Y.S.P. Southeast Asia Holdings Bhd

General Review

Pharmaceutical and healthcare industries are gaining momentum to be on the rise as time passes. With the pure allocation of RM2.28 billion for Healthcare expenditure in 2014 budget, these sectors seek to remain attractive and dynamic. Naturally defensive, Pharmaceutical and healthcare serves one of the most basic humanity needs in “Maslow Hierarchy of Needs”, despite of the economic settings, regardless of the market sentiments. One of the most innovative and competitive pharmaceutical company that caught my attention recently is Y.S.P. Southeast Asia Holdings Bhd. Under the lead of Dato’ Dr. Lee Fang Hsin, Y.S.P.SAH continue to record steady growth in their business. Slowly but Surely.

Business Model 

Y.S.P.SAH operates in three segments: (Pharmaceutical Trading), which is engaged in the import, export and trading in various kinds of pharmaceutical products, (Pharmaceutical Manufacturing), which is engaged in the manufacturing of pharmaceutical products, and other operations, which is engaged in (Investment holding).

Financials

(Source: malaysianstock.biz)

(Source: klse.i3investor)

- Y.S.P.SAH has been recording a stable Revenue growth of 171% over 10 years (70 million to 190 million)

- A healthy Growth in Net Profit attributable to shareholder of 112% over 10 years (8.3 Million to 16.1 million)

- Total Asset of RM299 Million, Total Liability of RM69 Million and Total Equity of RM230 Million

-Decreasing Liability & Increasing Equity, with the Total D/E ratio (0.3/0.7), (a low gearing company)

-Healthy balance sheet with Cash Pile, Cash-Per-Share of RM0.44 cents

Y.S.P.SAH, with the current synergetic partnership with all its subsidiaries around the world, seeks to strengthen its position in Malaysia and the Southeast Asia region. In addition to the concurrent marketing network in Singapore, Vietnam, Cambodia, Myanmar, Indonesia and Thailand, Y.S.P.SAH is looking forward towards a better financial results. Along the way, Y.S.P.SAH is gaining market share abroad (export to Indonesia was 2.7 times higher in 2013, followed by a 63.2% growth in Philippines, trailled by an increasing sales in Singapore and Cambodia). A new manufacturing plant in Lippo Cikarang- Jawa Barat Indonesia is in progress and to be completed by mid-2014 expected to boost production and penetration. Bear in mind, further penetration in Vietnam, Indonesia, Myanmar and Thailand are expected to boost an explosive results, WHY?

- Vietnam population approximately 92 million (3 times Malaysia population)
- Indonesia population approximately 253 million (8.3 times Malaysia population)
- Mynmar population approximately 54 million (1.8 times Malaysia population)
- Thailand population approximately 67 million (2.2 times Malaysia population)

There have been rumors on Y.S.P.SAH registering a new anti-diabetic product which will be use worldwide. If the rumors came to be true, Y.S.P.SAH will be on the rise soon.

(Lembaga Tabung Haji as one of the Shareholder)

Valuation

-2013 EPS 12.17 cents
With the estimated minimum 10% growth of EPS for the upcoming years, Using 10 years Discounted Earning Per Share Method

-Intrinsic value RM1.80

- Assume it is trading at 15 to 17 times PE, it will be trading at RM1.94 – RM2.19 

NTA
-Y.S.P.SAH is trading at a slight discount below the NTA

(Source: bursamalaysia.com)

Technical 

Y.S.P.SAH has been looking to challenge it's resistance at 1.75 &1.84

-Short-Term Target Price RM1.84

-Long-Term Target Price RM2.00

(Wednesday, 16-7-2014 Ex-date for dividend (0.065))