Application scores and opinions

In the past three years, the revenue of the group's core products has increased year by year, which is about 56.4 million, 71.5 million and 82.6 million ringgit respectively, accounting for about 90% of the total revenue. However, due to the rising procurement costs of raw materials, coconut and white coconut meat, and the average selling price of low-fat coconut products fell by about 13.9%, the group's net profit in 2016 was 13.3 million ringgit, down slightly from 13.6 million ringgit in 2015. The group currently has two production plants with a total of four production lines. In the past three years, the output of coconut milk powder produced by the Thunderbolt factory was about 3959 metric tons, 4432 metric tons and 3261 metric tons respectively, with a utilization rate of 88%, 98% and 72%. The significant decline in production utilization in 2016 was due to sufficient inventories in 2015 to meet customer orders, a reduction in production and a temporary suspension of production due to an unexpected fire in February 2016. In terms of industry, Malaysia's coconut market is more integrated, with only 10 major manufacturers, of which the top five account for 73.6% of the market share. The group ranks second with a total market share of 18.1% in 2015 and first with a market share of 45.3% of coconut milk powder. Therefore, from the two aspects of scale and income, the group has a more obvious competitive advantage. However, due to the sensitivity of food manufacturers to cost changes and their high dependence on large customers, as well as the fact that the group sells most of its food to overseas customers and does not have a foreign exchange hedging policy, the group's profits are potentially volatile in the future. Based on the IPO price, the price-to-earnings ratio of the group is between 19.6 and 23.1 times. At present, the average price-to-earnings ratio of the food manufacturing industry listed on the Hong Kong Stock Exchange is about 22.8 times earnings, similar to the group's valuation. However, given the small market capitalization of the group, it is likely to cause speculation. To sum up, the company was given a "neutral" rating with a total score of 5.8.