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Stocks In Focus SG (Chew’s Group, CosmoSteel Hldgs, KLW Hldgs) – 22/11/13
Chew’s Group FY13 Net Profit Up 10%
For its latest fiscal year ended 30 September 2013, Chew’s Group posted an 18.6 percent rise in turnover to $28.3 million, bolstered by higher sales of designer and generic eggs. This was mainly attributable to an increase in daily production volume by approximately 60,000 eggs in 2013, up from 400,000 a year ago. In line with higher number of chicken reared, amortisation of biological assets rose from $12.4 million to $15.1 million. Additionally, employee benefits expense hiked 21.7 percent to $31.2 million as a result of hiring an in-house team of delivery drivers to replace outsourced personnel during the course of the year as well as increased headcount to handle higher production volume. Consequently, Chew’s Group net profit gained 10 percent to $2.3 million. Separately, the construction of Chew’s Group’s biogas plant is in progress and is expected to be operational by 2H14.
Significance: Moving forward, Chew’s Group investment in research and development projects to process its spent hens and eggs into “ready-to-eat” foods would create another revenue stream and an avenue for the firm to dispose its spent hens as it plans to introduce the Chew’s Chicken Soup to the market in FY14.
CosmoSteel’s FY13 Earnings Sank 42.4%
For the year ended 30 September 2013, CosmoSteel Holdings reported turnover of $155.7 million, a marginal increase as compared to $155 million in FY12. This was mainly attributed to a $35.6 million rise in sales revenue from customers in Japan which was offset by a $26.5 million decline in sales revenue in Singapore. Despite an increase in revenue for the year, gross profit has slumped 12 percent to $29.2 million. This was underpinned by a squeeze in gross profit margin arising from intense price competition. Other charges for the year amounted to $0.6 million which was mainly due to realised and unrealised foreign currency exchange losses, compared to a $1.4 million credit in FY12. Consequently, the company registered $6.4 million in earnings for FY13, representing a 42.4 percent decline from $11.1 million in FY12.
Signifiance:In view of the global uncertainties, CosmoSteel expects market conditions to remain challenging and competition within the industry to be intense both in the local and global markets. The company has proposed a final tax-exempt cash dividend of $0.01 per share for FY13, which translates to a dividend payout of 41.5 percent.
KLW Holdings Secures 3 Supply Contracts Worth $6.4m
KLW Holdings has secured contracts for the supply and installation of doors for two residential developments, Hillsta and Water Bay EC, which was mentioned in an announcement on 17 July 2013. In addition, the company has also secured a contract to supply and install timber doors for a residential project, The Topiary EC. The three projects’ value totaled to approximately $6.4 million. The first contract is for Hillsta, a condominium housing development comprising of 416 units of residential flats and strata terraces, worth approximately $1.1 million and was awarded by main contractor, China Construction (South Pacific) Development, with a date of completion by 3 October 2015. The second contract, worth $1.9 million, was awarded by Qingjian International (South Pacific) Group Development for the Water Bay EC, an 383-unit executive condominium housing development, to be completed by July 2015.The third contract was also awarded by Qingjian International (South Pacific) Group Development for another project, The Topiary, a 700-unit executive condominium housing development, worth $3.4 million and is scheduled to be completed by December 2015.
Significance: These three newly secured projects are part of a total of seven projects secured by KLW ever since its re-entry into Singapore’s market in 2010. The company views its entry timely to ride the construction boom of Singapore’s residential projects.
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