• Current dividend yield of 5%. The stock is trading at 7.1x FY12 PE, while its dividend yield is maintained at 5%, representing a dividend payout of 36.1%.
Investment Highlights
• Increasing vehicle population in overseas markets. While operations in Singapore contribute 36% of FY12’s revenue, the group maintains their expansion plans in Malaysia, Thailand, India and South Africa. Total vehicle production in South Africa and India grew yoy by 12.8% and 10.7% respectively in 2011. The group will continue to expand their Southeast Asia (SEA) retail business through a partnership with B-Quik in Thailand to supply SSW wheels and other tyres. B-Quik provides vehicles maintenance services through its 100 retail stores. For Malaysia and South Africa, the aim is to increase sales in Falken tyres to dealers.
• Grow with its principals. The group is working with Sumitomo Rubber Industries to expand into new markets with good growth potential, and one of which could be India. The group may need to