Yee Lee targets at least 10% growth in revenue 2016 Yee Lee , Edible Oils , Red Bull , Consumer , Spritzer YEE Lee Corp Bhd’s performance is moving a notch higher. The diversified consumer company expects to sustain the momentum that was achieved last year into the financial year 2016 ending December (FY16). "For the FY16, we are targeting a growth of at least 10% in revenue. Of course we will aim to achieve more than that,” executive director Francis Chok tells StarBizWeek, implying that this 10% is a conservative target. Chok says that FY15 saw a strong leap in growth compared with the previous year. "We feel the consumer market should be fine this year. Last year we recorded a very much improved financial results,” he says. Local consumers suffered a strong setback following weak sentiment after the introduction of the goods and services tax, the weakened economic outlook with the fall in oil prices and the severely battered ringgit last year. However, in hindsight analysts note that people continued to buy essential daily necessities including food and clothes in spite of the economic climate and this may explain why companies including Yee Lee kept growing. Yee Lee recorded 18.1% year-on-year (y-o-y) rise in bottomline growth to RM31.91mil in FY15 with revenue also rising by 15.8% y-o-y to RM799.2mil. Notwithstanding the conservative outlook, UOBKayHian Research in a report earlier in the week said it is upbeat on Yee Lee’s prospects and is estimating a 33% y-o-y net profit growth in FY16. UOBKayHian maintained its buy call on Yee Lee with a target price of RM2.70. "We think that for the first quarter of FY16, we can at least maintain what we achieved in the previous quarter,” Chok says. The company saw its fourth quarter of FY15’s profit jump more than two times y-o-y to RM10.9mil with revenue also rising 42.9% y-o-y. The company has an array of brands which it either exclusively distributes or manufactures. Yee Lee manufactures the Red Eagle cooking oil, and its in-house Sabah Tea brand while it exclusively distributes the Campbell and Red Bull brands in Malaysia. It is also a 32.5% stake in Spritzer Bhd to which it intends to sustain at this shareholding level. "We will not increase our stake in this associate company as we would like it to remain this way as it is also a listed entity. Its contribution is also growing,” Chok says. The company which also has a plant manufacturing aerosol cans in Vietnam is bullish on its business prospects. "Vietnam has a big population of close to 100 million. Our products are also targeting the Myanmar and Cambodian market. We make these aerosol cans that are sold to companies to be used commercially, we do not have our own brand,” he says. "Yee Lee will allocate a part of its RM10mil capital expenditures (capex) to increase the capacity of its aerosol can division," Chok says. "In our RM10mil capex plans we have also included allocations to the trading division to build a warehouse on a piece of land we own in Kelantan. Works have begun on this warehouse and expenditures will also likely be incurred in the following year,” he says. Chok says the warehouse will be externally-funded. "We have debt headroom at a 6% and we will borrow further,” Chok says. Its receivables as of Dec 31 is mainly funded externally while investment into assets grew to RM841mil from RM588 a year ago (or RM2.84 net tangible assets per share against RM1.95). On dividends, Chok says the company has no official dividend policy but notes that it consistently pays dividends to shareholders every year. Boost from key brands Its trading division have steadily grown and had in the second half of last year received a boost after it became the exclusive distributor for Thai-made Red Bull drinks. This Red-Bull contract which it secured in August 2015 could boost its trading division even further this year. "Management shared that Yee Lee recorded RM60mil sales from Red Bull products against total trading sales of RM314mil in the second half of FY15. "It is optimistic on this prospects, highlighting that it has not reached the normalised sales as of end-2015,” UOBKH notes in its report. It says that the company is upbeat about achieving at least RM250mil in sales in FY16. The company also appears to be shielded from any possible rise in operating costs from raw materials should prices rise.