Stock With Momentum: Yoong Onn Corporation

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Yoong-Onn_swm_theedgemarkets

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Yoong Onn Corporation Bhd (+ve)

YOCB (Fundamental: 2.8/3, Valuation: 1.8/3) saw higher trading activity since it first triggered our momentum alert on July 24. The stock closed 2.9% higher at RM1.08 yesterday.

The company is an integrated designer, manufacturer, distributor and retailer of home linen and bedding accessories, with established brands such as Novelle, Jean Perry and Bedtalk. Domestic market accounted for 81% of its total revenue in FYJune2014, with the balance came from export, mainly to Singapore.

From FY2010-FY2014, revenue and earnings grew by CAGR of 11.6% and 6.6% respectively. For 9MFY2015, revenue grew 1.9% to RM147.0 million but net profit declined 7.6% to RM16.7 million, due mainly to higher operating expenses and provision made for certain expenses.

Dividends averaged 3.8 sen per share from FY2012-FY2014, giving a net yield of 3.5%. Last month, the company paid an interim dividend of 2 sen per share for FY2015.

The stock trades slightly above book value with trailing 12-month P/E of 9.0 times.

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This article first appeared in digitaledge Daily, on August 5, 2015.