United U-li Corporation Berhad

$ULICORP / 7133 (UNITED U-LI CORPORATION BERHAD)
Research by Kenanga

$ULICORP / 7133 (UNITED U-LI CORPORATION BERHAD)
Research by Kenanga
Outperform - TP RM2.30

"A Soft Patch But Outlook Intact"

ULICORP’s 1HFY24 results disappointed. Despite a high plant utilisation in its cable support system segment, its core net profit fell 4% YoY dragged by higher-cost projects. As new capacity expansion is seen to come onstream from end-FY24 onwards, we remain confident ULICORP will be well positioned to benefit from the demand for cable support systems in the upcoming construction boom. We trim our FY24F and FY25F earnings by 21% and 3%, respectively, cut our TP by 3% to RM2.30 (from RM2.38). Maintain OUTPERFORM.

Analyst:
Nigel Ng
nigel@kenanga.com.my

$ULICORP / 7133 (UNITED U-LI CORPORATION BERHAD)

General Meetings: Outcome of Meeting

$ULICORP / 7133 (UNITED U-LI CORPORATION BERHAD)
Research by Kenanga
Outperform – TP of MYR 2.38

“Rising Top Line on Contained Cost”

ULICORP’s 1QFY24 results met expectations. Its 1QFY24 core net profit surged 1.6x YoY on improved sales and lower input cost. It is poised to benefit from the construction boom with its breadand-butter cable support systems. We maintain our forecasts but raise our TP by 25% to RM2.38 (from RM1.91). Maintain OUTPERFORM.

Analyst(s):
Nigel Ng
nigel@kenanga.com.my

Quarterly rpt on consolidated results for the financial period ended 31/03/2024

@boncos Is $ULICORP / 7133 (UNITED U-LI CORPORATION BERHAD) also benefited from data centers? As its cable supporting system is needed in data centers.

$ULICORP / 7133 (UNITED U-LI CORPORATION BERHAD) letup huat ahh. earn 2 rounds now haha. market getting crazy. pandai pandai

ULICORP - Notice of Book Closure

Second Interim Dividend

Annual Audited Accounts - 31 Dec 2023

General Meetings: Notice of Meeting

Annual Report & CG Report - 2023

@boncos $ULICORP / 7133 (UNITED U-LI CORPORATION BERHAD) has volume

@LittleShare personally I find it difficult to trade metal commodities. but I do like those niche players in the space that can consistently generate good FCF no matter the season, especially more so if they are in net cash position.

Of all, $ASTINO / 7162 (ASTINO BERHAD) comes to mind, as well as $ULICORP / 7133 (UNITED U-LI CORPORATION BERHAD) , in no small part influenced by the mental models of @boncos himself haha

While riding a trend, sometimes the best thing to do is , instead of finding a laggard, to just ride the leader. In this cycle, it seems like $PMETAL / 8869 (PRESS METAL ALUMINIUM HOLDINGS BERHAD) is taking the cake. $OMH / 5298 (OM HOLDINGS LIMITED) could be interesting too, as a cheaper alternative to Pmbtech while having the same-ish moat.

Off topic, but I am quite optimistic on plantations hahaha, and I believe the FCF will surprise on the upside. But I could be wrong.

BUILDING MATERIAL
$ENGTEX / 5056 (ENGTEX GROUP BERHAD) $OMH / 5298 (OM HOLDINGS LIMITED) $PMETAL / 8869 (PRESS METAL ALUMINIUM HOLDINGS BERHAD) $ULICORP / 7133 (UNITED U-LI CORPORATION BERHAD)
Research by Kenanga
Neutral

“4QCY23 Report Card: Weak Selling Prices Weigh”

There was deterioration in earnings delivery (against our expectations) by the sector in the recently concluded 4QCY23 reporting season. Players continued to struggle with high-cost inventories and weak ASPs as the global steel sector languished. Nonetheless, prices of both ferrous and non-ferrous metals may have bottomed out as the weak economic outlook of the largest consuming country, i.e. China is partially mitigated by supply constraints. Our sector top picks are low-carbon ferrosilicon (FeSi) and silicomanganese (SiMn) producer OMH (OP; TP: RM1.80) and water pipe maker ENGTEX (OP; TP: RM1.41) on the back of the revival of domestic water projects.

Analyst(s):
Teh Kian Yeong
tehky@kenanga.com.my
Nigel Ng
nigel@kenanga.com.my

$ULICORP / 7133 (UNITED U-LI CORPORATION BERHAD)
Research by Kenanga
Outperform - TP of RM1.91

"Stronger Earnings Pick-up in FY24"

ULICORP’s FY23 results missed our forecast on weak deliveries in 4Q. Its FY23 core net profit grew 9% driven by lower input cost. Its near-term earnings prospects remain strong on the back of a booming construction market. We cut our FY24F net profit forecast by 12%, reduce our TP by 12% to RM1.91 (from RM2.18) but maintain our OUTPERFORM call.

Analyst(s):
Nigel Ng
nigel@kenanga.com.my

ULICORP - Notice of Book Closure

Interim Dividend

Quarterly rpt on consolidated results for the financial period ended 31/12/2023

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)

@jiaming8yap thanks for the feedback and market theme summary! All the best to you too!

@boncos thanks for the advice 👍. Yeah, value play such as $OCK / 0172 (OCK GROUP BERHAD) and $MFCB / 3069 (MEGA FIRST CORPORATION BERHAD) etc. takes years to move

By the way, just curious about your long term portfolio management: (1) when you do value play (buying cheap stock), do you offset the long holding period with higher portfolio weightage (so that when it ripes there are more to harvest)? (2) how many years have it been since you hold your favorite counter $ULICORP / 7133 (UNITED U-LI CORPORATION BERHAD)? 🤣

@tapdance Thanks! It is my conclusion after reading those investing classics, trying to operate the principles I learned in the stock market, and seeking few advices from believable investors which I used to reflect on both the classics and my investment operation.

many steel counter showing signal past few days
mostly are above EMA 10-20-50

looks like time for a move. which one got good chance?

$ANNJOO / 6556 (ANN JOO RESOURCES BERHAD) $ULICORP / 7133 (UNITED U-LI CORPORATION BERHAD) $ASTINO / 7162 (ASTINO BERHAD) $MASTEEL / 5098 (MALAYSIA STEEL WORKS (KL) BHD)

Yeoman Capital appears as a substantial shareholder of $ASTINO / 7162 (ASTINO BERHAD) today together with the executive chairman and his wife. They had increased their holdings from ~18mil to around 22mil-- and collectively with the deemed interests, have crossed the 5% mark.

Coincidentally, @boncos, Yeoman Capital is also a big investor of your $ULICORP / 7133 (UNITED U-LI CORPORATION BERHAD) hahah

@portoftheyear 2024
$YOCB / 5159 (YOONG ONN CORPORATION BERHAD) - 20%
$DAYANG / 5141 (DAYANG ENTERPRISE HOLDINGS BERHAD) -20%
$ULICORP / 7133 (UNITED U-LI CORPORATION BERHAD) -20%
$UNISEM / 5005 (UNISEM (M) BERHAD) -20%
$HSSEB / 0185 (HSS ENGINEERS BERHAD) -20%

@portoftheyear

$SHANG / 5517 (SHANGRI-LA HOTELS (MALAYSIA) BERHAD) 30%
$MI / 5286 (MI TECHNOVATION BERHAD) 30%
$UNISEM / 5005 (UNISEM (M) BERHAD) 20%
$ULICORP / 7133 (UNITED U-LI CORPORATION BERHAD) 20%

@portoftheyear
$ULICORP / 7133 (UNITED U-LI CORPORATION BERHAD) 20%
$SUNVIEW / 0262 (SUNVIEW GROUP BERHAD) 20%
$DUFU / 7233 (DUFU TECHNOLOGY CORP. BERHAD) 20%
$EKOVEST / 8877 (EKOVEST BERHAD) 20%
$SYSCORP / 5173 (SHIN YANG SHIPPING CORPORATION BERHAD) 20%

Happy New Year to @portoftheyear :)

Here's my POTY 2024 picks!
$OCK / 0172 (OCK GROUP BERHAD) – 20%
$HARBOUR / 2062 (HARBOUR-LINK GROUP BERHAD) – 20%
$LHI / 6633 (LEONG HUP INTERNATIONAL BERHAD) – 20%
$FOCUSP / 0157 (FOCUS POINT HOLDINGS BERHAD) – 10%
$ULICORP / 7133 (UNITED U-LI CORPORATION BERHAD) – 10%
FPI – 10%
ELSOFT – 10%

Carrying forward focusp and ock from my POTY 2023 submission previously.

@PortOfTheYear2021

$ARMADA / 5210 (BUMI ARMADA BERHAD) 25%
$VELESTO / 5243 (VELESTO ENERGY BERHAD) 25%
$SYSTECH / 0050 (SYSTECH BHD) 25%
$ULICORP / 7133 (UNITED U-LI CORPORATION BERHAD) 20%
$SAPNRG / 5218 (SAPURA ENERGY BERHAD) 19%

$ULICORP / 7133 (UNITED U-LI CORPORATION BERHAD) - Key beneficiary on the back of construction boom in both private and public mega projects

Strong balance sheet; improved and sustained margins (post the downturns in 2018 - 2020), healthy cash flows and consistent dividend yield.

KPIs to watch, topline growth and profitability margins.