Kim Hin Industry Bhd

Two days ago, another company is selected into my "value stock portfolio".

Kim Hin is a company located at East Malaysia, mainly involve in manufacturing and sale of ceramic tiles. I bought it at the price of RM1.15 per share, which equals 88% of its net working capital.

other supporting reasons:

• zero debt.
• continuous profit for many years (one exception occur at 1998).
• uninterrupted dividend payment for more than 10 years.
• cash per share of about 53 sen. (base on its Mar-2008 quarterly report).

.

Special Item:

Under the list of its non-current assets, there is an "other investment" item worth about RM 67 million. (base on Kimhin's Mar-2008 quarterly-report)

According to the footnotes in the report, this "other investment" item is mainly made up of bonds, fixed income funds, structured products, etc. All of them are very low risk investment. And in my opinion, they can easily be converted into cash!

If we treat them as cash, then the total cash in Kimhin will become RM 1.0 per share. And if we include the value of these investment into its current asset, then the net working capital of Kimhin will be more than RM1.70 per share. That means my buy price of RM1.15 would be just about two third (67%) of its net working capital, (exactly the Graham's ratio).

.