For the Singapore stocks, I would like to recommend Jiutian (JIUTIAN, C8R.SI).
This is a China stock which listed in Singapore Exchange. Currently it is the 2nd largest demethylformamide (DMF)producer in China, with annual production of 150,000 tonnes.
DMF is largely used in the production of polyurethane (PU). PU is widely used in the produce consumer goods such as leather products, footwears, cushions and furniture. Besides, DMF is also a universal solvent in the petrochemical and textile industry, and can be used in the pharmaceutical industry for some antibiotics.
In fact, Jiutian produces all kind of methylamine (including monomethylamine, dimethylamine, and trimethylamine), sodium hydrosulfite, consumable carbon dioxide, etc.
With the DMF price increasing since covid crisis(2020) due to industry production shortage, Jiutian will be benefited from high average selling price, and thus, I believe the future prospect of Jiutian wil be very bright.
Financial wise, the cash flow of Jiutian has been improving because of strong profit margin and low capex needed. Analysts forecasted the strong cash flow will turn Jiutian from debt position to net cash position in FY2021.
In its 2021 annual report, Jiutian reported it nearly double its revenue and net profit to RMB2.17 billion and RMB325 million (FY2020: RMB1.15 billion and RMB174 million), while the Group net current assets increased more than double, from RMB251 million to RMB656 million, thus turn the group to a net cash position of about RMB700million.
After many years without dividends payment, Jiutian resumed the dividend payout in 2021, aiming to reward loyal shareholders and show confidence to the future strong and sustainable earning. The company declared two dividends in FY2021, a total of SGD0.0047 dividend per share. At the price of SGD0.08 to 0.10 per share, the dividend yield is around 4.7% to 5.88%.
Jiutian announced another sterling results at 4th of May 2022, that the 1st quarter revenue and net profit strongly increased to RMB772 million and RMB201 million, and the cash or cash equivalent was positioned at RMB1.02 billion (compared to the share numbers of 1.849 billion, it is about RMB0.54 per share). The first interim dividend was increased from SGD0.0035 per share last year to SGD0.0075 per share, which means more than the whole year dividend payout for FY2021(SGD0.0047).
Jiutians share price has been stability climbing up since Dec 2021 (SGD0.07) until last closed at SGD0.107(2022May19). With the robust results ongoing, I am targeting the price to cross SGD0.20 in coming 1-2 year and the dividend should continue increase, rewarding shareholders who aim to hold for a longer time.
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