Tenth day---Figures about Kian Joo

   I have been spending for whole day to key in the data of Kian Joo into Excel. Better than what I did for Jobstreet last time which spent me about 1 week to complete the 7years data while Kian Joo has about 11 years data but just took me 4 hours.

  Maybe I could make it more efficient next time by spending only 2-3 hours. Most of the people wouldn't understand why I was willing to take time just to key in such data. Initially I doubted on that---Will I get any information by doing such?

  Actually I will and everybody who is passionate with fundamental type investing style will find the information by doing so.  Let's have a picture about what I have done:

  According to the data, the company has experienced growing stage in terms of revenue. However, its net profits are always fluctuating from year to year although revenue increasing. There are several factors causing unstable net profit---costs. In manufacturing, cost means everything. Whoever is able controlling the cost strictly while having huge volume of production, it is the winner of this game.

  What cost involved in Tim manufacturing company? the raw materials. When supply of raw materials shrinks, it means price goes up. Also, the company focuses on domestic market which its customers mostly are those big industry players such as F&N.

  Secondly, the company has its one quarter,on average, of its revenue made up by receivable form. For each RM 100 sales it makes, about RM25 is paper profit which has yet to be received. The cash flow is not strong enough as its borrowings always 2 to 4 times of its cash. For each RM1 cash it owns,there will be RM2 or RM4 of debt.

  Net profit margin still within expectation as it has about 5 to 10 per cent. It is the slightly above the average of the manufacturing industry.

  The most important is ROE. It has about 8 to 10 per cent, on average. Well, there is a room for improvement for it. Especially in Management, since the company was taken over by Can-One berhad, a can and tin manufacturing company, it is the time for Can-one to make things smoothly because changes are happening.

  In conclusion, it is a moderate performance company in terms of figures but the industry is still growing if the consumption of goods such beverages and foods, some industries used packaging and also some home used products are growing too.

Ninth day---Kian Joo Factory Berhad

  It is no doubt that Malaysia is transforming from export-oriented to domestic-demand-oriented economy. However, we have seen no improvement has been made although there are a lot of plans came out. It takes times and Malaysia needs a whole restructuring reformation to ensure the transformation is going to happen.

  Manufacturing is still the core of the Malaysia economy. We have many successful manufacturing firms which we should be concerned about such as Kian Joo---the can and tin makers.

  For those who has never heard about it, you should take note that Kian Joo is one of the most successful can&tin maker in Malaysia. Other than that, it also involves in packaging business although it is just a smart portion of company's revenue.

  Before 1999, the company had grown steadily and maintained net profit of RM50 million above but it came to turn down after 1999 when the company's net profit dropped to about RM 33 million although the revenue increased.

  Improvement was seen started at 2002, the company's net profit grew again steadily and achieved RM 50 million again in 2005 but fell again in 2006. It is due to the increasing raw materials costs and some of the associated companies faced losses during the year.

  The company's net profit fluctuated after 2006 and currently it has about RM 104.04 million net profit.

  We can see that this company is sensitive with raw materials prices. Although it has very huge volume production line and serves for various famous companies like Nestle and F&N, the net profit margin is low. It means that the company needs to control costs strictly in order to avoid losses.