JKSB: Full Year Highlights: Dipped Products PLC (DIPD): FY19
Dipped Products PLC (DIPD) is one of the global leaders in protective wear which serves close to 5% of the global demand for natural, synthetic and latex based household and industrial gloves. The company broadly operates under the hand protection and plantations segments which concluded a successful financial year with group turnover increasing to Rs. 30,089mn (+6% YoY). The plantation segment grew by 4% during the year through strong contributions from its subsidiaries Kelani Valley Plantations PLC and Talawakelle Tea Estates PLC which operates in more than 50 estates across 5 districts. Growth in earnings was mainly driven by strong growth in profitability of the hand protection segment (+90.13% YoY) resulting from continuous focus on cost reduction through a comprehensive use of productivity enhancement mechanisms.
We currently project DIPD’s full year FY20E earnings to reach Rs. 1,100mn supported by strong pipeline of orders alongside continuous customer acquisitions and new product development in the hand protection segment. We expect tea price to recover towards the latter part of 2019 owing to improvements in oil prices and weather conditions to drive earnings during FY20E. At the current price of Rs.79.90 DIPD trades at an FY20E P/E of 4.30x which is at a discount to the manufacturing sector in our coverage universe.
•JKSB is one of 15 founding members of the Colombo Stock Exchange with roots in share trading dating back to 1896, and is a subsidiary of John Keells Holdings PLC (JKH), the largest listed entity on the Colombo Stock Exchange with a market capitalization of US$ 1.3bn.
•JKSB’s core client base is Foreign Institutional Investors, Local Institutions and HNWI’s
•JKSB has a co-branded Research tie up with CIMB and a Research Referral agreement with Credit Suisse, along with trade execution relationships with several other global and regional securities firms.
•JKSB’s trade execution partners include Credit Suisse, CIMB, Merrill Lynch, Exotix, Daiwa, Convergex, Deutsche Asia Securities and Morgan Stanley
•JKSB is a research contributor to Bloomberg on ‘KEEL’
•The JKSB Research Universe covers 72 stocks across 15 sectors, with most Research efforts focused on approximately 45 of the more liquid counters.
•The JKSB Universe constitutes 67% of total market cap and approximately 80% of turnover at the CSE.
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