Tuesday, May 4, 2010

Yee Lee (RM2.53): Big timers accumulating? Liquidity to increase

From: William Koay

From the graph above, we can see that Yee Lee’s price moved from $1.45 to $2.55 over a 3-month period from Feb to April. The wonderful part is the gradual upward trend of its price movement showing some big timers are accumulating the shares or playing up the share in an orderly manner. The volume done on each week is very impressive for a small counter like Yee Lee which has only $62.5m shares , one of the smallest in KLSE. It made a net profit of $20.5m last year giving an EPS of 32 sen . Just base on last year result and its current price of $2.53, its PE is only 8x as compared to many other food companies which have PE of more than 10x. Some have more than PE of 15x like F&N or Nestle.

Now let us look at its business turnover and profit for the past few years below :

Year Turnover Net profit
2005 $371m $4.37m
2006 $423.3m $3.3m
2007 $507.9m $10.3m
2008 $694.1m $17.4m
2009 $703.1m $20.1m

Again, from the above data, we can see clearly that both its business and net profit increased over the past 5 years continuously.

In addition, despite a difficult year for the whole world economy in 2009, Yee Lee was able to improve its results. The reason being it is dealing with consumer staples. Products produced by Yee Lee are cooking oils, mineral water, plastic bottles, industrial boxes, detergents, oil palm, industrial and medical gloves.

For a small company which has a small paid-up capital to have business turnover of more than $700m last year is impressive enough and its business keeps on expanding.

Yee Lee just recently announced bonus and splitting of shares to improve its liquidity in KLSE. It is giving a bonus of 2 for 5 existing shares and then splitting of shares into 2 lots of 50ct will be done after the bonus (After bonus and splitting of shares, its number of shares will be about 175m). It means that if you buy 5 lots of Yee Lee at $2.53, you will ultimately get 14 lots of Yee Lee share at an average cost of about 90 sen only.

So, let see whether the Red Eagle will continue to fly higher and higher.

Just all. Good Luck and Happy Investing.

1 comment:

  1. From May 4 to yesterday's close May 13, Yee lee has increased by 58 cents which is 23% return in one week......this is despite the euro troubles and greek crisis. Also Yee Lee due to release their results soon.