Background
Poh Kong Jewellery (POHKONG, 5080) commenced business in 1976 specialized in retailing and manufacturing of exquisite jewellery. POHKONG Group is the largest retailer chain in Malaysia and the largest retailer of gold jewelleries and gemset jewelleries in Malaysia. POHKONG offers a wide range of gold ornaments and fine jewelleries specially created by its team of skilled craftsmen and designers. To add variety to its range of fine jewelleries, POHKONG also carries imported jewelleries. Its products are divided into two main categories, viz gold and gemset jewelleries. POHKONG is synonymous with designexcellence, meticulous craftsmanship and exceptional quality jewellery ranging from gold to diamonds and gems. Its brands are recognised as household names in Malaysia and abroad.
- Good Experience in Industry
Established in 1976 with its first outlet in Petaling Jaya, POHKONG continues to be at the forefront of the jewellery industry and enjoys tremendous growth. Being listed in Bursa Malaysia since 2004 has driven POHKONG to even more success since its inception. Today, POHKONG has its own manufacturing facility in Shah Alam and has reached 102th outlets, thus earning its
position as Malaysia’s largest jewellery retail chain store.
POHKONG’s passion in the business and its dedication to providing fine jewellery of top-notch quality and international standards have always played a pivotal role. For quality assurance, POHKONG ensures that stringent measures are constantly undertaken without compromising design excellence. That is why POHKONG is a jewellery brand that is synonymous with superior quality and meticulous craftsmanship.
POHKONG’s passion in the business and its dedication to providing fine jewellery of top-notch quality and international standards have always played a pivotal role. For quality assurance, POHKONG ensures that stringent measures are constantly undertaken without compromising design excellence. That is why POHKONG is a jewellery brand that is synonymous with superior quality and meticulous craftsmanship.
- Growing Sales
POHKONG reported sales of RM975.78 million for the fiscal year ending July of 2013. This represents an increase of 17.5% versus 2012, when the company's sales were RM830.12 million. Sales at POHKONG have increased during each of the previous five years (and since 2008, sales have increased a total of 92%). Sales of Manufacturing saw an increase that was more than double the company's growth rate: sales were up 106.7% in 2013, from RM92,221.00 to RM190,637.00.
2009 – RM541,636,000
2010 – RM561,244,000
2011 – RM692,419,000
2012 – RM830,118,000
2013 – RM975,784,000
- Consistent Earning
POHKONG recorded Profit Before Tax was more than RM38 million for the past 5 years. The PBT is consistent and has been increasing in recent years.
2009 – RM38,558,000
2010 – RM44,799,000
2011 – RM57,672,000
2012 – RM70,949,000
2013 – RM40,575,000
- Solid Shareholder’s Fund
Shareholder’s fund of POHKONG increased steadily over the past 3 years. Shareholder’s fund rose 12.9% to RM442,515,607 as at FYE 2013 versus RM391,817,553 in the previous year end.
2011 – RM345,996,853
2012 – RM391,817,553
2013 – RM442,515,607
- Consistent Payout of Dividend
POHKONG paid dividend of RM0.014 each year since FYE 2009. This has translated into dividend yield of 2.9%.
- Trading at Discount
POHKONG’s share price is trading at discount of 122% based on NTA of RM1.07 in FYE 2013.
I noticed that NTA of POHKONG was RM0.76 in 2010. POHKONG earned total RM0.38 per shares within 4 years. However, the shares price still trading at same level as 4 years ago.
- Shares Price Still Trading at Low Level
Price of POHKONG still trading at same level since beginning of 2014 (closed at RM0.47 on 2/1/2014). In fact, POHKONG currently is trading at 5 years low price since 2009.
- Low PER
POHKONG is trading at PER of 5.65X while Jewellery industry is trading at average PER of 8X. Below is the comparison of PER between POHKONG and other jewellery companies.
POHKONG
|
TOMEI
|
DEGEM
| |
Share Price (RM)
|
0.475
|
0.65
|
1.03
|
Market Capital (Million)
|
194
|
90
|
138
|
Earning Per Shares (RM)
|
0.0841
|
-3.18
|
0.1198
|
PER
|
5.65
|
N/A
|
8.15X
|
POHKONG is expected to be traded in PER of 10X in long term.
Target Price
Short term Target : RM0.67 (based on PER of 8X)
Long Term Target : RM0.84 (based on PER of 10X)
Below are the financial reports for POHKONG.
Announcement
Date |
Financial
Yr. End |
Qtr
|
Period End
|
Revenue
RM '000 |
Profit/Lost
RM'000 |
EPS
| ||||||
10-Jun-14
|
31-Jul-14
|
3
|
30-Apr-14
|
183,121
|
4,125
|
1.01
| ||||||
26-Mar-14
|
31-Jul-14
|
2
|
31-Jan-14
|
226,914
|
1,292
|
0.31
| ||||||
19-Dec-13
|
31-Jul-14
|
1
|
31-Oct-13
|
180,125
|
4,645
|
1.13
| ||||||
24-Sep-13
|
31-Jul-13
|
4
|
31-Jul-13
|
304,062
|
8,707
|
2.12
| ||||||
Fiscal Year
|
31/7/2011
|
31/7/2012
|
31/7/2013
|
Currency
|
MYR ('000)
|
MYR ('000)
|
MYR ('000)
|
INCOME STATEMENT
| |||
Net Turnover/Net Sales
|
692,418
|
830,118
|
975,784
|
EBITDA
|
75,654
|
91,592
|
64,420
|
EBIT
|
67,092
|
82,429
|
54,014
|
Net Profit
|
41,204
|
51,566
|
33,969
|
BALANCE SHEET
| |||
Intangibles
|
1,485
|
1,485
|
1,485
|
Fixed Assets
|
88,613
|
88,277
|
119,254
|
Long Term Investments
|
528
|
528
|
528
|
Stocks/Inventories
|
443,668
|
549,210
|
569,447
|
Cash
|
24,249
|
22,186
|
40,332
|
Current Liabilities
|
198,368
|
155,013
|
169,633
|
Long Term Debt
|
21,308
|
127,581
|
136,626
|
Total Shareholders Equity
|
345,996
|
391,817
|
442,515
|
KEY RATIOS
| |||
Operating Margin
|
9.75
|
10
|
5.6
|
Return on Equity Capital
|
12.55
|
13.98
|
8.14
|
Net Profit Margin
|
5.95
|
6.21
|
3.48
|
Current Ratio
|
2.44
|
3.83
|
3.75
|
Debt to Capital at Book
|
0.25
|
0.31
|
0.34
|
