Friday, August 13, 2010

Delloyd finally has volume, time to fly?

Delloyd remains very cheap. EPS at 44-53 sen for 2010-11, translating into PE of 5.7x-6.9x, very undemanding for a company which has auto parts manufacturing facilities, bus manufacturing, vehicle distribution and palm oil plantation across different ASEAN countries.

Its auto parts manufacturing facilities span across different ASEAN countries such as Malaysia, Thai and Indonesia catering for domestic and overseas customers including Proton, Perodua, Honda, Toyota, Hyundai, GM, Daihatsu, Ford etc etc (almost all major auto manufacturers). In addition, it manufactures auto replacement parts (similar to NHFatt) but this segment only contributes about 12% out of the total auto revenue. It also has bus manufacturing business in Indonesia, an extremely huge market to expand while the company is planning to bring in this business to Malaysia as well.

Surprisingly, it has a sizable total plantation area of close to 16K ha with 1449 ha in Malaysia while the remaining is in Indonesia. FFB yield in its Indo plantation is very high at 24-25 MT/ha/year. This segment contributes about 15% of earnings to the group while the remaining contribution comes from the auto segment. Slightly more than half of its plantation is either unplanted or immature. This signifies greater expansion potential in earnings from this segment in the future.

Net gearing is very low at 5.3%. The stock price will continue to be supported by share buybacks (Most of its Bursa announcements were about share buybacks, which means the company still think that the stock price is cheap, VERY GOOD!!!)

This post is a bit untidy. I'll post a more elaborate and organized one soon :)

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