Monday, March 9, 2015

WellCall ... Wat Happen Kena Selldown !!!

Its executive director of hose maker Wellcall Holdings Bhd, Chew Chee Chek has stepped down due to health reasons. He was appointed to the board on April 17, 2006. Chew has a direct stake comprising of 21.618 million shares or 6.5% in Wellcall.

An industrial rubber hoses used across a broad swath of the economy … for air and water, welding and gas, oil and fuel, automotive, shipbuilding as well as F&B sectors.

Wellcall is Malaysia’s largest exporter of industrial hoses.

The world’s largest industrial hose maker has gained from a weaker ringgit against the USD because it does not hedge on forex.

It makes rubber hoses for six major applications – air and water, oil and fuel, welding and gas, shipbuilding, automobiles as well as food and beverage.

Due to ringgit volatility it generally does not stock up its inventory and order beyond two months.

It sees to be commissioned new manufacturing plant to be a timely move as it will further address higher demand from the US, especially with its economic recovery.

It is in full swing preparing for the commissioning of Factory 3 for July or Aug 2015. It will be used to cater mainly for the US market.

It may take two to three years to fill up its new capacity.

Earnings grew steadily for the past four years. In FY Sept 2013, WellCall saw lower revenue – as customers held back purchases in anticipation of lower prices – but still managed to grow profits due to lower rubber costs. In FY2014 both sales and net profit rose – by 11.3% to rm146.4 million and 19.1% to rm29.4 million. Net margin increased from 11% in FY2011 to over 20% in FY2014.

The current (March 2015) regime of low commodity prices and weak ringgit bodes well for WellCall. Almost 91% of the company’s sales are exported, to all over the world.

The company is sitting on net cash of rm41 million.

It has a 50% dividend payout policy.

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