DOMINAN

Dominant Enterprise Bhd is involved in the manufacturing and trading of flat laminated and moulded wood products, targeting furniture makers and home fitting manufacturers.

Let's look at some figures for Q1FY12:

• current ratio =1.84
• working capital - LTD = $76m
• debt/equity = 0.05
• LTD/PAT = 0.6
• cash/debt = 0.13

So it is in a pretty healthy financial position (except for the last item.)

ROE and ROR is 12% and 4% respectively on a five year average basis. The ROR is on the low side, unfortunately. For comparison, it is around 12% for Evergreen and Eksons.

Revenue and profit has risen since listing in 2003. Currently, local market accounts for a major part of its revenue. It also exports to Australia, Singapore, Europe, US, Asia and other overseas market.  Risks include material cost, oil price and forex risks.

From its annual report 2011: "Our strategy going forward is to identify expansion opportunities in overseas markets and to develop innovative products that cater to consumers’ tastes."

I can't find any analyst covering it, probably because of its low market capitalization.

It is undervalued according to my calculations, so I have been eyeing it for some time. It's liquidity is rather low and price has been on the downtrend since early this year. However it gives a good dividend yield, around 7%. Dividend payout around 30-40% the past few years.

Its price have been consolidating for the past 3 months. If you have bought it at 48c, now you will already have about 10% gain. I noticed it risen on some volume yesterday, so I have initiated a position in it today.