The Hour Glass Limited

Presented by Team MBFC – Aug 2015

Andrew
Boon Heng
Dennis
Louis
Nobi
Raja

Special thanks to
Jeffrey
Disclaimer
 This presentation is NOT a
recommendation to buy or sell the below
mentioned stocks.
 MBFC are not licensed stock brokers or
advisers.
 This presentation is purely for research
and educational purposes.
 Please do your own research or contact a
licensed stock advisor before making any
investment decisions
Introduction
Store directory
Step 1a: Price on uptrend

 Price on short term uptrend

Step 1b: Price on uptrend

 Price on medium term uptrend

Step 2a: Consistent Increase in Sales,
Net Income And Cashflow

 Annual Sales, Net Income and Cash from

Operations on an uptrend.
Step 2b: Consistent Increase in
Sales, Net Income And Cashflow

 Quarterly sales, Net Income and

Cashflow on an uptrend
Step 3: Future Growth Rates

Consistent overseas expansion into other

markets.
Step 4: Sustainable Competitive
Advantage
Company Industry Sector
Gross Margin (TTM) 22.58% 49.15% 24.57%
Net Margin (TTM) 8.13% 5.65% 10.28%
ROE (TTM) 14.96% 12.45% 16.49%

 Net Profit Margin and ROE above that of

industry.
Step 5: ROE 12-15%

ROE (Reuters) 14.96%

ROE (Manual Calculation) 13.72%

 ROE above 12%.

Step 6: Intrinsic Value
 IV: $0.70 – assuming growth rate of 8.52%
(Sales Growth rate of last 5 years)
 Price currently above intrinsic value.
Step 6: Intrinsic Value
 IV: $0.82 – assuming growth rate of
11.85% (EPS Growth rate of last 5 years)
 Price currently above intrinsic value.
Step 7: Conservative Debt

 Company’s debt
is conservative.
Step 8: Healthy Cashflow

 Working Capital increasing mainly because of

increased in inventory.
 Step 8: Healthy Cashflow

 Cash conversion cycle is stable.

Constant Dividends
 Step 9: Insider Trades
Date Insider Action
10-Apr-2015 Vice Chairman of Board Bought 20,000 shares

 No other significant buy or sell trades by insiders.

Step 10: Risk Management
 Foreign Currency Risk – Currency exposures are
limited to AUD, HKD, USD, JYP, MYR, BAHT. The group net
investments in foreign operations are not hedged as they are
considered long term in nature.

 Liquidity Risk – The group exposure to liquidity risk is

minimal. As of 31 March 2015, the group has available cash and
cash equivalents totalling 98 million to finance its operations.

 Interest Rate Risk – Risk arises from its loans and

borrowings and its investment portfolio in fixed deposits. Rates are
in floating rates.
Summary
WA 10 Steps Status

Step 1: Price on uptrend 20,40,50,150 MA passed

Step 2: Increasing Sales, Income and Cashflow Passed!

Step 3: Growth Drivers Depends on Mkt condition

Step 4: Sustainable Competitive Advantage Passed!

Step 5: ROE greater than 12% Passed!

Step 6: Price below Intrinsic Value Failed.

Step 7: Conservative Debt Passed!

Step 8: Health Cashflow Passed!

Step 9: Insider Trades Passed!

Step 10: Risk Management Passed!

All stock presented by MBFC

 Hourglass 2012,
 Save 2013
 Expedia 2014