KUALA LUMPUR: Listing-bound YX Precious Metals Bhd is expected to post net profits of RM8.0 million-RM11.1 million in financial years 2022-2024 (FY22-FY24), according to RHB Research.
This is assuming gold price at RM258 per gram for FY22 and normalising to RM239-RM240 per gram for FY23-FY24 (similar to FY21 level), with demand to remain intact through recovery of economic and social activities, supported by expansion of product range and operation facilities.
"As volume is the key to growth, we estimate FY21-FY24 volume CAGR (compounded annual growth rate) of 3.5 per cent, which we deem as encouraging, given the high base in FY21.
"This is premised on no significant delays caused by heightened movement restrictions, or disruptions in business operations," RHB Reseach said in a report today.
RHB Research said as at FY21, YX Precious' net gearing improved to 0.15 time from 0.23x in FY20, mainly due to higher retained earnings and lower interest bearing borrowings.
YX Precious is heading for a listing on Bursa Malaysia, an exercise which is expected to raise RM31.3 million for the purchase of new machinery and equipment, and raw materials, as well as the expansion and upgrading of operational facilities.
RHB Research said through the expansion of the hollow gold jewellery range and provision of refining and assaying services to external customers, YX Precious would have a complete range of services for its customers and grow market share
Post listing, the firm expects YX Precious to be in a net cash position from FY22, with FY22-FY24 return on equity at 10 per cent as earnings accumulate over time.
"With more automation and improved efficiency, we expect progressive improvement in FY22-24 margin of 3.1-3.8 per cent," RHB Research said.