Good morning.
Today, we feature a note on Unimech Group Berhad in our FundTech Radar – 16th April 2019. Unimech Group Berhad (Unimech) is a leading manufacturer of valves and pumps. Unimech’s exports constituted approximately 43.5% of its total revenue for FY17.
Fundamental Stance
· A strong 3-year (FYE16-18E) revenue and core PATAMI CAGR of 5.1% and 23.4% respectively.
· Its FY18E core PATAMI margin continued to rise to 6.6% (vs. 4.5% in FY17).
· Its net gearing ratio remains at about 0.34x as at 4Q18.
· 30% of its profits were distributed to shareholders as dividends. Its FY18E dividend yield stood at 3.9%.
· Increase in palm oil production in Indonesia could potentially impact positively on the sales of the valves, which are used in the palm oil mills.
· Unimech is expected to deliver industrial valves with an estimated value of RM130m in the first half of 2019, which is 10% more than in the previous year’s corresponding period.
· Currently trading at a 12-month trailing P/E of 8.6x, which is a 17.2% discount to its domestic peers P/E.
Technical Front
Downward channel breakout.
Resistances: 1.24/1.48/1.60
Supports: 1.02/0.93/0.87
The above information is extracted from CIMB Research Report. For the full research reports, outlook and disclaimers, please logon to your account on www.itradecimb.com.my and click on <Research> Tab under Malaysia.
This FundTech Radar report is intended for educational purposes only. It represents a preliminary assessment of the subject company, and does not represent initiation into CIMB's coverage universe. It does not carry investment ratings and CIMB does not commit to regular updates on an ongoing basis.
16th Apr 2019
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