Revisiting YSP Sah

Revisiting YSP Sah

YSP Sah stands for Y.S.P. Southeast Asia Holding Berhad as the front page of its company annual report 2013 showed. Though I must admit that I do not know Y.S.P. stands for what? A famous blogger once put it as You Shall Pass for one of his blogs.

And I couldn't agree more than that. YSP Sah has indeed passed the great, great test as a consistent profitable company since the 3rd Qtr 2006. (This data is obtained from the website page of www.malaysiastock.biz.) If you include the latest 2nd Qtr 2014, there are a total of 32 consecutive quarters of profits! During these periods, we witnessed several world financial crisis that would have sent many companies reporting losses, albeit big or small.

YSP Sah must be in the right sector. According to its chairman, Datuk Dr. Anis  Bin Ahmad, Malaysia has been experiencing several years of 8-10 per cent annual growth in the pharmaceutical industry, which is reinforced by Frost & Sullivan as an industry worth US1.8 billion in 2013.

Furthermore, the Malaysian Government's Budget 2014 allocation for the health sector and the pharmaceutical subsector was RM2.28 billion, up 14.5 per cent from 2013. All this will inevitably cascade down to result in better uptake for the pharmaceutical subsector, such as YSP Sah.

One of its star performers in terms of sales growth was SunTen Traditional Chinese Medicine segment with a 23.1 per cent increase compared with 2012. Other segments also posted impressive gains resulting in pre-tax profit of RM22 million compared with RM20 million in 2012.

YSP Sah's profits come from its three major business segments i.e. Investment holding, Trading and Manufacturing. The Investment holding segment is measured by the dividend income received from its subsidiary. Pleased to say that so far, all these three segments have been holding on their own profits' levels.

All these years of consistent profits has allowed YSP Sah to gradually built up a sizable cash hoard of RM56 million vs borrowings of only RM11 million according to its latest 2nd Qtr 2014 report. Trade and other receivables is an impressive RM58 million vs Trade and other payables of only RM26 million.

YSP Sah reported a sterling set of results for its 1st Qtr 2014 ended March 31. It posted a 23% jump in net profit to RM5.45 million (eps of 4.1 sen) compared with RM4.4 million in the previous corresponding period. However, YSP Sah reported an eps of only 0.72 sen for its 2nd Qtr 2014 ended June. It was the lowest ever reported eps since the 3rd Qtr 2006!

The poor shocking results sent its share price spiralling from its RM1.80 plus to the current RM1.50 at the time of posting. Kassim can only assume that there are quick and super fast investors who would dump their shares immediately after a poor set of quarterly result. These type of investors do not want to wait for another poor set of consecutive quarterly results.

The YSP Sah of today is definitely different from the YSP Sah of yesterday. The slow and steady rise of its share price means that its Employees' Share Option Scheme ('Esos") offered to its employees is now priced higher than its previous. On Aug 1, 2014, YSP Sah announced it made an offer of options to seven of its directors and eligible employees. The Exercise price of options (2,000,000 "Esos") offered was RM1.49. On that day, YSP Sah was traded at RM1.62.

Although YSP Sah is no longer in the radar of analysis' coverage anymore, one could still not miss the company if one is a regular reader of The Edge and Focus Malaysia. YSP Sah was featured in The Edge issue dated June 2,2014 with a headline : YSP Sah continues slow and steady growth. Just recently, Focus Malaysia wrote about the company in the issue dated Aug 23, 2014 with the headline : YSP Sah sees improved results from product focus.

YSP Sah has continued to reward its loyal shareholders with a 6 sen dividend since 2006. Its dividend was further increased to 6.5 sen for 2012 and 2013. All these dividends were paid out despite the facts that YSP Sah's annual earnings per share during all those years is something not much to shout about.

Investors looking for fast growth will not find YSP Sah an appealing investment. In fact, YSP Sah is more suitable for those more conservative and contended (with regular dividends) types of investors willing to ride patiently with the company for the long haul.

Regular readers would have known that Kassim discovered YSP Sah by chance due to his spouse using one of its products due to her backpain problem. For those new readers, you can refer to my blog dated : August 9, 2013 : Customer-turned-Stake Holder of YSP Sah.

I was so confident of the company that I bought a 10,000 shares at between RM1.04 and RM1.05 on June 5, 2012. It has since turned out to be a good investment. Having received three years of dividends totalling RM1,900.00 (600.00 in 2012, 650.00 in 2013 and 650.00 in 2014), my investment cost is now only RM8,667.09 (Capital: RM10,567.09 minus Dividend: RM1,900.00). At the closing price of RM1.50 on Sept 15, Kassim is sitting on a good paper profit of RM6,100 plus or an impressive return of 58% for a holding period of more than three years.

Yes, Mr. YSH Sah, you have passed as far as Kassim is concerned.

Delloyd Ventures Berhad - Who is with me?

During my previous, I asked minorities of Delloyd Ventures Berhad to stay with me by not giving up the shares to the offerors at RM5.20.  So do you want to know how was the response?

I am most pleased to let you know that I have received tremendous response from many minorities to support my call. Many emailed to me to express their support and urged for unity so that the offerOr would be forced to offer an even higher price. A few even thanked me for taking the lead to try to unite the minorities to be united. How "orange-touch" my heart felt. In case you are wondering what is the meaning of "orange-touch", it is literally translated from the Hokkien dialect meaning "Kam-ton", it means the heart felt so touching!

Are you listening, Mr Offerors?

Well, the truth is nobody emailed to me regarding the above! I am just joking about with my above statement. But does this mean that minorities shareholders are not united? I do not have the answer. Only time will tell. At the time of posting on Sept 15, Delloyd shares traded at RM4.98.

I also take this opportunity to wish all Malaysians a Happy Malaysia Day!