Wednesday, October 14, 2009

Why I Like WEIDA


That's the problem when your company is based in East Malaysia. It takes time to be discovered as most research houses do not wish to travel too much to cover a stock. Its not a big cap, so the interest is even more dim. To me, WEIDA is easily one of the more exciting value add industrial products. In their motto "to be the leading untilities infrastructure specialist" is a mouth ful but when you survey their range of products and services, you totally get that management knows where they are headed.

http://www.weida.com.my/

WEIDA's products and services include: manufacture of high density polyethylene engineering products; commissioning and maintenance of sewage systems; cultivation of oil palm plantation; offers a full spectrum of telecommunication networking services from initial construction and installation to long term maintenance of these network facilities.

WEIDA offers a full spectrum of telecommunication networking services from initial construction and installation to long term maintenance of these network facilities. Network Construction Services include:
• Construction of towers
• Fully equipped control room
• Telecommunication equipment installation services
• Power supply / generator facilities

They are in the manufacturing, distribution and installation of high-density polyethylene engineering products. They include water storage tanks, sewerage systems, septic tanks, smooth and corrugated pipes, in and open sea aquaculture cages and rural sanitation products.
WEIDA also provides project management services in water supply, sewage systems and aquaculture through its 51% owned subsidiary, Saruwas Sdn Bhd. To note, the company''s manufacturing facilities are located in Kuching in Sarawak; Kota Kinabalu in Sabah and Nilai in Negeri Sembilan. The main raw materials used are resins and additives. Approximately 75% of the resin''s requirement is sourced overseas.

WEIDA’s tire recycling division is the latest venture into the environmental sector in Malaysia. Millions of old tires are disposed into the country’s landfills every year, causing environmental, fire-safety and health hazards. As part of pollution reduction program In developed countries, much effort has been put into developing technologies to extract value from this wasted resources.

WEIDA has embarked into acquiring the technology to convert waste tires into the form of the versatile ECOFINE rubber powder. WEIDA recycles waste tires to produce ECOFINE powder from its Sejingkat plant in Kuching, Sarawak and the new KKIP plant in Kota Kinabalu, Sabah. The combined annual tire processing capability is 20,000 metric tonnes, which yields almost 12,000 metric tonnes of rubber powder per annum.

WEIDA's net EPS for 2008 and 2009 were 8.4 sen and 11.8 sen respectively. Considering that it paid 4 sen dividend in 08 and 7.5 sen in 09 (dividend yield 7.4%) .... the stock has no business being under RM1.00. I like the business divisions - they are in value add industrial products with an environmental bent. Its has a solid underpinning in its recurring earnings stream from fixed rental income from cellular telecommunication service providers leasing the telecommunication towers and O&M income of Matang septic sludge treatment plant. Its NTA is RM1.02. Very well managed. I like the fact that stock has been accumulated surreptitiously over the last couple of weeks. Thin volumes would be a worry, hence its more of a buy and hold.
Shares Issued: 133.33m

Updated: September 9, 2009


Weida Management Sdn Bhd

20.53%


HLG Nominee (Tempatan) Sdn. Bhd. (Assar Asset Management Sdn. Bhd. for Assar Industri Sdn. Bhd.)

8.93%


Amanah Raya Nominees (Tempatan) Sdn. Bhd. (Skim Amanah Saham Bumiputera)

6.32%


Dato Choon Chin LEE

5.57%


Lembaga Tabung Haji (TH)

5.25%


Hong Swee SIM

4.31%


Wei Wui LIM

3.29%


A recent write up on WEIDA in NSTP on 30 September 09: 
...... a Sarawak-based company specialising in utilities
infrastructure,
is making Syria as its base to expand into the Middle
East, including Jordan,
Libya and Oman.
"We will strengthen and consolidate our position in Syria first
before
we venture into other countries there," said its group managing director
Datuk Lee Choon Chin after the group's annual general meeting in Kuching
yesterday.

Under the bilateral agreement between Syria and Malaysia,
Weida was awarded a
turnkey contract to carry out a master plan to study, design
and build sewerage
and water treatment plants in Damascus.
Lee said the RM370 million contract,
awarded two years ago, is 50 per
cent complete. Apart from the Middle East,
the group also plans to expand its
operations in the Philippines.
"As a leading manufacturer of polyethylene engineering products in
Malaysia,
we have now expanded our manufacturing base into the
Philippines, with our first
factory in Manila.


Weida
posted a record pretax profit of RM26.6 million for the
financial
year ended March 31 2009 on revenue of RM267.8 million, up from
RM198.9
million previously. Lee said the increase in both revenue and pretax
profit demonstrated
Weida's resilience in the face of the sharp economic
downturn and the
associated volatilities in raw material prices.

"
Weida's resilience is also enhanced by its balanced and diversified income base,
which is derived from both within and outside its home-base
Sarawak, and
includes recurrent income arising from long-term contacts
such as the rental
of telecommunication towers built by the group in
Sabah, and foreign income
derived from an on-going project in the Middle
East," he said.

Weida
has over 200 telecommunication towers spread throughout Sabah.
"We plan to build about 50 towers every year," he said, adding that revenue
derived from the rental of the towers by service providers came
to between
RM40 million and RM50 million a year.

NOTE: The above opinion is not an invitation to buy or sell. It serves as a blogging activity of my investing thoughts and ideas, this does not represent an investment advisory service as I charge no subscription or management fees (donations are welcomed though). The content on this site is provided as general information only and should not be taken as investment advice. All site content, shall not be construed as a recommendation to buy or sell any security or financial instrument. The ideas expressed are solely the opinions of the author. Any action that you take as a result of information, analysis, or commentary on this site is ultimately your responsibility. Consult your investment adviser before making any investment decisions.

end March 2009 / 2008

Return on Equity (ROE)

11.29%

8.76%

Debt to total assets

0.33%

0.38%

Enterprise Value / EBITDA

7.45

15.95

Net Profit

15m

10.65m

1 comment:

see said...

Not a very exciting company but why the spike in activity last 2 days. Also what they gonna do with proceeds from sale of its Mutiara Goodyear shares...higher dividends?