Stocks Watchlist

Stocks with strong business model and market leader in the sectors they operate and also having good profit consistently over the years building up strong balance sheet and positive operating cash flow which I am monitoring closely for entry at the right price:

PIE @RM3.33 – probably trading at forward PE 15 or lower after coming Q4 announcement by end Feb 2024.

Potential to develop further into an EMS player with its expansion plan and being a subsidiary of “Honghai/Foxcon Group” will certainly open up more business opportunities. From Q3 announcement in Nov 2023, the Company stated that in order to accommodate new business opportunities, plant 5 and plant 6 are under major renovation and expansion. Plant 5 has just completed the necessary renovation and plant 6 is expected to be ready in Q3 2024. Both expanded facilities will be able to support PIE's next 5 years' growth.

Samchem @66 Sen
The largest chemical trading and distributions in Malaysia and a cross ASEAN is probably on road to recovery given its share price trending higher and higher.

Dufu @ RM1.74 –
Waiting for a lower price for entry. Company is having about 40% share of Global HDD spacer ring market and would be on road to recovery for better profit given both Seagate and Western Digital are fairly positive of market recovery with their recent Dec Qtr announcement.

RGB @ 31 Sen
A defensive stock to buy and hold for dividend and offer opportunity for growth with the regularization of the gaming industry in Philippines and the booming tourism industry in Asia. Co is trading at an attractive PE 6.2 as we are estimating Company to close FY 2023 with EPS of about 5 Sen or more. Company has a net cash of RM177 mil (11.47 Sen per share) as at 30 Sept 2023 and for the 9 mths ended 30 Sept 2023 the operating cash flow generated was RM126 mil (FY 2022 RM120 mil). You cannot be wrong with this solid cash generating Co where its customers paid deposits for orders made.

Ulicorp @RM1.49
Company paying qtrly dividend and amount paid for FY 2023 is 8 Sen (FY 2022 6 Sen) giving a dividend yield of 5.37%. At RM1.49, it is trading at PE7.74 using 4 rolling qtrs. EPS of 19.24Sen. Company has a net cash balance of RM99.2 million (at 31 Dec 2022 RM72.5 million) or cash per share of 45.5 Sen and net asset of Company at 30 Sept 2023 was RM1.70.


SKB @61.5 S3en
At 61.5 Sen, it is currently trading at PE 5.41 based on FY 2023 EPS of 11.36. It is currently trading a PE5.39 based on 4 rolling qtrs. EPS of 11.42 Sen.
A GEM WITH HUGE POTENTIAL FOR UPSIDE WITH ITS PROPOSED NEW 9.8 ACRES NEW FACTORY IN SETIA ALAM ECO BUSINESS PARK TO BE READY IN 2025 FOR ITS EXPANSION PLAN FOR NEW PRODUCTS. CURRENT PLANT CAPACITY IS FULL.
ITS NEW INNOVATIVE ANTI FLOOD SHUTTERS IS TAKING OFFVERY WELL. From our market sources we heard IOI Mall is installing the anti flood shutter and a MNC in Penang is also installing it and orders coming from other Companies in Penang. This higher profit margin shutters will be driving the profit in FY 2024 and going forward.

The Co in our opinion is so much undervalued given its business potential and asset undervaluation.
The book value of the 12 acres (522,720 sq ft) factory land in Kota Damansara is RM58,300,013 equivalent to RM111.53 per sq ft. The market value from my research is RM300 to RM350 PSF. At RM300 PSF, there could be a revaluation surplus of RM98.517 mil or about 75 Sen per share which is more than its current market capitalization.

A PE of 7 will support a valuation of 79.5 Sen based on FY 2023 EPS of 11.36 Sen. Hold this stock for a longer-term view and not for trading.

Coastal @ 1.73
Hold and it should be doing well going forward and its balance sheet would be strengthen once its JVC Co obtain term loan financing (supported by its continuous stream of gas processing income generated to support loan repayment ) and repay advances of RM700 mil loan by Coastal to the JVC Co.



$PIE / 7095 (P.I.E. INDUSTRIAL BERHAD) $SAMCHEM / 5147 (SAMCHEM HOLDINGS BERHAD) $DUFU / 7233 (DUFU TECHNOLOGY CORP. BERHAD) $RGB / 0037 (RGB INTERNATIONAL BHD) $ULICORP / 7133 (UNITED U-LI CORPORATION BERHAD)