Homepage
PR Newswire
08-11-2010, 05:31 PM
(This post was last modified: 23-10-2013, 03:10 PM by CityFarmer.)
What do you people think about Elite KSB Holdings LTD?
It slaughters, processes and distributes chicken, pork, beef and lamb.
A few statistics:
P/E ratio: 4.9 [As of Today's (8 November 2010) closing price of $0.265]
P/B ratio: 1.19 [As of Today's (8 November 2010) closing price of $0.265]
ROE and ROA: About 27% and 14% respectively.
Yield: 5.7% [As of Today's (8 November 2010) closing price of $0.265]
Pretty good statistics, right?
Furthermore, it has achieved a very high annual earnings growth (about 40%, I think) over the past 5 years starting from 2005.
Even better, it seems to have a slight moat as it has about 25% of the market share in its industry. Also, the number of licenses awarded by the AVA for the operation of chicken slaughter-houses has declined to 10 at the present, from 13 in 1992. Another reason why new competitors are likely to come in even if they manage to acquire the required land from JTC and acquire a chicken slaughterhouse operating license from the AVA (which is unlikely) because the barriers to entry are very high as proper setup requires an extremely high seed capital.
Of course, there are some risks Elite KSB faces. For one, fluctuations in livestock prices affect group's bottom line. Prices of chickens are determined by the chicken farms supplying to Elite KSB, whereas prices of pork are largely influenced by exchange rate movements of the Australian dollar. Its business may also be affected by animal disease outbreaks, failure to offset cost increases to consumers, interrupted supply of raw material from Malaysia and Australia, etc. but all these are mostly temporary industry problems.
Finally, being what I feel as deeply undervalued, the enticing value statistics of the counter and the past performance track record of the company (profits have been rising consistently for the past 5 years - also shows that management is pretty competent) makes me feel that it is a good buy.
Discuss.
It slaughters, processes and distributes chicken, pork, beef and lamb.
A few statistics:
P/E ratio: 4.9 [As of Today's (8 November 2010) closing price of $0.265]
P/B ratio: 1.19 [As of Today's (8 November 2010) closing price of $0.265]
ROE and ROA: About 27% and 14% respectively.
Yield: 5.7% [As of Today's (8 November 2010) closing price of $0.265]
Pretty good statistics, right?
Furthermore, it has achieved a very high annual earnings growth (about 40%, I think) over the past 5 years starting from 2005.
Even better, it seems to have a slight moat as it has about 25% of the market share in its industry. Also, the number of licenses awarded by the AVA for the operation of chicken slaughter-houses has declined to 10 at the present, from 13 in 1992. Another reason why new competitors are likely to come in even if they manage to acquire the required land from JTC and acquire a chicken slaughterhouse operating license from the AVA (which is unlikely) because the barriers to entry are very high as proper setup requires an extremely high seed capital.
Of course, there are some risks Elite KSB faces. For one, fluctuations in livestock prices affect group's bottom line. Prices of chickens are determined by the chicken farms supplying to Elite KSB, whereas prices of pork are largely influenced by exchange rate movements of the Australian dollar. Its business may also be affected by animal disease outbreaks, failure to offset cost increases to consumers, interrupted supply of raw material from Malaysia and Australia, etc. but all these are mostly temporary industry problems.
Finally, being what I feel as deeply undervalued, the enticing value statistics of the counter and the past performance track record of the company (profits have been rising consistently for the past 5 years - also shows that management is pretty competent) makes me feel that it is a good buy.
Discuss.
