One Good "Seng" Of Bursa Malaysia

The word "Seng" is an old famously used name amongst the Chinese people in the 1980 and 1990s. Many of my friends have their names ending as Boon Seng, Hock Seng, Beng Seng and many others. Therefore, it was very common to refer them as Ah Seng, and there are many Ah Sengs as today.

But there are also several "Sengs" in Bursa Malaysia. Notably the famous ones are the two Hap Seng, Keck Seng,  and to a lesser extend Tek Seng, Teo Seng and KKSeng.

Amongst these "Seng" group of companies, there is one very low profile company that have actually rewarded early-days investors with its share prices increasing several folds over the years.

It is consumer counter biscuit maker Hup Seng Industries Berhad.

Hup Seng produces various types of biscuits that are a favourite among Malaysians and even foreigners. Yes, I saw them buying the cream crackers at the supermarkets. The most popular ones must be its "Ping Pong" brand cream crackers biscuits. Why is their cream crackers biscuits so popular? It is crunchy, delicious and a nice aroma when one bites it slowly and munch it in the mouth. When you dip it into a hot beverage and eat it, one will feel a different nice and soft taste. Even my family is hooked by its unforgettable crunchy taste!

As proof of how popular their cream crackers biscuits is, there is even another biscuit maker from Johore packaging their cream crackers biscuits in a similar design in similar colours!

A few years ago, Hup Seng began to attract my attention when they began to advertise in The Star declaring dividends payment in a two column advertisement. And there were plenty of dividends announcement from time to time. In an interview with The Edge published on November 16, 2009, Datuk Kerk Choo Ting, then an operating director said Hup Seng would distribute a payout of "at least 60% of the annual profit after tax" with effect from the current financial year. Cash at that year stood at around RM40 million.

However as at end of 2012, cash in hand had ballooned to almost double at RM79 million, but the dividends payout was as spectacular as well. The last two years dividends payout exceeded more than 100 percent. (See chart).

So is Hup Seng still a good buy at this point with its share price at around  RM4.30. For dividends wise, it is. It paid out a total of 30sen in 2012 and that is a high 7.0% yield. Yet it was not even mentioned as one of the top ten dividends paying stocks in the latest July issue of Personal Money!

Another plus point is the management team running the company. It is quiet a closely related family business. The top 30 largest shareholders comprise of many of their own related family members.

Hup Seng had done well in its 1st Qtr 2013 earning 7.42sen. It will announce its 2nd Qtr in August and most probably followed by a good interim dividend payment.

As this is my first article sharing about my 20 years of experience in the stocks market, I hope you will enjoy reading it. Any feedback and sharing of ideas would be very much appreciated. My email is kassim123888@gmail.com

Note: The writer bought 3,000shares of Hup Seng on 8th December 2010 at rm1.89 and went on to receive a total dividends of RM1860.00 so far and is still happily keeping the shares until today.