Favelle Favco (FAVCO, 7229) - business growing, share price yet to catch up

About 2 years ago, I mentioned about Favelle Favco (FAVCO, 7229) here.

Now, its share price already more than doubled up (29-Nov-2012 closing: RM1.47, 5-Sep-2014 closing: RM3.31, dividend paid between the period: RM0.18. Gain = 137.41%).

This stock counter caught my attention again, as its business continues growing over the period, but its share price topped at RM3.89 on 9 April 2014, after that dropped to RM3.24 on 9 May 2014, and has been side-lining until now. In fact, its share price dropped a bit during the last week in August 2014, and has been struggling between the range of RM3.25 to RM3.39 recently.

Below is its 3 year price chart, showing that despite its share price is laggard behind its business growth speed, but it is still keeping on moving up at a steady rate. In any month of the year, its share price in current year is always higher than previous year.

Now, lets see the changes in its fundamental over the past 2 years.

Traditionally, the 1st quarter is a slow period for FAVCO, which hopefully will improve in 2nd quarter, and becoming better in 3rd quarter, then slow down a bit in 4th quarter. This is reflected in its quarterly profit margin as shown in the table above.

The clients of FAVCO, who specialized in cranes, are mainly from Oil & Gas sector, and also from Construction (i.e. high-rise building), Marine (i.e. ship terminals), etc.

Its revenue derived from its outstanding order booked. Once the order booked materialized into revenue, the outstanding order booked will decrease. At the same time, new projects are secured with new Purchase Order (PO) received, which will then add on to the order booked figure subsequently.

FAVCO will announced their new substantial PO received in Bursa Malaysia Announcement website. PO with smaller value are not announced, but will be included in the outstanding order booked figure announced in the next quarterly report.

We can see that FAVCO's outstanding order booked has increased to above billion since the 3rd quarter of 2013. Over the past 2 years. every quarter in between the quarterly reports announcement, FAVCO had at least one announcement on new substantial PO received without fail. This mean they continue to get new business throughout the year, while fulfilling the secured projects on hand.

FAVCO announced their 2014Q2 report on 25 August 2014. This is a very good result, as its revenue and net profit growth are substantial, be it compared to last quarter or to same quarter in last year. It net profit broke a new record high. Its profit margin also gone above 10% for the 2nd time. However, its share price has not react to this good result, probably dragged by overall market sentiment.

Note that on 3 September 2014, FAVCO announced new substantial order booked amounting RM119.9 million. There are 2 more months to go before they announce the next quarterly report in November 2014. If within the next 2 months, they announce another new substantial order booked, then it will be confirmed that their outstanding order booked is breaking a new record high!

On 5 September 2014, FAVCO's share issued is 216.51 million. Its trailing 4 quarters net profit is RM84.228 million. We can calculate its EPS to be RM84.228/216.51 = 38.90 sen. With this, we can calculate its PE ratio on 5 September 2014 closing to be 331/38.90 = 8.5.

As long as FAVCO's business continue to grow, it is a matter to time for its share price to catch up and reflect its fundamental strength.


Disclaimer: This article is intended for sharing of point of view only. It is not an advice or recommendation to buy or sell any of the mentioned stock counters. You should do your own homework before trading in Bursa Malaysia.

HTC One (M8) users get 100GB free Google Drive storage (doubled from previous 50GB)

Today, I received an email from Google Drive with title the "Changes to your Google storage plan". Its content is as below:

Huray! HTC One (M8) users' free Google Drive storage is now increased from 50GB to 100GB! This includes existing users who have already activated the free Google Drive storage and had already received 50GB free storage, now it is doubled up to 100GB too.

This 100GB of Google Drive storage is on top of the existing free storage of 15GB, which is shared among Gmail, Google Drive and Google+ photos.

Thanks to HTC and Google!

Upgraded my HTC One Android smartphone from M7 to M8

Last week, I traded in my HTC One (M7) for a new HTC One (M8). I am glad that after slightly more than one year of usage, the M7 still carries a good resell value, and I got my brand new M8 at the cost of RM1,000 only.

To date, the M7 is still a great Android phone. Anyhow, it is a good move to trade it in for a brand new M8 while it still has good resell value.

One of my main reason to upgrade my M7 to M8 is to get better cameras both front and back. M8 has duo back camera, and front camera is 5-megapixel (compared to 2.1-megapixel in M7). M8 camera has additional features too, such as the UFocus function.

Another main reason is the availability of the innovative HTC Dot View case for M8. I can check current time and temperature, make call, and answer call without uncover the M8 from the Dot View case. The M8 screen also auto wake up when I open the cover.

M8 is longer than M7 and is having a larger 5" display (compared to 4.7" in M7). However, the bottom part of its display is used by softkeys, and the actual display length of M8 is slightly less than M7 (meaning, M7 displays slightly more vertical content on its screen). This is due to both M7 and M8 are having the same resolution of 1920x1080, but the M7 has higher pixel density at 468ppi compared to 441ppi in M8. This is something that M8 loses out to M7!

As a result of lower pixel density, the text in M8 (of same font and size) appears larger than in the screen of M7.

M8 is slightly slimmer than M7, and comes with Corning Gorilla Glass 3 (claimed to be 3 times more damage resistant and 40% more scratch-resistant than Gorilla Glass 2 used in M7).

The aluminium build in M8 is more solid than M7. There will be wear and tear in M7 micro USB port and volume button. Its seems that the M8 design is more durable. IMHO, the position of power button and headphone port on M8 is also better than M7.

The 2600mAh Li-Po battery in M8 surprisingly charges much faster than the 2300mAh Li-Po battery in M7. With a larger battery capacity, the M8 can generally last longer in one charge cycle than M7.

M8 also comes with a micro SD card slot, enable you to expand its storage up to 128GB. You will need the tray eject pin to access the micro SD card holder, the same way as the nano-SIM card holder. Bear in mind that Android Kitkat has imposed some restriction on the use of non-internal storage in order to improve on security, which will limit the usage of micro SD card in the phone.

M7 is using micro-SIM card, while M8 is using nano-SIM card. As the size is different, you can't simply migrate over the SIM card from M7 to M8 without modification or replacement.

Processor wise, M8 is using a newer and faster quad-core Snapdragon 801 compared to quad-cord Snapdragon 600 in M7. In normal use, you won't feel much different in terms of speed between them. You will feel the different when using processor hungry apps, such as certain 3D games.

Both M7 and M8 received software update to Android 4.4.3 with Sense 6.0 recently. There isn't much different between them in terms of the OS and default software. M8 has some additional features such as Motion Launch which you can't find in M7.

M8 is using Boom Sound audio enhancement (which can't be turned off when using internal speakers), while M7 is using Beats Audio. Both are great and is a key HTC feature that makes a difference from other smartphones in the market.

I have already got some additional storage space in Google Drive by using M7. I received some more additional storage in Google Drive after upgraded to M8. This can also be considered as one of the major advantage of upgrading M7 to M8.

As a conclusion, it really worth it to upgrade HTC One from M7 to M8, while the M7 still has good resell value now. You will get the newest HTC flagship smartphone with slightly larger screen, better build, faster battery charging speed, new features (particularly major enhancement in camera functions), and innovative Dot View case.