Kian Ann Engineering

[SLC81]

This is one of the old uncles/aunties stocks but it has delivered very good stable result in the last few years, in fact, they are now in net cash position with constant bottom line improvement year after year.

Just announced HY11 result with net profit rose 11.3 percent, Interim Div. of 0.325 cent/share compared to 0.3 cent last year.

[lonewolf]

Here's a snapshot of this company for the last 6 FYs (their FY end 30 June) from FY 2005 to FY 2010:

All numbers in S$'000 (unless stated)

Revenue: 112,383 112,908 129,532 150,198 134,804 149,364
Gross Profit: 23,910 24,033 32,496 38,603 35,491 37,921
Gross Margin: 21.3% 21.3% 25.1% 25.7% 26.3% 25.4%

Net Profit: 6,826 7,250 9,783 11,208 11,609 13,616
NP Margin: 6.1% 6.4% 7.6% 7.5% 8.6% 9.1%

EPS (cents): 2.33 2.55 3.32 2.75 2.63 3.02
NAV (cents): 30.50 32.58 27.94 25.16 27.21 29.43

Dividend Per share (cents): 0.60 0.60 9.54* 0.70 0.70 1.00
Dividend Yield (based on price share at FY end): 3.47% 4.00% 28.91%* 4.12% 4.67% 5.71%
(* passing of Section 44A tax credit to shareholders by way of interim bonus dividend of 8.54c less 18% tax cum a 1-for-2 rights issue)

Current Ratio: 2.48 3.75 2.12 2.20 3.47 4.13
Gearing:50.37% 30.66% 24.18% 33.58% 23.37% 12.76%


Net Cash: 14,318 17,360 13,362 18,110 19,653 26,909
Net Cash from Operating: 10,596 2,213 5,037 10,706 2,857 16,712

FCF: 9,794 1,849 4,789 9,870 1,714 15,992

(Vested)

[corydorus]

What a complete opposite to Spindex.

[Jon-san]

How so?

[Musicwhiz]

What a complete opposite to Spindex.

It would be good to justify such a comment.

Are you referring to consistency of revenues, earnings and Free Cash Flows? Hope you can explain, thanks.

(Not Vested)

[corydorus]

Yes at the instant i thought is quite obvious.
The above results speak. And achieving that in many fronts/measures are clear indicators.

All loses have reasons. Good Mgmt performance is the key.
Making mistake that should well be avoided is not acceptable performance.

[secretinvestors]

Browsed through the financial statement and its looks fairly good and stable. Dividend yield seems very reasonable. The ultimate shock I got was that the price now seems to be a HUGE bargain as viewed from both its earning power and its assets!

Would really like some comments about this stock!

[secretinvestors]

Full year results for Kian ann:

http://info.sgx.com/webcoranncatth.nsf/V...8002D9087/$file/KianAnn_Ann_FY114Q_FullYrResults_29811.pdf?openelement

http://info.sgx.com/webcoranncatth.nsf/V...8002D9087/$file/KianAnn_MediaRelease_FY11_FullYrResults_29811.pdf?openelement

I'm pretty satisfied with the results overall. Most importantly, the market price is still a great bargain at $0.20!

[secretinvestors]

Proposed share buyback mandate and dividend policy.

http://info.sgx.com/webcorannc.nsf/Annou...endocument

Nice yields with pretty low payout

[Jacmar]

Browsed through the financial statement and its looks fairly good and stable. Dividend yield seems very reasonable. The ultimate shock I got was that the price now seems to be a HUGE bargain as viewed from both its earning power and its assets!

Would really like some comments about this stock!

I once did a preliminary study as part of a management consultancy project for one of their competitors. Currently they all are experiencing a boom in their business as there is a Resource(mining and forestry) boom globally in the last couple of years. Buying a stake in them is a bet on the continuation of this resource boom and the resource industry is highly correlated to the global economy which at the moment is facing strong headwinds.

at the company level, their business is very capital intensive as they have to stock up on so many spare parts. margins are not that great as the major principals (likes of caterpillar, komatsu etc) is not going to give away fat margins to you. good thing is that customers will also come back to you to get reqd spare parts as there are not that many alternatives unlike your car spare parts where you can buy cheaper alternatives.so monitor the ROA and FCF/sales closely.

given their business model don't expect this to be a multi bagger and expect boom and bust earnings along with the globally economy.

not vested