Combine Will : A turnaround story ?










FY2011








FY2012








FY2013








FY2014








FY2015
Income Statement
Total Revenue1,778.191,526.551,420.042,068.141,967.65
Cost of Revenue(1,558.34)(1,347.00)(1,341.18)(1,900.34)(1,797.44)
Gross Profit219.85179.5578.86167.80170.21
Operating Expenses(124.87)(107.74)(50.32)(126.18)(128.10)
Operating Income94.9971.8228.5441.6142.11
Others, Net(26.04)(18.66)(23.04)(18.96)(20.92)
Income before Taxes68.9453.165.5022.6521.20
Tax(18.86)(18.66)(3.88)(4.04)(4.20)
Extraordinary Items and Adjustments(9.52)2.615.650.030.54
Net Income40.5637.117.2718.6417.54

Figures in HK Dollars

Combine Will International Holdings Limited (Combine Will) is an investment holding company. The Company is an original design manufacturer (ODM) and original equipment manufacturer (OEM) supplier of corporate premiums, toys and consumer products. It is also a supplier of plastic injection and diecasting molds for manufacturers around the world and a distributor of machineries and precision tools for mold making and automobile production. The Company operates through three operating divisions: ODM/OEM engaged in the manufacturing of toys and premium products; Moulds and Tooling engaged in the manufacturing of molds and models, and Trading engaged in the trading of machineries and premium goods. The Company has six manufacturing facilities located in Dongguan and Heyuan, Guangdong Province and Guangxi Province. 


Combine Will is currently traded at S$0.565, with a dividend of HK$0.246, or 7.56% yield.

My take:
1) Steep discount to NAV of S$3.39, trading at 0.17x book value or 83% discount to NAV. There is some bargain based on NAV.

2) Share buyback. Till date, Combine Will has purchased a total of 472,600 shares from the market. This provides a support for the share price but has greatly reduced the liquidity of shares on the market.

3) Has resumed dividend payout after many years. The last time it paid dividend is in 2011. A 9cts dividend was declared. A dividend of 1cts was proposed in 2010. However a share consolidation of 10 into 1 was done, so the effective dividend should be 10cts.

4) Potential privatization target. With the management holding 76% of the company and a depressed share price of S$0.565 in 2016 compared to $3.10 in 2011, this company is worth the hold. 

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