WILSON & YORK

Financial Year End Reporting Period Ending Reporting Quarter Recom m endation Target Price (MYR) Current Price (MYR)
Industry Group Industry Sub Group

22/5/2013

31/12/2013 31/03/2013 1Q-2013 HOLD 0.18 0.15

Housew ares Housew ares

MALAYSIA EQUITY NI HSIN RESOURCES BHD RESULTS REPORT

YTD 1Q FY13 revenue rose 24.6% vs YTD 1Q FY12. Cookware sales in Japan and Malaysia rose strongly and now account for more than 74% of total cookware sales. Malaysia is now NHRs most important market offsetting slow growth in Taiwan and Singapore. Meanwhile NHR is making good progress in North America and China/HK. Convex mirror and clad metals sales also improved y-o-y. However, we expect broadly slower growth in all the major economies, and thus have turned more cautious on our outlook. NHR is making good progress in revenue growth, yet remains challenged by small margins; 1Q FY13 operating margins came in at 2.8%, well below 6.1% operating margins seen in 1Q FY12.

Key Com pany Statistics Bloomberg Ticker Bursa Stock Code Issued Capital (mn shares) Market Capitalisation (MYR mn) 52 w eek High (MYR) 52 w eek Low (MYR) Average Volume (3 month) 000 1 Yr Return (%) Major Shareholders (%) Hsiao Family Ng Shw u Ching Yiew Kiang Chong

NHR MK 7215 236.6 35.5 0.19 0.12 12.1 -14.3

INVESTMENT RISKS
Risks to our recommendation and target price include: i) increases in the MYR exchange rate, ii) rising promotional costs, iii) a sharp slowdown in the general level of economic activity in the economies of the companys trading partners, e.g. Japan, Taiwan, Singapore and South Korea, and iv) continued rises in stainless steel prices would be an additional concern.

RECOMMENDATION
Ni Hsin Resources Bhd continues to make good progress in its marketing efforts, relying more on its own efforts rather than other channels. In addition, management has put in place a number of initiatives that are likely to result in improved sales and higher factory utilisation. However, the global outlook appears to be weakening. We rate the shares a HOLD with a fair value of MYR 0.18. The companys up to date manufacturing assets alone are worth some MYR 0.15 per share. Thus there is not a great deal of downside for the shares at current levels. Though the balance sheet is clean, the company is struggling to lift margins, which are very thin for a manufacturng company. Should stainless steel prices come off, or capacity utilisation increase further in the quarters ahead, net margins could trend upwards towards levels of 3-5%.

59.1 0.3 0.0

FTSE-BURSA INDEX MEMBERSHIP

FBMKLCI No

FBM70 No

FBMEMAS FBMHIJRAH No No

REPORT INDEX

COMPANY PROFILE
Contents Recommendation, Company Profile, Metrics Analyst's Disclosure, Contact Details Page 1 2
Ni Hsin Resources Bhd (NHR) is one of the leading cookware manufacturers listed in Malaysia. The company has its roots in Taiwan, and was incorporated in Malaysia in 1989 and listed in 2005. About 62% of total cookware revenue is realised in Malaysia, with Japan and Taiwan accounting for the lions share of the companys substantial export revenue. Group YTD 1Q FY13 revenue comprised 61% cookware products, 11% convex mirrors, 27% clad metals and 1% other.

SHARE PRICE LAST 12 MONTHS (MYR)

$0.23

ANNUAL RESULTS AND METRICS (MYR mn)

FY Dec Revenue Revenue g (%) Net Profit Net Profit g (%) Dividends Paid Ow ners' Equity Total Liabilities Debt/Equity (%) EPS (sen) P-S (x) P-E (x) P-BV (x) ROE % 2011 39.3 9.6 -0.2 na 2.3 59.5 11.8 19.9 -0.1 0.7 na 0.5 -0.3 2012 49.9 26.9 0.9 na 0.0 60.4 12.8 21.3 0.4 0.7 38.5 0.5 1.4 2013F 61.5 23.1 1.1 23.0% 1.4 60.1 14.7 24.4 0.4 0.6 33.6 0.6 1.8 2014F 67.6 10.0 1.3 24.5% 1.4 60.0 14.9 24.8 0.6 0.5 27.0 0.6 2.2

$0.08 5-12

Share Price (MYR) $0.13 $0.18

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Copyright 2013, Wilson & York Global Advisers Sdn Bhd | See important disclosures at end of this report

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WILSON & YORK

22/5/2013

MALAYSIA EQUITY NI HSIN RESOURCES BHD ANALYSTS DISCLOSURE

BUY: Share price may exceed 10% over the next 12 months TRADING BUY: Share price may exceed 15% over the next 3 months, however longer-term outlook remains uncertain HOLD: Share price may fall within the range of +/- 10% over the next 12 months TAKE PROFIT: Target price has been attained. Look to accumulate at lower levels SELL: Share price may fall by more than 10% over the next 12 months NOT RATED (NR): Stock is not within regular research coverage All research is based on materials compiled from data considered to be reliable at the time of writing. However, information and opinions expressed are subject to change at short notice, and no part of this report is to be construed as an offer or solicitation of an offer to transact any securities or financial instruments whether referred to herein or otherwise. We do not accept any liability directly or indirectly that may arise from investment decision-making based on this report. The company, its directors, officers, employees and/or connected persons may periodically hold an interest and/or underwriting commitments in the securities mentioned.

All Rights Reserved. No part of this publication may be used or re-produced without expressed permission from Wilson & York Global Advisers Sdn Bhd.

J Charles Wilson Head of Research

QUESTIONS? CONTACT THE INVESTMENT ADVISER:

Wilson & York Global Advisers Sdn Bhd Suite B-11-3A, Level 11, Block B, Plaza Mont Kiara 2, Jalan Kiara, Mont Kiara 50480 Kuala Lumpur Malaysia Tel: +603 6203 2280 Fax: +603 6203 2281 E-mail info@wygainvesments.com Website: www.wygainvestments.com

Copyright 2013, Wilson & York Global Advisers Sdn Bhd | See important disclosures on this page.

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