Highlights:
Shariah Setting
WELLCAL (7231) : WELLCALL HOLDINGS BERHAD
gab102001
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16 Aug 2012, 03:55 PMPost #121
yeahrolleyesthumbupwub
Today WELLCALL is crazy again!!! Cheers WELLCALL share holders!!!
gen_hwang
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20 Aug 2012, 11:17 AMPost #122
Impressive! Need to look for the next Wellcall.
Asriel
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21 Aug 2012, 11:58 AMPost #123
Ahya right now the market you can't base on technical calculation or paper indication , Why
I say...wow123 @ 13 Jul 2012, 08:29 AM

I totally agree with u wow123, yes this is an unusual time for investment. Do not plan for long term but for short term gain and it is only good for learning experience. Because market volatile is extremely high. Speculators are highly active now. It suddenly goes up like crazy and suddenly drops like crazy as well. It is better to go for short selling or short term gains. For long term investment, maybe good after GE 13. Even then, only if the market has been corrected.rolleyes
Asriel
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21 Aug 2012, 12:46 PMPost #124
...gab102001 @ 16 Aug 2012, 03:55 PM
Yes, congratulation to all Wellcall share holders, I share your gladness.thumbup Wellcall has been showing itself to be an excellent long term investment target. Its growth has been steadily and healthy ever since November 2011. Its rapid rise (about 14%) recently is still acceptable. However, if it develops higher than this on the next day, we should be very cautious.
ILoveDividend
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22 Aug 2012, 11:13 AMPost #125
Wellcall believes expansion is timely

KUALA LUMPUR: The gloomy economic outlook has not stopped WELLCALL HOLDINGS BHD []’s expansion plans. The industrial hose manufacturer aims to add 40% new capacity in view of the sustainable order flow from the replacement market.

In fact, executive director Alex Chew said the company believes the expansion plan is “timely”. Industrial hoses are considered a necessity, he said, and Wellcall, a contract manufacturer, has secured orders from the large contract producers of hoses in the US and Europe, although many have expected a slowdown in economic activity there.

“We are confident as we are operating in a replacement market,” Chew told The Edge Financial Daily.

While Wellcall produces hoses for other large contract manufacturers in the original equipment manufacturer market, the company is also expanding its global reach at the expense of smaller foreign rivals which do not have the means to compete in a more challenging landscape.

As such, Chew said there is a need for Wellcall to increase output otherwise the company would be at risk of losing potential orders, especially since it has used up about 80% of its existing production capacity.

Wellcall’s expansion plan is divided into two phases. The first phase will raise the company’s annual capacity to 42,000 tonnes by end-2013 from the existing 30,000 tonnes a year

“The second stage will depend on our utilisation rate,” Chew said. Timing is crucial when growing its rubber hose output as the manufacturer does not want to flood the market with too much supply, which would not bode well for prices.

In June, Wellcall acquired a vacant 3.3ha plot of leasehold industrial land in Perak’s Kinta enclave for RM4.63 million cash.

The capacity expansion is crucial as Wellcall’s existing facilities nearby have no room for more production space, the company said.

Wellcall is expected to take up a US dollar loan facility to finance its production capacity expansion which is estimated to cost between RM25 million and RM45 million.

Chew said Wellcall wants to capitalise on still-cheap access to US dollar funding, which also serves as a “natural hedge” to the manufacturer’s export-oriented business, which is conducted in the greenback.

“We are looking at US dollar or ringgit-based bank borrowings,” Chew said.

Taking on debt is pivotal to conserve the company’s cash reserves for dividend payments to shareholders.

Debt-free Wellcall had cash of RM39.42 million as at March 31 this year, its latest balance sheet shows. Chew said the company has a dividend policy of rewarding shareholders with at least half of its annual net profit.

He said the US dollar loan is the company’s first debt facility since its listing on Bursa Malaysia in July 2006.

That said, declining natural rubber prices and the strengthening US dollar are essentially tailwinds for Wellcall, which exports 94% of its products in US dollar terms.

Wellcall uses standard Malaysian rubber (SMR) 20 and 5 sheets as the raw material for its products. Over the last six months, prices of SMR 20 rubber sheets declined 34% to RM7.51 a kg as at Aug 16 from a high of RM11.41 on March 28, according to Bloomberg data. SMR 5 prices have fallen by a similar amount to RM7.67 a kg from RM11.59 during the period.

Natural rubber prices have dropped as a weaker outlook for the global automotive sector triggers anticipation of less rubber demand for tyre production. Meanwhile, the ringgit had weakened to 3.128 against the US dollar compared with 2.963 seen in September 2011.

In line with cheaper natural rubber, Chew said Wellcall hopes to pass down the lower raw material cost to its customers to secure more business in the future.

In terms of clientele, Chew said the company, which also manufacturers synthetic rubber hoses, is focusing on industrial hoses for the oil and gas sector which command higher gross profit margins of 30% to 40%.

The Ipoh-based hose manufacturer also produces hoses for users in the mining, automobile, and food and beverage industries. Chew said natural rubber hoses make up 60% and synthetic 40% of Wellcall’s output.

Wellcall’s share price has been on an upward trend since October last year, rising from RM1.128 to a record high of RM2.63 last Friday. The stock has more than doubled with a 108% gain so far this year.

The company has been chalking up steady earnings growth in the past three financial years after it suffered a drop in the fiscal year ended Sept 30, 2009 (FY09).

For the six months ended March 31 this year, Wellcall’s net profit jumped 90% to RM11.23 million, or 8.48 sen per share, from RM5.92 million, or 4.49 sen per share a year earlier. Revenue went up 28% to RM78.7 million from RM61.5 million. The company is expected to announce its third quarter results on Monday.

This article is appeared in The Edge Financial Daily on 22 August, 2012.

http://www.theedgemalaysia.com/business-news/218974-wellcall-believes-expansion-is-timely.html
david
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24 Aug 2012, 12:15 PMPost #126
what is mandrel hose? Don't understand what is the business of Wellcall...question
gab102001
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24 Aug 2012, 01:18 PMPost #127
what is mandrel hose? Don't understand what is the business of Wellcall......david @ 24 Aug 2012, 12:15 PM

http://www.kwongwah.com.my/news/2012/08/22/91.html

迎合持续订单成长 纬钜集团冀增产能
二零一二年八月二十二日 晚上七时二十七分

(吉隆坡22日讯)动荡经济展望并不会阻止纬钜集团有限公司(WELLCAL,7231,工业产品组)的扩充计划,该工业输送管制造商放眼增加40%新产能,以迎合替代市场的持续订单流入。实际上,执行董事周子杰说,该公司扩充活动是‘合时宜’的。

他说,工业输送管被视为必须品,因此在许多人预测美国和欧洲经济活动放缓的同时,身为承包制造商的纬钜集团,仍然获得当地大型输送管合约生产商的订单。

周子杰告诉《TheEdge》财经日报:“我们有信心,因为我们主力经营替代市场。”

在纬钜集团为原厂设备制造商承包其他大型制造商生产输送管的同时,该公司也扩充其环球据点。

因此,周子杰表示,纬钜集团有需要提高生产,否则该公司将面对失去潜在订单的风险,尤其是它现已利用高达80%的现有产能。

纬钜集团的扩充计划分为2个阶段。首阶段将在2013年杪之前,提高该公司的常年产能,由目前的每年3万公吨增至4万2000公吨。

“次阶段将胥视我们的使用率而定。”

在成长其胶管生产时,时间是一个关键,因该制造商不愿导致市场供应过剩,从而不利价格走势。

在6月,纬钜集团斥资463万令吉现金,在霹雳近打收购了一幅面积3.3公顷工业地段。

该公司指出,产能扩充是重要的,因纬钜集团位于附近的现有设备已经没有更大的生产空间。

纬钜集团预料将透过美元贷款便利融资其产能扩充,预测成本介于2500万至4500万令吉之间。

周子杰透露,纬钜集团希望从仍然低廉的美元融资中受惠,同时这也将成为该制造商以美元为主出口业务的一个‘天然障碍’。

“我们探讨美元或令吉银行借贷。”

寻求上述贷款是为了保留公司现金储备以作为派息予股东们。

最新资产负债表显示,目前零负债的纬钜集团截至今年3月31日止拥有现金3942万令吉。而该公司回馈股东们的股息政策,是拨出至少一半常年净盈利。

他说,美元贷款是该公司自2006年7月上市大马交易所以来的首个贷款便利。

这意味着,天然胶价格滑落和强势美元基本上对纬钜集团有利,因后者以美元方式出口94%的产品。

纬钜集团利用SMR 20和5树胶作为其产品的原料。在过去6个月,SMR 20价格已经从3月28日的每公斤11.41令吉高峰,滑落34%至8月16日的每公斤7.51令吉。

根据彭博社的数据显示,SMR 5价格也在同时期由每公斤11.59令吉退至7.67令吉。

天然胶价格的滑跌主因是由于环球汽车领域疲软展望,导致轮胎生产对树胶的需求降低。与此同时,令吉兑美元趋软至3.128,比较2011年9月时达到2.963水平。
ILoveDividend
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24 Aug 2012, 02:42 PMPost #128
what is mandrel hose? Don't understand what is the business of Wellcall......david @ 24 Aug 2012, 12:15 PM

Hi David,

The company uses two different processes to manufacture the rubber hoses. The extrusion method is used to produce hoses with a diameter of less than two inches. In this process, unvulcanised rubber is forced through a die to form hoses of the desired shape and size. As for hoses exceeding two inches in diameter, these are made by wrapping rubber sheets around a mandrel (solid cylinder made of metal).

Basically they are two different method to produce the hose. FYI, profit margin of the mandrel hose is higher than the extrusion hose. Wellcal currently has 32 mandrel lines & 16 extrusion lines.

As per the article in my previous post #107, the new factory will house production lines for its mandrel hoses. So we can expect the profit margin to be increased after the new factory commenced.

Hope this help. smile
david
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28 Aug 2012, 11:25 PMPost #129


Hi David,

The company uses two different processes to manufacture the rubber hoses. T...ILoveDividend @ 24 Aug 2012, 02:42 PM

rolleyesthumbup Understand now on mandrel. What industry utilise the mandrel hose? What type of industry growth/decline will affect the demand.
gab102001
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29 Aug 2012, 10:08 AMPost #130
Great result again by WELLCALL!! rolleyesthumbup
The revenue of US area is 70%++ more compare with last year 3rd quarter!!

Below is the important point in quarter report:
The Group reported a higher PBT of RM8.071 million for the current quarter ended 30 June 2012 compared to PBT of RM7.137 million recorded in the preceding quarter ended 31 March 2012. The increase in PBT is not in line with the decline in turnover and are mainly attributable to the following:

(i) Lower raw material cost;
(ii) Higher unrealised foreign exchange gain of RM0.694 million achieved compared to RM0.204 million recorded in the preceding quarter ended 31 March 2012; and
(iii) Lower administration cost for the current quarter due to one off staff bonus payment of RM0.635 million made in the preceding quarter ended 31 March 2012.
ILoveDividend
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29 Aug 2012, 10:37 AMPost #131
Highlight for Q3 report of FY2012:

Forum | MalaysiaStock.Biz

The Group reported a profit before taxation of RM8.071 million for the current quarter ended 30 June 2012 compared to PBT of RM6.383 million recorded in the corresponding quarter ended 30 June 2011, representing an increase of RM1.688 million or 26.45%. The increase in PBT is not in line with the decline in turnover and are mainly attributable to the following:
(i) Higher proportion of sales mix in the form of mandrel rubber hose, which yield higher margin than extruded rubber hose;
(ii) Lower raw material cost; and
(iii) Higher unrealised foreign exchange gain of RM0.694 million achieved compared to RM0.509 million recorded in the corresponding quarter ended 30 September 2011.

Prospects
The outlook for the global economy remains challenging and uncertain. We expect economic growth in 2012 to slow and as such, anticipate that global demand will decline. Nevertheless, the Group’s strategies remain focused on leveraging on its extensive customer network, competitive products, quality services and a wider range of products to enhance its competitive edge.

My personal views:
1) Business getting slower for coming quarters as the demand is decreasing especially in Q3.
2) Should be able to maintain EPS 4Cents for coming quarters and so do the dividend unless company want to pay back the loan for the factory expansion.
3) Not a good time BUY now.
4) We will only able to see revenue & profit jumping when the new factory commence. So, upside from now on is limited.

Please share your opinion here. Thanks.
Asriel
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29 Aug 2012, 10:53 AMPost #132
Highlight for Q3 report of FY2012:

...ILoveDividend @ 29 Aug 2012, 10:37 AM

thanks for wonderful "homework," brother, appreciate your comment here.thumbup
benny_s
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29 Aug 2012, 10:23 PMPost #133
Highlight for Q3 report of FY2012:

...ILoveDividend @ 29 Aug 2012, 10:37 AM

So, is it good time to sell now?price keep droping after announcement.
ILoveDividend
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30 Aug 2012, 08:52 AMPost #134

So, is it good time to sell now?price keep droping after announcement.benny_s @ 29 Aug 2012, 10:23 PM


Hi Benny,

Recent pullback may be caused by news below:

傳大馬建議 SMR20定價每公斤RM10
(吉隆坡28日訊)馬來西亞將在下月,于印尼萬隆召開的馬印泰三國橡膠產品國際會議中,提出SMR20橡膠價格每公斤10令吉,取代7.47令吉的價格。

 《新海峽時報》報導說,此建議主要幫助大馬橡膠小園主收入,預計若成事,小園主收入可增長30%或以上,並有多達23萬名小園主因此受惠。

 報導引述消息說,聯邦土地發展局(FELDA)副董事莫哈諾凱拉尼指出,該會議將在下月的第一個星期于萬隆舉行;參與會議的國家包括馬來西亞、印尼及泰國。

 “以每4公頃的土地計算,每名橡膠小園主每月可獲3000令吉的收入;價格穩定后,可進一步保障他們應享有的福利。”

 目前,橡膠生產成本介于每公斤4令吉至5令吉之間;橡膠小園主可在價格穩定后,每月利潤不斷增加。

 另外,橡膠業小園主發展局(RISDA)總監拿督旺莫哈末祖基也同意,橡膠價格穩定后,橡膠小園主可從中受惠的看法.
benny_s
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30 Aug 2012, 11:14 AMPost #135


Hi Benny,

Recent pullback may be caused by news below:

傳大馬建議 SMR20定價每公斤RM10...ILoveDividend @ 30 Aug 2012, 08:52 AM

It's quite big challenge for wellcal,30% increase in material cost...

gab102001
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30 Aug 2012, 03:22 PMPost #136

It's quite big challenge for wellcal,30% increase in material cost...

benny_s @ 30 Aug 2012, 11:14 AM


Hope they can replace with SMR5. Based on the news, they are using SMR5 and SMR20 as raw material..star
gab102001
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14 Sep 2012, 08:59 AMPost #137


Hi Benny,

Recent pullback may be caused by news below:

傳大馬建議 SMR20定價每公斤RM10...ILoveDividend @ 30 Aug 2012, 08:52 AM


Looks like the news is just a rumor. So far the price of SMR20 is still remain as floating and consider low (below RM8.50 / kg) lol
Yummydividend
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24 Nov 2012, 12:24 PMPost #138
Just like a Fixed deposit, without disappointing the shareholders, 4 cents again! thumbup
gab102001
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26 Nov 2012, 10:39 AMPost #139
Just like a Fixed deposit, without disappointing the shareholders, 4 cents again! ...Yummydividend @ 24 Nov 2012, 12:24 PM

Luckily I bought this at start of the year. Dividend yield is equal to 12% and the stock price is almost double up !!!!! Great performance!! yeah

I expected the explode performance again after 2 years when the new factory is complete and start for production. thumbup
Yummydividend
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26 Nov 2012, 12:00 PMPost #140
Envy sad... I sold when T get 50% gain, now buy back at premium.. learn from mistake..now I buy as a MAN! Every month buy like an unit trust!

yeah doh drool lol mad notworthy question rant rolleyes sad shutup shy smile star sweat thumbup wub cry


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