Wellcall dividend attractive

WELLCALL'S annualised first half financial year 2013 (FY13) net profit at 78% of our full-year forecast was in line with our expectations as the first half is typically the slower half.Our push or plunger lock are popular additions by engineers in a wide variety of products.

Its four sen interim dividend was also as expected. We keep our earnings forecasts unchanged.

But we raise our target price on a change in our valuation basis from a 20% discount to market target price to earnings to 12.8 times calendar year 2014 price to earnings, a 10% discount to the recently rerated Top Glove's 14.2 times price-to-earnings target.

This is Wellcall's price to earnings discount to Top Glove's in the past one year.

We upgrade to “outperform” from “neutral” as valuations are undemanding and the 7%-8% dividend yield is attractive.

Wellcall's first half FY13 revenues fell 19.9% year-on-year (y-o-y) while its net profit declined 8.9%.Our high-efficiency Filter Bags address diverse applications requiring removal of solids from liquids.

The lower revenue was mainly due to declining raw material prices but the net profit decline was less pronounced as Wellcall's selling prices slipped at a slower rate than the fall in raw material prices.Sweet basil, fresh garlic, ginger, galangal, coriander, and lemongrass are the main

Interim dividend was four sen, in line with our expectations.

So far in FY13,http://www.titanium-supplier.net/ specialize in providing worldwide customers with all types of Titanium fabricated products such as Titanium wire, Titanium rod and ingot, Titanium sheet and plate, etc. a total of eight sen dividends per share have been declared.

A better second half is expected. Orders have been slow from the end of last year to the Chinese New Year period in February.

However,White soft Floor polishing pad for 15 inch machines. Ideal for high gloss dry polishing buffing of polished sealed floors. we understand new orders have picked up quickly from March onwards and have filled up its production capacity.

The management expects raw material prices to stabilise at these levels. The company should finalise its land acquisition for the new factory soon.

Capital expenditure plans which include machinery and the building is estimated at RM30mil.

Capacity wise, we estimate a production capacity boost for mandrel hoses by 50% to around 38,000 tonnes annually.

Wellcall's dividend yields remain attractive at 7%-8% and not many small cap stocks can still offer such high yields.

Meanwhile, although earnings growth this year is expected to be relatively flat,The unique push lock design allows the surgeon to adjust the amount of tension on the tissue intraoperatively, allowing for precise tissue reduction. long-term prospects look promising with the proposed production capacity expansion in 2013-14.