Hup Seng

Hup Seng Industries Bhd. is involved in manufacturing and trading of biscuit and beverage (Incomix brand coffee). Besides the domestic market, it also exports it products to over 40 countries in Asia, USA, Russia and Africa. Overseas market accounts for almost 30% of its revenue in FY2009 (no information given for FY2010.)

The ratios I look at (refer to my earlier post).)indicates it is in good financial health. The company has no borrowings.

current ratio =    3.2
working capital - LTD = $75.25m
DE ratio = 0.058
LTD/PAT = 0.37
cash/debt = 1.27

5 year historical average ROE and ROR is 11% and 7% respectively. Revenue and earnings have grown compared to 5 years ago. Profit margin improved significantly in 2008 onwards compared to 2004-07, perhaps due to the crash in commodity prices. The company paid at least 10 cents per share of dividend annually since FY2005. It  is already paying dividends totalling 10 cents for FY2011.

Risks to it profitability include raw material cost (palm oil, wheat, fuel) and the government’s gradual withdrawal of subsidies.

It's share is currently trading at a PE ratio of 8.9.

Added HUPSENG and BJTOTO

Today I added to my BJTOTO holdings at $4.10 and bought into HUPSENG at $1.72.

Berjaya Toto is in the gaming sector and is basically a dividend stock.

Hup Seng Food Industries manufactures biscuits, cookies and crackers as well as a coffee manufacturing division. Around 70% revenue is derived from domestic sales (as at FY2009). It has a 60% dividend policy, as far as I know. Based on its FY2010 annual report, it has no short term loans and only $8.6m of non-current liabilities with a cash pile of $54m.