Chinwel - 得失之间

Chinwel 的股价自2月26日欧盟决定撤销对中国紧固件反倾销税之后，股价就一路的跌至RM1.61 (跌了约25%左右)才出现反弹。在4分股息除权后，它的股价在1.61-1.66之间摆动，因此我个人认为这项坏消息已经反映在股价上了，而股价也逐渐稳定了下来。

接下来就是等5月出炉的业绩了，从管理层访谈中(如下文)，他们预测新条例只会影响bulk purchase的部分或相当于20%的欧洲市场销售或2015财政年营业额的11%左右，它的影响或许并没有我们预料中的那么大，而最赚钱的DIY业务则不受影响。

利好

• TPPA签署后，打开美国市场(免除美国8%的进口税)， 美国PrimeSource的订单又来了。
• 安全篱笆与石笼网需求庞大
• 年杪增产与进军物流业
• DIY业务不受影响 (越南的成本优势是中国厂商无法复制的)
• 进军物流业，耗资RM12.8mil在巴生港口地段建设仓库来增加被动收入，预计在6-9个月内竣工。
• 今年预计能够达到每股20分的盈利，40%股息政策 = 8分，DY = 5%。

利空

• 欧洲bulk purchase的部分销售额
• 马币走强对出口不利
• 中国厂家的竞争或许会导致欧洲市场的利润减少(单位数毛利，目前是15%左右)
• 中国厂家的价格未定前，买家按兵不动导致2-3月的销售减少。

总个来说，我认为这一次的利空或坏消息，或许是一个不错的投机机会。短期内公司的成长会受到一些负面影响，但长期而言应该是利多于弊。至少，落实了总比让投资者胡乱猜测而造成恐慌来得好。

资料连接：
欧盟撤销对华紧固件反倾销税官方文件
http://news.luosi.com/articles-9872.html

欧盟正式撤销中国紧固件反倾销税
http://news.luosi.com/articles-9866.html

转贴：Chin Well (MYR1.67): Anti-dumping repealing to affect ~10% 
We attended Chin Well’s 2QFY6/16 result and corporate update briefing today. The repealing of anti-dumping law in EU for fasteners from China (effective 26-Feb) may not be as bad as it seems.

In terms of numbers, only its bulk sales of bolts may be affected, which makes up 20% of EU sales, i.e. MYR56m (~11% of FY15 revenue). In the likely scenario of margin compression due to the need to match China’s pricing, management has guided for single digit margins. This division is enjoying ~15% PBT currently. If this halves to 7.5%, the estimated PBT reduction is MYR4.2m, i.e. less than 10% of FY15 PBT.

We also find comfort in (1) China’s labour cost increase; (2) part of the repealing involved a promise of being more environmentally friendly, lowering CO2 emissions and proper waste water treatment (Chin Well pays MYR0.6-0.7m every month); (3) China’s promise to cut 15% output over five years; (4) Failure of China manufacturers to stock up on wire-rod which saw prices shoot up 30% since January; (5) perception of inferior quality of China products; (6) most customers would source from various countries (as per past practice) for risk and cost hedging.

It is hard for China to penetrate the DIY market as it is labour intensive and there is usually a 1-year customer audit period. Cost wise, environmental cost increase could mean a levelled playing field for others vs China by 2020. Lastly, there will also be a time-lag of at least a few months before China’s threat materialises, due to the above mentioned factors.

Having said so, the fact is everyone is holding back big/bulk orders awaiting China players' pricing. Chin Well has only received small urgent orders during this period. 

Whilst it will be hard for Chin Well to repeat its 1HFY6/16 PATMI growth of 113% with the expected headwinds, management has shared two expansion plans.

It intends to invest ~USD400k for a gabion machine end-2016. Currently, its gabion and fences capacity are fully utilised. In 2Q, wire product revenue jumped 28.2% YoY as it secured more new projects in Malaysia and began regular supplies overseas. 

Chin Well is also looking to set up a recurring source of income. It has commenced construction of a new automatic warehouse in Port Klang for MYR12.8m, which will complete within 6-9 months. It plans to utilise 30-40% of the space, whilst renting the remaining out for storage of hardware related items. At 80% utilisation, management hopes for ~MYR2m p.a. contribution.

Separately, on the US side, it seems that the worst is over. Orders are coming in, though not consistently and not at previous levels. PrimeSource is Chin Well’s only customer in the US and the supplier of Home Depot. The PrimeSource takeover resulted in inventory rationalisation and order halts (due to over stocking previously) which affected Chin Well significantly.

The group’s balance sheet remains solid. It currently has a net-cash position of MYR71.4m.

As its stellar performance is not expected to continue into the 2H, we look at its 12M trailing EPS of 20.7sen (vs. annualised 1H EPS of 24.6sen). The stock is trading at 8.1x trailing EPS, which is below its 3-year historical average PER of 11.4x.