DKSH AGM 13 MAY 2026

Today I attend the AGM of DKSH Malaysia. I drive there after fetching my daughter to tuition center at around 0830. It took me almost 1 hour to reach the venue (Tropicana Golf Club, usual AGM venue for DKSH) via LDP, as the traffic at LDP is very congested...

I reach Tropicana Golf Club at around 0930. After registration, the counter staff gave me 2 meal vouchers (breakfast & lunch). You have to use these vouchers to claim for your meals later.

When I attended the AGM 2-3 years ago, I was given a goodie bag, with a box of Ferrero Roche chocolate, a tub of Buttercup, etc. inside the bag. No door gift is given on this year though, kinda disappointed haha. I have agreed to treat my daughters a few Ferrero Roche chocolate balls. It looks like they would be disappointed tonight..

The breakfast is, as usual, nasi lemak. Taste so-so.. I discarded the carrot cake coz. it is very sweet. Drinks such as lemon water, etc. are served as well. I didn't take them though because I bring my own water.

At 10 AM sharp, the meeting begins. The chairman is a Korean, Mr. Oh. He speaks fluent English with American assent. The executive director (CEO?) and CFO are Indians., and they are accompanied by a few non-executive directors on the stage.

If you follow the company closely, you would notice that DKSH did very well in FY 2025. I did not prepare any questions to the Board coz. the company's business is growing. Plus, my shareholding in DKSH is quite small after disposing most of my DKSH shares after the take-over announcement is made (foreseeing that the bid would fail as Pangolin has publicly rejected the offer). As expected, the take-over bid is a failure after minority shareholders rejected the offer during the EGM held a month ago.

Coming to the 1st agenda of the AGM, i.e. the financial statement of DKSH. 

The war begins.....

The first question was given by a representative from Pangolin Fund. I guess he is James Hay, the Director of Pangolin Fund. He pointed out why the Management decided not to pay dividend for FY 2025, although the financial numbers look promising. In fact, this was my concern too as already mentioned in my previous post in DKSH. After knowing that DKSH decided NOT to pay dividend for FY 2025, I further trimmed my shareholdings in DKSH immediately. But, for a big fund like Pangolin, it is quite difficult for them to sell their shares in open market just like me.. When your fund grows bigger, I start to realize that it is NOT easy at all to manage the fund, especially if the fund is used to invest in undervalued but out-of-favor stocks such as DKSH. Therefore, I am quite surprised that Pangolin Fund has invested in DKSH although its liquidity is rather limited. Nevertheless, I respect James, as he is truly a value investor, unlike those fund managers that like to chase hot themes.

Soon after James posted his questions, other shareholders started to post a similar question again to the Board. Overall, the main concern of the shareholder is about why the dividend is not given to shareholders although the company did very well last year. Free cash flow is positive, growing profit, good ROE, etc... all these should lead to higher dividend being paid out!! Instead, the Management decided not to pay dividend.. What on earth is happening? Their reasons given are the company wants to use the cash to reduce debt, to serve as working capital in future expansion activities, to cope with the current uneven market condition (due to Iran war), etc.... However, we do note that DKSH is operating in a high gearing mode all this while, and DKSH is able to weather through the even more challenging crisis such as COVID-19, why only now DKSH decided to sacrifice the dividends to reduce their debt? A 70-year-old shareholder compared DKSH vs Nestle, saying that Nestle is giving out most of its profits as dividends, unlike DKSH. To be fair, I think the shareholder should not use Nestle as an example coz. the business models of Nestle and DKSH are different. Instead, another FMCG distributor such as HARISON is more suitable, and HARISON is able to pay dividend to shareholders consistently.

At least 3 shareholders bombarded the Board from the floor just now about the dividend issue, citing the fact that the Executive Director has enjoyed a pay rise, but nothing is given back to the shareholder. In fact, I agree with the shareholder as well. Before that, I tend to emphasize on buying undervalued listed  companies in Malaysia as long as their profit growth in on track, regardless of whether they are paying dividends or not. I noticed that if those companies are in technological sector (or in other hot sectors such as Renewal Energy, solar, etc.), they would still be able to attract tremendous buying interest from the public (hence shareholders can enjoy capital gain, no dividend though). However, if those companies are in non-sexy (or traditional sector), sorry to say, public would tend to abandon those counters, unless the dividend is great. This could explain why DKSH share price is so cheap even though the company is growing. The answer is, obviously, subpar dividend being distributed to shareholder. Worse still, no dividend is declared for FY 2025 due to the somewhat unacceptable reasons given by the Board.

Anyway, as minor shareholders, we have no say on the Board's decision. We have to accept it reluctantly though. However, we do have many other investment choices. If the claim made by one of the shareholders, i.e. the dividend is NOT paid because the largest DKSH shareholder intends to punish the minor shareholders for rejecting the take-over bid so that the share price is depressed and hence they could buy back more shares via the 3rd party, is true, then I would be very disappointed on the Company. I am not sure whether it is classified as market manipulation? Have to find out..

For the time being, I will just keep my existing DKSH shareholding, and eyeing other undervalued counters that are abandoned by the market.

After voting, I took my lunch box and leave around 12 PM. 

It is Spaghettis.... 

SKB Shutters

I commute using MRT to work since 2024.

Today, as usual, I go to MRT Jinjang Station as I need to work in my office near Kajang today. I reach the station quite early. As I am so bored there, I spend time wandering around the station, and I see this:

Baby changing room

There are plenty of fire-rated doors made by SKB around the MRT Jinjang station, including the staff room (customer service) room door, telecommunication riser room door, hose riser room door, fire exit doors and many others. Pls see below.

Fire Exit

AFC Equipment (for auto-ticketing gate control)

Telecommunication riser 

Customer Service Room

Hose Reel and Dry Riser

Surau

Retail shop

System riser

At MRT Kajang station, I saw the SKB-made roller shutter near a warung makan (next to KTM Kajang entrance). My daughter likes to purchase sweet corn from this warung when she follows me to my office. This roller shutter is located between the walkway from carpark to KTM Kajang (see below). By the way, KTM Kajang entrance is just next to MRT Kajang exit.

In fact, I have purchased small quantities of shares of SKB Shutters (SKBSHUT) last year (2 Oct 2025) around RM 0.9+ when it reported a record high Q4 FY2025 profit. Its PER during that time is < 10, and I believe this company should be sold at the level of 10x PER at least, considering its dividend yield of almost 7%. However, after I purchased the shares, the share price plummets, lol... 

Am I making a wrong investment decision?

Let us analyze this company fundamentally.

Business background

SKBSHUT is focusing on manufacturing fire-rated doors, metal doors (for data center, which drives high margin, 35% of revenue), racking system (20% - 23% of total revenue), roller shutters (35% of revenue), etc. The boss of this company, Mr. Sin, is a mechanical engineer graduated from Taiwan. He is a very innovative engineer and entrepreneur, holding many patents for his design of roller shutter and steel-related products.

SKBSHUT will soon operate in a new, larger factory in Puncak Alam. The company has allocated huge capex for this purpose in FY2025, see below:

I have found the fire doors made by this company in various MRT stations, including MRT Jinjang, MRT Kajang, Ikano Power Center. According to the Management, "the metal door in data center could drive even higher margin as these doors are quite special and need to follow certain specifications/requirements. According to the Management, there are several notable competitors in the region, including those from Germany, China, and Malaysia. Locally, while there are a handful of competitors, SKB is currently the largest in terms of scale." --> Quoted from the MoM FY2025

I believe the moat of this company is that it is able to produce products that can meet stringent safety and regulatory requirements. Mr. Sin is a forward looking entrepreneur (and capable engineer) and able to design products to cater for future needs. As quoted from their MoM 2025:

"Innovation is the key driver of SKB’s growth. A strong example is the Insulated Fire Shutter. Even before it was made compulsory, SKB had already undertaken nearly five years of R&D. It took time for the product to be tested and certified, but when the market eventually mandated its use, SKB was wellpositioned as a first mover with a competitive advantage."

"SKB was the first in the market to achieve an Insulated Fire Shutter, tested to provide four hours thermal insulation and four hours fire integrity in 2015. That year, SKB had already introduced the product to the market, which later proved advantageous when authorities made it compulsory. Since then, the market has had the option to choose between Uninsulated and Insulated Fire Shutters. In 2021, Insulated Fire Shutter became a mandatory requirement, and this was reflected positively in the Company’s financial results."

Financial background

Let us examine the financial aspect of this company.

By looking at the historical record of its profit trend, undoubtedly, it is a growing company. Except in FY 2020, the net profit has been increasing consistently especially from FY 2023 onwards. The most notable growth is in FY2025 as the company has recorded the highest profit margin of around 19% as SKB had a higher concentration of high-margin products in FY 2025.

I believe the main raw material of SKBSHUT is steel. So, the steel price is plotted in tandem with the gross profit margin. In general, the gross profit margin of SKBSHUT is quite consistent at the level of 20%-25% even during the surge of steel price in year 2021-2022. The recent gross profit margin surges to almost 40% as the steel price normalizes after its peak in 2021.

It is appealing to note that its ROE has been uptrending since FY 2017, and the company has achieved ROE of more than 12% since 2023.

The company has been generating positive operating cash flow since FY 2017, which is a good sign. However, huge capex are incurred in both FY 2017 and FY 2025. In FY 2017, the capex is allocated for the acquisition of land of the existing office and factory at Kota Damansara. In FY 2025, however, the capex is mainly for constructing the new plant in Puncak Alam which is expected to be ready between June-September 2026 (from the Minutes of Meeting 2025 AGM). The new plant is estimated to provide between 50% and 60% more than the current facility.

Despite huge capex in FY 2025, the company is able to generate free cash flow (FCF) per share of RM 0.07. In the same financial year, it has declared its dividend of RM 0.065.

Valuation

Despite its strong balance sheet and good business prospect, it is trading at single digit PER multiple. Have a look on the PER trend of SKBSHUT below. 

The reasons that I could think of are:

(1) Low liquidity: Most fund managers would avoid investing in company with low liquidity. Nevertheless, from its Annual Report 2025, there are a few funds that have invested in SKB, e.g. 

EPF (2.9 %), 

MANULIFE INVESTMENT SHARIAH PROGRESS PLUS FUND (0.326%), 

MANULIFE FLEXI INVEST FUND (0.254 %),  

PHEIM EMERGING COMPANIES BALANCED FUND (0.241 %). 

I believe these funds are holding the company for long-term. There are 73% of shares currently held by top 30 shareholders. 

(2) Inconsistent dividend payout: Currently, I guess the Management has been focusing on allocating budgets for running the new plant more than paying dividends to shareholders. The management did not declare any dividend in the most recent Q2 FY2026 quarter despite achieving good profit (unlike during Q2 FY2025 where 4 cents dividend was declared). A closer look into Q2 FY2026 reveals that the company FCF is negative currently because a huge capex of RM 26 M was allocated. Therefore, it is justified that no dividend is declared. I personally do not wish to see that a company borrows to pay dividend just to "please" the shareholders.

(3) Cyclic business (somewhat): Its end customers are mainly from construction sector, a cyclical industry.

If we simply take the most recent 5 year median/mean PER of SKB, it gives us the number 6.3. Multiplied 6.3 by the trailing 4Q EPS of RM 0.16, it gives us the fair value of SKB at RM 1.0 roughly.

For me, such a low PE multiple of 6.3 is really unjustified for such a solid and growing company (for me). There are many companies out there that are financially weaker than SKB and yet they are traded at significantly high PER just because of they are operating in a "hot and sexy" segment. But what to do, this is share market, short-term traders outnumbers long-term investors by a huge margin. Those short term traders would "vote" for those hot counters definitely as they could earn fast money within days.

As a conclusion, I do hope that the Management will reward shareholders once more profit is made by the company in the future. When that time comes, the Market would rerate this company at a higher PER.

Q4 FY2026

 AEONCR had announced its quarter report Q4 FY2026 a few weeks ago, as below:

Not bad in general, revenue grows y-o-y, net profit grows y-o-y, and most importantly, dividend grows y-o-y as well.

As an investor of this company, I would like to find out why AEONCR performs so well this quarter. I have compiled the quarterly financial data of AEONCR as below. 

I believe the good profit of Q4 FY2026 is due to the reversal of impairment loss of + RM72M (vs - RM 14 M in Q4 FY 2025). From AEONCR presentation slide, they said that "Impairment loss reversal in Q4 was mainly attributed a one-off adjustment of RM131 mil arising from the restaging of AKPK provisions from stage 3 to stage 2, offset by receivables movement of RM129 mil and ECL refresh of RM27 mil respectively".

From what I have gathered from Google AI (plus some guesses), AEONCR needs to set aside some "allowances" of impairment loss for 3 different loan stages. I guess these stages are D0, D1, D2.... DN. where N  could be number of months passed. D3 is the most critical one, which it will be classified as D3+ (Non-Performing Loan) if the loan is not settled by the customer. For these different stages, AEONCR will set aside more allowances if the loan is moved from D2 to D3. During Q4 FY2026, somehow, there is a restaging from D3 to D2, so AEONCR is allowed to write-back the previous allowances made. Note that it is only one-off.

I have also highlighted the D0, D1 and D2 collection ratio. Apparently, the Management has ramped up its effort to increase the collection ratio, which is a good sign.

In fact, AEONCR business is growing.... This can be proven from its fast-growing gross financing receivable (loans approved) yearly. However, there are several factors affecting its profit growth in recent years, especially after COVID. I will list them below

(1) Non-Performing Loan (NPL)% at relatively high level. The loan is classified as NPL when the loan is classified as D3+ (already past 3 months but not paid back to AEONCR?). After COVID, it seems that the NPL is higher than that before. This is likely due to the higher living cost and inflation. Note that the customer base of AEONCR is mainly from B40, so they would definitely feel the pinch during inflation.

In fact, the Management has been consistently mentioning that write-offs are mainly from young age (<25 years) and lower-income customers, affected by rising cost-of living pressures. Several mitigation plans have been implemented, here are what I have observed (extracted from their presentation slide):

• Superbike Financing growth of 51.2% YoY, reflecting a shift towards higher-score customers and premium product 
• Payment Business targeting the middle-income group, coupled with the new card launches, lifted receivable by 16.5% YoY, increasing portfolio share to 7.1% 
• Personal Financing recorded marginal QoQ growth due to credit refinement on young age and low-income group 
• Continued focus on digital onboarding adoption and  strengthening asset quality

All in all, the company wishes to lend monies to personnel with higher credit scoresM40 or above). However, from my opinion, this means AEONCR will likely to face more competitors in this market segment.

(2) Loss from AEON Bank. AEONCR owns 50% of AEON Bank, which is a new digital bank in Malaysia. In FY 2026, AEONCR has recorded RM 85M loss from AEON Bank alone (vs RM 68M in last year). Hopefully the loss has peaked in FY 2026.

Valuation

There is a strong correlation between Price to Book Ratio and ROE, as shown below.

The ROE of AEONCR has been downtrending since FY 2014. So, investors would pay less premium to this company. At the time of writing, the company is traded slightly below its book value of RM 6.

On the historical PER of AEONCR below, it seems that AEONCR is traded at single digit PER since FY 2023, which I think is due to the lumpy earnings reported. It is currently (7 May 2026) traded at historically low PER regime.

Smooth sailing for AEONCR in future quarters!

Sodium level in AJINOMOTO

I am shopping for groceries in Lotus Kepong today with my family today. 

It has become my habit that I will visit the display rack of MSG as AJINOMOTO is in my share portfolio.

There are many MSG brands in the market nowadays. Here is the list that I could find from Lotus:

(1) BESTARI (RM 10.99/kg)

(2) LOTUS (RM 10.99/kg)

(3) AJINOMOTO (RM 13.95/kg)

(4) VEPLUS (owns AJI-NORIKI MSG) (RM 11.25/kg)

(5) FAIZA (RM 6.35/500 g)

Clearly, AJINOMOTO is the most expensive out of all MSG brands displayed. 

I managed to capture the nutrition facts of these MSG brands as well:

(1) AJINOMOTO

(2) AJI-NORIKI

(3) FAIZA (same nutritious contents as AJI-NORIKI :-P)

One of the key ingredients that I am focusing on is the "Sodium/Natrium" level, which is known to causing hypertension if consumed excessively. 

For each 100g of the product, the "Sodium/Natrium" contents for different brands are:

AJINOMOTO    : 9794.5 mg

AJI-NORIKI        : 12300 mg

Faiza                    : 12300 mg

Interestingly, AJINOMOTO contains the least amount of sodium compared to other brands.

And, it is quite surprising to note that both AJI-NORIKI and Faiza has the same nutritious contents :-))

For other brands like Lotus and Bestari, I could not find the nutrition facts.

How about the sodium content for salt? It is

Salt                    : 39000 mg (3x-4x higher than MSGs!!)

The other interesting fact that I have found out is that out of 100g of AJINOMOTO, the protein content is 45.2g. No protein is found in other brands like AJI-NORIKI and Faiza. I am not sure why there is such a big difference. They are MSGs after all right?? It could be due to how they define "protein" during the measurement process.

From a survey from Internet, high sodium intake could lead to (https://www.heartwest.com.au/high-sodium-levels-warning/):

(1) High blood pressure

(2) Increased thirst

(3) Headache

(4) Fatigue, etc.

My wife always complaint after eating out, she would feel drowsy, headache and thirsty. Maybe she has consumed too much sodium. I experienced the same syndrome as well.

Less sodium, less salt, and stay healthy.

DKSH - no dividends for FY 2025?

As expected, DKSH privatization offer was rejected by minor shareholders. The share price reverses as some short-term investors might have sold their shares.

DKSH has made a handsome net profit in FY2025, and generated a positive Free Cash Flow as well. Unfortunately, DKSH has decided NOT to pay dividends for FY2025, as they will use the cash to settle the short-term debt and to confront with the possible business uncertainty due to Iran war.

Well, I am quite disappointed with the decision made by the Board. After all, a value investor like me depends on dividends to live right? Therefore, I have sold some of my shareholdings in this company and shift the monies to other companies that pay higher dividends.

Hopefully the Management would make good use of the cash preserved and grow the business further.