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Stocks In Focus SG (Courts Asia, Nam Cheong, Super Group) – 13/08/13
Courts Asia Records Net Profit Growth Of 5.1% Y-o-Y
Courts Asia announced its 1Q14 results performance with growth in net profit of 5.1 percent to $7 million compared to 1Q13’s $6.7 million. The growth was mainly driven by an increase in sales of 1.6 percent to $197.1 million with an improvement in gross profit margin to 30.6 percent from 30.1 percent due to the increase in service charge income and a shift in sales mix towards higher margin categories of furnitures. In addition, Courts Asia held a healthy balance sheet with cash position of $184.2 million in cash as at 30 June 2013. Notably, the earnings per shares fell from 1.34 cents in 1Q13 to 1.26 cents in 1Q14 due to an initial public offering exercise of 60 million new shares and its borrowings have increased from $368.1 million in 1Q13 to $472.4 million in 1Q14.
Significance: Despite Malaysia’s macro environment turning more challenging, strong take-up of new HDB flats and private properties in Singapore which promotes furniture sales, and Courts Asia’s expansion in Indonesia are expected to provide it with earning stability. The group is confident to remain profitable in FY14.
Nam Cheong Reports 37.3% Growth In 1H13 Earnings to RM76.5m
Nam Cheong reported strong results performance with a jump of 37.3 percent in net profit to RM76.5 million for 1H13, from RM55.7 million in the corresponding period last year. The group recorded 43.5 percent growth in revenue driven by the robust vessel sales to RM510.1 million in 1H13, from RM355.5 million in 1H12 with a healthy gross profit margin of 19.5 percent in 2Q13. The group held a healthy balance sheet with net gearing improving to 0.31 times as at 30 June 2013, and strong cash position of RM214.1 million in cash. The group’s order book, as at 13 August 2013, stood at approximately RM1.4 billion in value, with 22 vessels contracted for recognition up to 2015. In the first seven months of 2013, the group has sold a total of 16 vessels worth US$311.6 million, surpassing the 7 vessels worth US$166.2 million sold during the same period last year.
Significance: With international exploration and production spending expected to increase and reach a record of US$678 billion by end 2013, alongside Petronas’ RM300 billion capital expenditure, Nam Cheong is confident in achieving a new record for its vessel sales in FY13.
Super Posts 66.5% Growth In 1H13 Net Profit
Leading integrated instant food and beverage maker Super Group reported a net profit of $58.6 million for the six months ended 30 June 2013, up 66.5 percent from $35.2 million a year ago. The results included a $17.1 million gain from the disposal of Super’s 35.3 percent interest in Sun Resources Holdings, an associated company involved in property development projects in China. Excluding the disposal gain, core net profit was still up 18.2 percent at about $41.6 million due to higher operating revenue and gross profit margins. Revenue grew 15.9 percent at $270.7 million for the first half of the year, from $233.7 million a year ago. Food ingredient sales continue to lead the charge by registering a 49 percent increase to $84.4 million from increased production capacity and robust demand for the group’s food ingredients in the Asia markets, namely Indonesia, Taiwan and the Philippines. Similarly, branded consumer sales increased 5.2 percent to $186.3 million due to higher sales into Southeast Asia markets, particularly Myanmar, Malaysia and the Philippines.
Significance: Selling, general and administrative expenses increased about 30 percent for 1H13 on the back of a campaign to promote its newly launched logo and brand identity, as well as an increased headcount due to Super’s expanded production facilities. In the next couple of years, these expenses are expected to be maintained at their current (20 percent) proportion to sales level.
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