- HUPSENG shares price enters a downward trend since Nov 2015.
- From technical analysis views, we should not hold HUPSENG counter for long-run investment.
- Only suitable for speculative investment in short term period.
- Due to EMA240 & EMA120 are above EMA20 & EMA 60, HUPSENG shares price is having a great selling pressure currently.
- RSI reflects Oversold level with dull status which might lead shares price to a lower level.
- Resistance R1: RM 0.950
- Support S1: RM 0.925
- We notices that HUPSENG shares price is quite expensive based on current earning.
- Example, if you invests RM1 in HUPSENG counter, it take 17.50 years to cover your capital.
- Latest earning growth for Y2018 in negative value and average earning growth in past 4 years at 5.15% which reflected it is a mature business modal.
b) Market Prospect Ratios
- Based on dividend payout per shares, we able to conclude HUPSENG managements are very kind to the investor.
- The dividend payout ratio is 111.73% and 107.91% in Y2018 and Y2017 respectively.
- However, if you are dividend investor, we don't suggest you hold HUPSENG in long run due to the depreciation of shares price is more than dividend payout in the past 4 years.
- We should profit taking at a higher level and buy back at a lower level based on technical analysis.
c) Profitability Ratio
- Total revenue increases in the past three years (Y2017: RM285.7M ; Y2018: RM299.7M ; Y2017: RM307.4M)
- Due to the higher cost of sales, it leads profit margin and gross margin ratio reduce steadily.
- It reflects that HAPSENG doesn't have competitive advantage position in selling pricing control.
- Higher cost in raw material (Wheat flour, oil based material and cartons) further reduce the profit margin and gross margin in the past 4 years.
- Higher in ROC by 24% majorly contributed by lower value in total account receivable by -RM5.36M and cash & short term investment by -RM3.51M in Y2018.
d) Efficiency Ratio
- From the efficiency ratio table, it shows HUPSENG management able to sustain their business effectiveness in the current scale.
- They don't have difficulty in sales collections and able to sustain sales conversion from raw material at 1.6 months in the past 4 years.
- Higher value in account receivable turnover ratio contributed by lower value in account receivable by -RM5.36M on YoY basis.
e) Liquidity & Solvency Ratio
- HUPSENG don't hold any financing borrowing (Long Term or short term) in the past 4 years.
- It reflected that HUPSENG able to generate operating income to cover all necessary expenses.
- There is no significant red flag for HUPSENG to meet short term or long term obligations.