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Results Note – Bonia Corp (ADD, downgrade) - A disappointing end to the year




Affin Hwang Investment Bank Bhd


10 Oct 2012





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Below expectations Bonia’s full year FY06/12 revenue surged by +25.6% yoy, boosted by: 1) revenue contribution of RM70.2m from Jeco, and; 2) organic revenue growth of +11.9% from the Bonia group). EBIT margin was relatively stable at 14.4% (FY06/11: 14.5%). However, the effective tax rate was higher-than-expected at 31.8% vs. 24.7% in FY06/11, due to certain non-tax deductible expenses. Consequently, FY06/12 headline net profit grew by a slower +4.6% yoy to RM41m. Excluding: 1) a provision for losses for its operations in Vietnam in 4QFY11 (RM5.4m), and; 2) net impact of a fair value adjustment on long term loan to an associate and impairment losses on investments in associates and investment properties in FY06/12 (RM10m), Bonia’s FY06/12 net profit had grown by a stronger +14.3% yoy to RM51m. Nevertheless, results were below expectations, accounting for only 89% of our and consensus full year estimates. The variation was largely due to weaker-than-expected margins and a higher effective tax rate. Bonia declared a final dividend of 4 sen/share, less tax, and a final tax-exempt DPS of 1 sen. This brings total net DPS to 4 sen/share (yield: 1.5%).

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