Customer-turned-Stake Holder of YSP Sah

Customer-turned-Stakeholder

of YSP Sah.

Backache is common among us and is no exception for my spouse.

For several years, she experienced irritating back pain on the back now and then. A good friend introduced her to try on a capsule supplement formulated herbs traditionally used for relieving waist ache and backache, it is called Elgucare. The main pharmacological effects are dilating the blood vessels to improve blood circulation, restring the fibro-elastic potential of vertebral cartilages and improving immune system. She tried and after a period of time, her pain was gone. And so from time to time, whenever she felt some pain, I would go to the pharmacy to purchase Elgucare capsule again.

However early last year as I was doing some house cleaning, I chanced upon some Elgucare bottles and out of curiosity, read the label and discovered that it was distributed under the famous brand "Shine" by a company called YSP Southeast Asia Holding (YSP Sah).

That led me to start doing a research on the company. And what I found out interested me more and more. It was a simple profitable small company. It was a cash-rich company. It was consistently paying regular dividends year after years. And it was consistently making profits year after year including even at the peak of the US credit crunch crisis in 2008/09.

Most important, YSP Sah was only traded at only RM1.04 at a low PER at that time. At such a low price, the dividend of RM60.00 is almost a near 6%, much higher than the bank's fixed interest rate. How could I missed out such a good company for so long having been its regular customer (buying the Elgucare for my wife) for so many years?

Incidentally, YSP Sah shot into the attention of the investing public when it was mentioned in the hugely followed blog of SERIOUS INVESTING on May 22, 2013. The title was: "YSP: You Shall Pass?" SERIOUS INVESTING's Felicity gave some detailed account of the company and bought 7,500shares of YSP Sah at RM1.17.

Then on July 15, 2013, YSP Sah was again in the spotlight, this time The Edge publishing a more than half page article entitled: "YSP overlooked by investors". In that article, YSP Sah's president and group managing director Datuk Dr Lee Fang Hsin said the company was fortunate enough to go into the Indonesian market early when it opened up its pharmaceutical industry and allowed full foreign ownership. Soon after that, the Indonesian government closed the window of opportunity for the late comers. Indonesian is a much bigger market than Malaysia. Even Pharmaniaga is also entering the Indonesian market albeit a bit late. (But better be late than missing out this huge market opportunity).

YSH Sah is expanding its foothold in Asean. It has branches in Singapore, Vietnam, Myanmar, Cambodia and Indonesia and is now looking to expand by setting up new manufacturing plants in Indonesia and expanding its capacity in Vietnam. However, Malaysia still remains the key contributor. Although YSP Sah in still in a growth stage that requires capital investment, its dividend policy of 50% remains.

Going by its strong 1st Quarter 2013's results of eps of 3.34sen, a dividend of 6.5sen or 7sen is expected for investors next year.

The writer bought 10,000 shares of YSP Sah on June 5, 2012 at RM1.05. To date, he had received two dividends totaling RM1, 250.00 (RM600.00 on August 22, 2012 and RM650.00 on August 5, 2013). Currently the share price has appreciated to around RM1.40 at the time of writing.

Readers are welcome to share investing ideas and experience with me.

My email is kassim123888@gmail.com