Chin Hin Group Berhad is an integrated builders conglomerate that provides building materials and services to the construction and building industries.
HISTORY
In 1974, Datuk Seri Chiau Beng Teik took over his father’s hardware shop in Alor Setar, Kedah named “Chop Chin Hin”. Through hard work and perseverance, the group has evolved from a small hardware shop into one of the largest building material distributor in Malaysia. Chin Hin has expanded into the supply of ready mixed concrete in Malaysia. In 2009, Datuk Seri Chiau Beng Teik’s son, Chiau Haw Choon joined the management team. Under his administration, the group decided to expand into production of AAC block, steel mesh and metal roofing systems. After the group entered the market on 8 March 2016, he announced five acquisitions, respectively, a 18.55 acres of land in Bidor, a 51 acres of land in Kota Tinggi, Midah Industries Sdn Bhd (fire doors), Epic Diversity Sdn Bhd (lock business) and Mi Polymer Concrete Pipes Sdn Bhd.
MANAGEMENT TEAM
1) Datuk Seri Chiau Beng Teik - Deputy Group Executive Chairman. Have 69.72% direct and indirect interest (This data is until 31 March 2017, from annual report 2016)
2) Chiau Haw Choon - Group Managing Director. Have 60% indirect interest (This data is until 31 March 2017, from annual report 2016)
BUSINESS SECTORS
1) Distribution of Building Materials - One of the largest in the country with an annual turnover of exceeding RM 600 million. A wide variety of building materials include transportation and sales of cement, stone bricks, steel bar, planks, tiles, iron, toilet utensils and other building materials.
2) Supply of Ready Mix Concrete through multiple Points of Sales throughout the country
3) Manufacturing of Building / Construction Product
- Pre-cast Concrete Products
- Capacity increased to 300,000 metric tonnes in 2017 ( contribute starts in Q1 2017)
- Production capacity increase 45,000 precast concrete in Kota Tinggi (contribute starts in Q1 2018)
- By year end 2018, precast concrete should be able to produce around 60,000 metric tonne per annum in Kota Tinggi. G-Cast Concrete Sdn Bhd in Serendah’s production capacity increase from 60,000 mt per annum to 144,000 mt per annum by Q3 2018.
- Autoclaved Aerated Concrete (AAC) - AAC block should be the upcoming “star” products for Chin Hin. After few years of market education, many contractors have started to adopt Starken AAC as a substitute for traditional bricks and mortar.
- Production capacity increase 420,000 meter cube AAC in Kota Tinggi (contribute starts in Q1 2018)
- Wire Mesh Products
- This can increase the wire mesh’s capacity from 6,000 to 8,000 metric tonnes per month (contributes start in Q1 2017)
- Metal Roofing Systems
- Fire-rated door (Midah Industries Sdn Bhd)
- Capacity of 60,000 units of fire door per annum at Semenyih factory
- Door locks, miscellaneous architectural hardware accessories (Epic Diversiy Sdn Bhd)
- Concrete Piping (Mi Polymer Concrete Pipes Sdn Bhd)
- With 20,000 tonnes per annum currently running at 100% capacity in Batu Pahat
- Mi Polymer Concrete Pipes Sdn Bhd increase it’s production capacity from 40,000 mt per annum to 40,000 mt per annum. Complete by Q2 2018
- Solar Panels
- In FY 2016, Chin Hin was granted certification by the Sustainable Energy Development Authority of Malaysia with a total of 2,245MW Feed in Tariff. The Group has gross income of RM 2.14 million in FY 2016 from its electrical production capacity of 2,245 kWh. The Group currently hold an existing 21-year agreement whereby the company will deliver and sell to TNB.
*Expansion that going on
*Expansion through private placement
POINT ABOUT COMPANY
1) Construction industry still maintain its positive growth momentum. The Stimulus effect of the various infrastructure projects such as Tun Razak Exchange, Mass Rapid Transit Second Line “MRT2”, Light Rail Transit Line 3, Bandar Malaysia, Perumahan Rakyat 1 Malaysia (PR1MA) and the People’s Housing Programme (PPR)
2) Chin Hin adopted CRM solutions. CRM solutions is to manage customer orders and analyse and identify insights into an individual customer’s buying patterns. This will empower the group to better meet customer’s requirements by preparing orders in advance or by improving customised bunding options to meet their requirement. The CRM solutions was implemented in stages over the last quarter of FY 2016.
3) Chin Hin is optimistic on precast concrete order from the government since they are involved in the Langat Centralised Sewerage Treatment Plant (CSTP). The Government aims to increase the efficiency and production of water and sewerage services by expanding and upgrading such services particularly in the rural areas.
4) The management believes that the new acquisition will contribute significantly to the earning of the group in 2017. The management also mention that the profit margin for fire doors is high. With that, the profit margin for the trading segment will be increase.
5) Can go into Singapore’s market. The production line in Johor is interchangeable between AAC Block and wall panels. The wall panels is well established in overseas market, especially in Singapore. Singapore has accepted Starken’s wall panel for their government’s affordable housing project.
CONCLUSION
Chin Hin is now on going expanding stage. Chin Hin is also having fund raising through proposed private placement of up to 10% of the issued shares ( up to 50,588,800 new ordinary shares) in Chin Hin for expansion purpose.The fund will be utilised on expansion (mentioned above) (34%) , repayment of debt (39%) , working capital purposes (9%) , future expansion purpose (16%) and expenses for the private placement (2%). No. of shares after private placement will be 556,476,800 shares.
| Normal | After deducting one off revaluation surplus | After private placement | After private placement & after deducting one off revaluation surplus | |
| Net Profit | 47,843,000 | 34,073,000 | 47,843,000 | 34,073,000 |
| No. of shares | 505,888,000 | 505,888,000 | 556,476,800 | 556,476,800 |
| EPS (cents) | 9.46 | 6.74 | 8.6 | 6.12 |
| Price | 1.3 | 1.3 | 1.3 | 1.3 |
| P/E | 13.74 | 19.29 | 15.12 | 21.24 |
DISCLAIMER
Everything above is for sharing purpose only.
This is NOT a buy or sell call.
BUY OR SELL AT YOUR OWN RISK !!!
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