Highlights:
Shariah Setting
WELLCAL (7231) : WELLCALL HOLDINGS BERHAD
harizwealthiest
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08 Jun 2013, 10:08 PMPost #161
yahooooo i dont hv this stock yeah
Brian9818
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09 Jun 2013, 10:11 AMPost #162
I think the >6% (based on $2.36) div payout will cushion the stock price in the near term.
CNY2012
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14 Sep 2013, 09:40 PMPost #163
A good sharing about WELLCAL.

http://tradertoinvestor.blogspot.com/2013/09/my-stock-wellcal-7321_10.html
ILoveDividend
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07 Oct 2013, 10:05 AMPost #164
Anyone still holding? WELLCAL is on uptrend again. thumbup
gab102001
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08 Oct 2013, 10:35 AMPost #165
Anyone still holding? WELLCAL is on uptrend again. ...ILoveDividend @ 07 Oct 2013, 10:05 AM
Unless the PE is over 25. If not I will continue hold it. wub
ILoveDividend
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08 Oct 2013, 10:55 AMPost #166

Unless the PE is over 25. If not I will continue hold it. ...gab102001 @ 08 Oct 2013, 10:35 AM


Good to hear that. thumbup
A new investment house (MONDRIAN INVESTMENT PARTNERS LIMITED) has became the TOP 3 shareholder of WELLCAL. I think this is the reason why its share price increased so much recently.

I'm still waiting for the new factory to be completed.
ILoveDividend
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28 Oct 2013, 12:27 PMPost #167
Broke RM3 with volume. rolleyes
CNY2012
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05 Nov 2013, 11:12 AMPost #168
Wellcall’s expansion to meet five-year demand growth

Business & Markets 2013
Written by Lyana Shohaimay of theedgemalaysia.com
Tuesday, 29 October 2013 10:27

KUALA LUMPUR: Wellcall Holdings Bhd says its third factory, slated for completion in the first quarter (1Q) of 2015 will meet the market demand for its products over the next five years. Wellcall is one of the largest manufacturers of industrial rubber hoses in the country.

“We are currently in the process of finalising the factory layout and machinery,” said executive director Alex Chew Chee Chek during his session at the iCapital.biz Bhd Investor Day 2013 last Saturday.

The new factory will be built on a tract measuring about 3.3ha located 1km away from its current factory site in Lahat, Perak.

The company has also reclaimed land in the past few months to expand the total land area to approximately 3.5ha.

“This expansion is expected to increase the capacity of only the mandrel hose section ... by 100% in two stages and up to 70% of the total manufacturing capacity,” said Chew, adding that the company’s expansion has always been demand driven.

“Every time we expand, it is a meaningful expansion. We don’t want to end up with excess capacity that will put pressure on our pricing.”

Wellcall’s last expansion was in 2006, when its capacity more than doubled.

The company is looking at capital expenditure (capex) ranging from RM35 million to RM38 million in two stages for the third factory.

The bulk of the capex will be used in the first stage to invest in more sophisticated machines, mandrel machines with different specifications, targeting the North American mass market which the company intends to penetrate.

The expansion will see the company gear up, with 50% of the capex funded by short-term borrowings.

Wellcall has a dividend policy of 50% payout of its profit. For the 2012 financial year ended Dec 31 (FY12), the company paid out a 16 sen single-tier dividend per share (DPS), a 33.3% increase from the total payout of 12 sen in FY11.

The company has so far announced 13 sen DPS for the past three quarters.

The company manufactures two types of rubber hoses: mandrel and extrusion. Mandrel is the higher margin product. The company will focus on manufacturing mandrel hoses for three uses: air and water, welding and gas, and oil and fuel industries.

Wellcall closed on Bursa Malaysia yesterday at RM3.03.

This article first appeared in The Edge Financial Daily, on October 29, 2013.

http://www.theedgemalaysia.com/business-news/260590-wellcalls-expansion-to-meet-five-year-demand-growth.html
LCCHONG
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04 Feb 2014, 12:10 AMPost #169
WELLCAL analysis - http://lcchong.wordpress.com/2014/02/03/wellcalfundamental-analysis-3-feb-2014/
Jacky
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07 Feb 2014, 04:26 PMPost #170
WELLCAL analysis - http://lcchong.wordpress.com/2014/02/03/wellcalfundamental-analysis-3-feb-2014/LCCHONG @ 04 Feb 2014, 12:10 AM

Hi LCCHONG, what's your target price for WELLCAL? Do you think it is still a good buy now? question
LCCHONG
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07 Feb 2014, 04:52 PMPost #171


Hi LCCHONG, what's your target price for WELLCAL? Do you think it is still a good buy no...Jacky @ 07 Feb 2014, 04:26 PM

- Fair values:
– 5Y DCF: 3.76 – 4.28
– EY%: 2.69 – 3.39
– Absolute PE: 3.97 – 5.02 (over optimistic_
- I think the range of fair value will be 3.3 – 4.2.
- Even if WELLCAL dropped from 4.0 to 3.3, WELLCAL is now fully valued.
- I may buy WELLCAL if it drops below 3.0.
Jacky
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10 Feb 2014, 11:50 AMPost #172

- Fair values:
– 5Y DCF: 3.76 – 4.28
– EY%: 2.69 – 3.39
– Absolute PE: 3.97 – ...LCCHONG @ 07 Feb 2014, 04:52 PM

Thanks for the info. notworthy
LCCHONG
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01 Mar 2014, 09:45 PMPost #173
WELLCAL analysis - http://lcchong.wordpress.com/2014/03/01/wellcalfundamental-analysis-1-mar-2014/
ILoveDividend
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26 Aug 2014, 09:56 AMPost #174
Wellcall expansion on track

AFTER a one-year delay caused by land issues, industrial hose manufacturer Wellcall Holdings Bhd’s third factory, its largest investment to-date, is going full steam ahead.

Piling works had commenced in end-June, putting phase 1 of Factory 3 on track for commissioning by April next year, the group’s co-founder and executive director Alex Chew Chee Chek tells StarBizWeek.

The new facility, located about 1km from Wellcall’s existing factories in Ipoh, is expected to increase its mandrel hose production, the firm’s core product, by 50% to 38,000 tonnes per annum.

Phase 1 and 2 of Factory 3 will boost its total installed capacity by 70% from 33,000 tonnes to 35,000 tonnes currently. Phase 2 could be rolled out as early as six to eight months after phase 1 comes on stream, but this will depend on how quickly demand picks up for the additional capacity, according to Chew.

Wellcall, Malaysia’s largest exporter of industrial hoses, is mulling whether to include a spiral production line in Factory 3, which can manufacture much higher volumes compared with a mandrel line.

It makes rubber hoses for six major applications, namely air and water, oil and fuel, welding and gas, shipbuilding, automobile, and food and beverage.

Its products are exported to 60 countries across all continents, mostly to foreign distributors, which in turn supply to original equipment manufacturers.

In its previous financial year ended Sept 30, 2013 (FY13), exports made up 91% of the group’s turnover, with the bulk of it shipped to Asia. Domestic sales accounted for only 9%.

Wellcall sells two types of hoses: mandrel and extrusion. The latter are smaller-sized with a diameter of 5cm and below. Mandrel hoses are more lucrative for the group, with profit margins ranging from 70% for mandrel to 20% for extrusion, Chew says.

Even so, Wellcall does not plan to discontinue its extrusion lines as it is one of the few manufacturers in the world that allows clients to mix and match hoses in a single order, a niche service that has earned it a steady following.

While the global industrial hose market grows at a seemingly modest pace of 4%-5% a year, Wellcall is expanding to satisfy demand in Asia, and after production at its existing plants peaked in recent years.

Factory 2 is running on full capacity at 85%-90% since May, the first time it has done so since Wellcall was listed, says Chew. The mandrel lines at Factory 2 operate 24 hours a day.

“Most of our exports previously went to the United States, Europe and the Middle East, but Asia is now our largest market, led by China,” Chew quips.

He believes sales of hoses related to the mining and oil and gas industries will continue to be robust, citing the need for hoses following an agreement between China and Russia that will see the latter sell piped gas to China.

Wellcall’s own performance has rebounded since the second half of FY13, helped by the economic recovery in the United States and Europe, plunging raw material prices and a stronger US dollar.

Chew says the current overproduction of natural rubber, Wellcall’s main raw material, from Cambodia and Vietnam looks set to last for seven years.

The market for synthetic rubber is also oversupplied. “Prices of synthetic rubber before this were stuck at US$4,000 (RM12,640) per tonne for a long time because there was a limited number of suppliers. It has dropped to US$2,800 (RM8,848) per tonne the last time I checked, and is still declining.”

Standard Malaysian Rubber 20 has tumbled 33% over the past year to RM5.20 per kg, Bloomberg data shows. The commodity averaged RM6.44 per kg during the period.

But given that close to 100% of Wellcall’s transactions are denominated in US dollars, the recent strengthening of the ringgit against the greenback does not bode well for the company.

Nonetheless, a stronger ringgit means Wellcall will be able to import synthetic rubber and chemicals more cheaply.

Painful lesson

During the crisis years of 2009-2010, Wellcall was hit hard when some of its clients, spooked by the global financial meltdown, cancelled 50% of their orders overnight.

“It was then that Wellcall realised it could no longer rely on manual labour and embarked on an overhaul of its processes,” Chew says.

Today the group operates on a fraction of the manpower it used to employ. In the past, four people managed one line, producing eight hoses per shift. Its new lines, each manned by a single worker, outputs 22 to 26 hoses per shift.

Wellcall spent RM4mil instead of RM32mil to install its mandrel facilities in Factory 2, Chew explains.

“We saved money by hiring a retired mechanical engineer to design and refurbish a semi-automated mandrel line.

“It was a risk for us as this was our longest line at 60m. The South Korean firm would have done it for a much pricier RM1mil per line.”

All this forms part of Wellcall’s stringent “cost down, value up” philosophy, according to Chew.

If it decides to go ahead with the spiral line, the group is likely to buy and refurbish an old line, which could cost less than half the price of a new machine, he adds.

Wellcall is set to see its cost base fall further in a couple of years once all its equipment is fully depreciated.

Its land cost is also one of the lowest in the industry at RM5.20 per sq ft, Chew points out.

Slow turtle

Wellcall’s turnover and earnings per share have grown 10.73% and 12.57%, respectively, on a compounded annual basis, since FY09. Its operating margin in FY13 stood at 26.44%, the best in five years.

“The beauty of our business is that we don’t need to expand every year. Wellcall is a slow turtle,” quips Chew.

Yet its share price has been anything but. Shares of Wellcall gained 61% in the past one year to close at RM1.69 on Thursday. In August alone the counter has surged 10%.

At current levels, it trades at an indicative gross dividend yield of 3.55%, according to Bloomberg data.

Wellcall completed a 5-for-2 share split on March 21. It counts London-based Mondrian Investment Partners Ltd and a number of institutional funds as shareholders. Mondrian is its second-largest shareholder with a 9.83% stake, filings show.

They were probably attracted by Wellcall’s generous dividends.

Over the past five years it has returned almost 100% of its earnings to shareholders, with payouts exceeding 100% in some years.

This strategy is deliberate. “If we have no other use for the cash, we will share the windfall with shareholders,” says Chew.

For the six months to March, the group posted a 40% jump in net profit to RM14.24mil as revenue rose 11% to RM69.27mil.

It declared total dividends of four sen for the period, up 25% from a year ago, on earnings per share of 4.29 sen, or a 93% payout.

The company possess a solid balance sheet with net cash of RM45mil as at end-March, or net cash per share of 13 sen. Wellcall is cash-rich because it insists on a 50% cash deposit upfront for all purchase orders, and up to 100% cash in riskier markets.

In the near-term, it expects to gear up to maintain its dividend payouts and fund the construction of Factory 3.

Although the total cost for Factory 3 has yet to be finalised, Wellcall is setting aside some RM41mil-RM45mil, inclusive of land acquisition, Chew points out.

The firm plans to secure an Islamic term loan of between RM18mil-RM20mil with a five-year tenure. It is also targeting to be syariah-compliant come the end of the year, when the Securities Commission updates its list of syariah-compliant stocks.

It is aiming to keep the payback period for Factory 3 within three years. For comparison, Wellcall recouped its investment for Factory 2 in one year and eight months, Chew says.

Factory 3 will feature some 18 mandrel production lines, but the final decision on the spiral line will be made once the group has weighed all the risks.

http://www.thestar.com.my/Business/Business-News/2014/08/23/Wellcall-expansion-on-track-It-plans-to-boost-capacity-by-70-with-third-factory/
Yummydividend
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30 Aug 2014, 12:40 AMPost #175
WELLCALL HOLDINGS BERHAD

Type Announcement
Subject OTHERS
Description Clarification of Article appearing on The Star, Star Business Section, page 8 on Saturday, 23 August 2014 with the title of WELLCALL EXPANSION ON TRACK

We refer to the article published by The Star on Friday, 23 August 2014 pertaining to the above matter.

In the said article, we noted that some of the facts stated therein were inaccurate (of which has been underlined and bold in the said article) and we wish to clarify/correct the following:

1. The new facility, located about 1km from Wellcall’s existing factories in Ipoh, is expected to increase its mandrel hose production, the firm’s core product, by 50% to 38,000 tonnes per annum. Phase 1 and 2 of Factory 3 will boost its total installed capacity by 70% from 33,000 tonnes to 35,000 tonnes currently.

Clarification:

The new facility, located about 1km from Wellcall’s existing factories in Ipoh, is expected to increase its mandrel hose production, the firm’s core product, by at least 100%.

Phase 1 and 2 of Factory 3 will boost its total installed capacity by 70% from 33,000 tonnes to 56,100 tonnes.

2. Wellcall sells two types of hoses: mandrel and extrusion. The latter are smaller-sized with a diameter of 5cm and below. Mandrel hoses are more lucrative for the group, with profit margins ranging from 70% for mandrel to 20% for extrusion, Chew says.

Clarification: The gross profit margins ranging from 20% to 70% for its products and depending on product specification and geographical area.

3. “Most of our exports previously went to the United States, Europe and the Middle East, but Asia is now our largest market, led by China,” Chew quips.

Clarification: “Most of our exports previously went to the United States, Europe and the Middle East, but Asia is now our largest market, Wellcall also export to China,” Chew quips.

4. The market for synthetic rubber is also oversupplied. “Prices of synthetic rubber before this were stuck at US$4,000 (RM12,640) per tonne for a long time because there was a limited number of suppliers. It has dropped to US$2,800 (RM8,848) per tonne the last time I checked, and is still declining.”

Clarification: The market for synthetic rubber is also oversupplied. “For instance, prices of EPDM (one of the highest range of synthetic rubber that Wellcall purchase) before this were stuck at US$4,000 (RM12,640) per tonne for a long time because there was a limited number of suppliers. It has dropped to US$2,800 (RM8,848) per tonne the last time I checked.

5. During the crisis years of 2009-2010, Wellcall was hit hard when some of its clients, spooked by the global financial meltdown, cancelled 50% of their orders overnight.

Clarification: During the Lehman brother crisis started in late 2008, Wellcall experienced some of its clients, spooked by the global financial meltdown, cancelled 50% of their orders overnight in November 2008.

6. Today the group operates on a fraction of the manpower it used to employ. In the past, four people managed one line, producing eight hoses per shift. Its new lines, each manned by a single worker, outputs 22 to 26 hoses per shift.

Clarification: Today the group operates on a fraction of the manpower it used to employ. In the past, four people managed one line for Mandrel Production Line, producing eight hoses per shift. Its semi-automated mandrel production lines, mostly by a single worker, outputs 22 to 26 hoses per shift for average diameter industrial hose of three (3) to six (6) inches.

7. Wellcall spent RM4mil instead of RM32mil to install its mandrel facilities in Factory 2, Chew explains.

Clarification: Wellcall spent RM4mil instead of RM32mil on its 32 mandrel production lines excluding other secondary equipment and supporting machineries in Factory 2, Chew explains.

8. If it decides to go ahead with the spiral line, the group is likely to buy and refurbish an old line, which could cost less than half the price of a new machine, he adds.

Wellcall is set to see its cost base fall further in a couple of years once all its equipment is fully depreciated.

Its land cost is also one of the lowest in the industry at RM5.20 per sq ft, Chew points out.

Clarification:

If it decides to go ahead with the spiral line, the group might explore on acquiring a refurbished an old line, which should cost less than the price of a new machine, he adds.

Its land cost is also one of the lowest in the industry at RM5.20 per sq ft for factory 1 and 2 but after averaging land cost for its factory 3 and taking into account of its leasehold period of 99 years, it is average at RM6.20 per sq ft

9. Factory 3 will feature some 18 mandrel production lines, but the final decision on the spiral line will be made once the group has weighed all the risks.

Clarification:

Factory 3 will feature some 18 mandrel production lines at Stage I, but the final decision on the spiral line will be made once the group has weighed all the risks.

In addition, we append a copy of the aforesaid article published by The Star for your ease of reference.

This announcement dated 25 August 2014.
LCCHONG
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01 Sep 2014, 01:32 AMPost #176
WELLCAL Analysis:-

https://lcchong.wordpress.com/2014/09/01/wellcal-fundamental-analysis-1-sep-2014/
Brian9818
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14 Sep 2014, 10:12 PMPost #177
Wellcal DY=10% ? Admin pls update the data. Tq.shy
LCCHONG
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01 Dec 2014, 10:01 PMPost #178
WELLCAL analysis - http://lcchong.wordpress.com/2014/12/01/wellcal-fundamental-analysis-1-dec-2014/
Yummydividend
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20 Jan 2015, 03:38 PMPost #179
Wellcall is only share I wish it drops, I seldom get what I wish for. It drops when I am broke.
LCCHONG
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31 Jan 2015, 03:05 PMPost #180
WELLCAL Analysis - https://lcchong.wordpress.com/2015/01/31/wellcal-fundamental-analysis-31-jan-2015/

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


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