FIBON - 2Q15 earnings +90% YoY

2Q14 earnings surged 90% to RM1.31m

Last Friday on 30-Jan-2015, FIBON announced its 2Q15 earnings which saw its net profit jumped 90% YoY to RM1.31m. The increase in 2Q15 is due to higher profit margin generated from its manufacturing products. Note that its 2Q15 PBT Margin has improved to 47.1% against 2Q14’s 28.5%.

Strong net cash of RM23.03m or 23.5 sen per share.

With RM23.03m cash and zero debt, FIBON balance sheet is very strong at RM23.03m net cash or 23.5 sen cash per share. Compared to end-FY14 (ending May), net cash increased by 4%. Compared to its share price of 48.5 sen currently, 48% of the share price is in cash.

Cash flow control is good.

For 1H15: Operating Cash Flow is RM3.04m, Capex RM0.15m, Financing Cash Flow RM0.0m. Effectively, the Company generated extra RM1.0m in 1H15 to RM23.03m.

First contribution from factoring business likely to cause FY15 earnings be better than FY14

FIBON has for the first time added “Financing Income” as its new segment in its 1Q15 quarterly report. Although the segment is still making small loss of RM11k in 1H15, this factoring business will likely support the manufacturing division earnings and margin as its business portfolio of customers expand. Recall that FIBON secured the factoring business in Aug 2013. For more information on how factoring business work, http://www.investopedia.com/terms/f/factor.asp

FIBON theoretically worth 64.5 sen or 33% UPSIDE

Items	Value (RM m)
Current business valued at 10x PE of FY14 earnings	40.0
Net Cash	23.0
Total Value	63.0
No of shares	98
Value Per Share (sen)	64.5