM2.2 mil only). Going forward, this division will be a material source of growth.

If after reading this article and you still don't feel comfortable to invest in this company, please don't force yourself to buy.

Because I want to buy more on Monday.

Have a nice day.

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