WILSON & YORK

26/2/2014

Financial Year End

Report Period Ending
Reporting Quarter

31/12/2014
31/12/2014
4Q-2014

Recom m endation
Target Price (MYR)
Current Price (MYR)

BUY
2.28
1.80

Industry Group
Industry Sub Group

Food
Food-Misc/Diversified

Key Com pany Statistics

Bloomberg Ticker
Bursa Stock Code
Issued Capital (mn shares)
Market Capitalisation (MYR mn)
52 w eek High (MYR)
52 w eek Low (MYR)
Average Volume (3 month) 000
1 Yr Return (%)

COLA MK
7205
171.6
308.9
2.30
1.40
94.2
-10.7

Major Shareholders (%)

Leverage Success Sdn Bhd
Fraser & Neave Holdings Bhd
Liew Fook Meng

38.0
27.2
2.0

FTSE-BURSA INDEX MEMBERSHIP

FBMKLCI

FBM70

No

No

FBMEMAS FBMHIJRAH
Yes

No

MALAYSIA EQUITY
COCOALAND HOLDINGS BHD
RESULTS REPORT
YTD 4Q FY14 revenue rose 2.5% vs YTD 4Q FY13, led by rising exports. YTD 4Q FY14 net profits decreased by 0.6% vs YTD 4Q FY13.
YTD 4Q FY14 operating margins came in at 11.8% vs 11.5% in YTD 4Q
2013. We expect operating margins of 10-13% to prevail over the next
several quarters. Cocoaland is clawing back export business lost in
Thailand last year with strong growth in China/HK and Indonesia. Importantly, 2014 has seen a new sales record; quite an accomplishment.
However, broad economic growth in many of Cocoalands export markets seems to be softening, and sales growth rates may range between
10-12% p.a. rather than the 20-30% p.a. rate seen over 2011-2012.

INVESTMENT RISKS
Risks to our recommendation and target price include: i) rising trends in
material costs, ii) an increase in the general level of interest rates, and iii)
a sharp slowdown in the general level of economic activity in Malaysia
or in the economies of the companys major own brand export markets
- China/HK and the Middle East.

RECOMMENDATION
We maintain our BUY recommendation on Cocoaland Holdings Bhd, and
raise our fair value estimate to MYR 2.28. It is possible that the share
price will surprise on the upside; sales growth and capacity utilisation
may accelerate more quickly than we expect. Cocoaland has very little
debt on the balance sheet as well as plenty of cash.
Cocoaland has a clean balance sheet and a proven record of growing
export sales. Exports are likely to account for 64% or more of total
revenue by end 2015. In terms of own brand China/HK remains in the
top spot as the companys largest export market, followed by Indonesia
and the Middle East in importance. Management has been very diligent in
developing new markets that is more than compensating for OEM beverage business lost in the Thai market.

REPORT INDEX
Contents
Recommendation, Company Profile, Metrics
Quarterly Results, Competitor's Metrics
Analyst's Disclosure, Contact Details

Page
1
2
3

$3.10
$2.70
Share Price (MYR)
$1.90
$2.30

2-15

1-15

12-14

11-14

10-14

9-14

8-14

7-14

6-14

5-14

4-14

$1.50

3-14

Cocoaland Holdings Bhd is ranked approximately in the middle of the

thirty listed companies in the Malaysian snack food industry. The company is one of the few home grown Malaysian consumer firms that have
successfully penetrated regional markets. Cocoaland Holdings predecessor company, MFESB, was formed in 1980. This company and
others were consolidated and converted to a public limited company in
2000 under the name Cocoaland Holdings Bhd, prior to listing in 2005.

ANNUAL RESULTS AND METRICS (MYR mn)

SHARE PRICE LAST 12 MONTHS (MYR)

$1.10
2-14

COMPANY PROFILE

FY Dec
Revenue
Revenue g (%)
Net Profit
Net Profit g (%)

2013
254.4
14.0
22.1
3.9

2014
260.8
2.5
21.9
-0.6

2015F
287.5
10.3
26.6
21.4

2016F
318.2
10.7
29.4
10.6

Dividends
Ow ners' Equity
Total Liabilities
Debt/Equity (%)

10.7
207.6
44.5
21.4

11.2
218.3
43.3
19.8

10.7
234.2
46.0
19.6

10.7
252.9
48.8
19.3

12.8
1.4
16.7
1.8
10.6

12.8
1.0
12.0
1.2
10.0

15.5
1.1
11.6
1.3
11.4

17.1
1.0
10.5
1.2
11.6

EPS (sen)
P-S (x)
P-E (x)
P-BV (x)
ROE %

Copyright 2015, Wilson & York Global Advisers Sdn Bhd | See important disclosures at end of this report

Page 1 of 3

WILSON & YORK

26/2/2014

MALAYSIA EQUITY
COCOALAND HOLDINGS BHD
QUARTERLY RESULTS TABLE (All figures in MYR mn unless otherwise indicated)

FY Dec

4Q-14

4Q-13

Q-o-Q
%chg

YTD
FY14

YTD
FY13

Y-o-Y
%chg

Revenue
Operating Profit
Other Income
Share of Associates
Depreciation/Amort'n
Finance Costs
Pre Tax Profit
Tax
Minority Interest
Net Profit to S'holders
Dividends

72.7
13.1
1.5
0.0
-2.8
0.0
13.1
-3.2
0.0
9.8
8.6

66.9
10.1
0.5
0.0
-3.2
0.0
10.1
-2.2
0.0
8.0
8.6

8.5
29.1
>100
na
-12.9
na
29.1
na
na
23.6
0.0

260.8
30.6
2.5
0.0
-10.8
0.0
30.6
-8.7
0.0
21.9
11.2

254.4
29.3
3.7
0.0
-11.8
0.0
29.3
-7.2
0.0
22.1
10.7

2.5
4.7
-31.5
na
-8.7
na
4.7
na
na
-0.6
4.0

EPS (sen)
DPS (sen)
Operating Margin (%)
Net Margin (%)
Tax Rates (%)
NTA/share (RM)

5.7
5.0
18.0
13.6
24.6

4.6
5.0
15.1
11.9
21.3

23.6
0.0
18.9
13.9
15.5

12.8
6.5
11.8
8.4
28.5
1.27

12.8
6.3
11.5
8.7
24.7
1.21

-0.6
4.0
2.1
-3.0
15.4
5.2

Com m ents
Revenue increased 2.5 YTD 4Q FY14 vs.
YTD 4Q FY13 driven by strong grow th
in exports to China and Indonesia, the firm's
tw o largest markets.

Net Profit fell 0.6% YTD 4Q FY14 vs.

YTD 4Q FY13. The company is making fine
progress tow ards broadening its export
markets.
Operating margins have bottomed and
are starting to w iden again.
Tax rates still above statutory rates, but not
by much.

COMPETITORS METRICS (All figures in MYR mn unless otherwise indicated)

Current Year
Ending*

Cocoaland Apollo Food

Holdings
Holdings
Bhd
Bhd
Dec-15
Apr-15

London
Biscuits
Bhd
Jun-15

Revenue
Net Profit
Ow ners' Equity
Dividends

287.5
26.6
234.2
10.7

206.0
20.5
244.2
20.0

350.6
25.8
369.5
1.4

Market Cap
P-S (x)
P-E (x)
P-BV (x)
Div Yield (%)

308.9
1.1
11.6
1.3
3.5

345.6
1.7
16.8
1.4
5.8

112.2
0.3
4.4
0.3
1.2

9.3
11.4
40.3
10.3
12.0

10.0
8.4
97.5
-6.6
10.4

7.4
7.0
5.4
-2.6
86.1

Net Margins (%)

ROE (%)
Payout Ratio (%)
Sales Grow th (%)
Total Debt/Equity (%)

Copyright 2015, Wilson & York Global Advisers Sdn Bhd | See important disclosures at end of this report

Page 2 of 3

WILSON & YORK

26/2/2014

MALAYSIA EQUITY
COCOALAND HOLDINGS BHD
ANALYSTS DISCLOSURE

BUY: Share price may exceed 10% over the next 12 months
TRADING BUY: Share price may exceed 15% over the next 3 months, however longer-term outlook remains uncertain
HOLD: Share price may fall within the range of +/- 10% over the next 12 months
TAKE PROFIT: Target price has been attained. Look to accumulate at lower levels
SELL: Share price may fall by more than 10% over the next 12 months
NOT RATED (NR): Stock is not within regular research coverage
All research is based on materials compiled from data considered to be reliable at the time of writing. However, information and opinions
expressed are subject to change at short notice, and no part of this report is to be construed as an offer or solicitation of an offer to transact
any securities or financial instruments whether referred to herein or otherwise.
We do not accept any liability directly or indirectly that may arise from investment decision-making based on this report. The company, its
directors, officers, employees and/or connected persons may periodically hold an interest and/or underwriting commitments in the securities mentioned.

All Rights Reserved. No part of this publication may be used or re-produced without expressed permission from Wilson & York Global
Advisers Sdn Bhd.

J Charles Wilson
Head of Research

QUESTIONS?
CONTACT THE INVESTMENT ADVISER:
Wilson & York Global Advisers Sdn Bhd
Suite B-11-3A, Level 11, Block B, Plaza Mont Kiara
2, Jalan Kiara, Mont Kiara
50480 Kuala Lumpur
Malaysia
Tel: +603 6203 2280
Fax: +603 6203 2281
E-mail info@wygainvesments.com
Website: www.wygainvestments.com

Copyright 2015, Wilson & York Global Advisers Sdn Bhd | See important disclosures on this page.

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