YLI Holdings

My Dearest Doc,

Regarding YLI Holdings. I used to own this stock.


YLI Holdings, which specializes in ductile iron pipes and fittings, had a spectacular track record then. The company earnings growth was spectacular since 1997 and its net profit margins were impressive.




However things changed in fy 2004. The delay in water projects, coupled with higher cost of steel scraps and other raw materials hit the company.


On 26th Feb 2004, the company announced the following set of earnings. Quarterly rpt on consolidated results for the financial period ended 31/12/2003

The quarterly earnings disappointed me terribly. The delay in the water projects was the deciding factor for me to exit this wonderful investment. The business economics had indicated a change in the company's competitive advantage. With the delay in the water projects, for me, the company has lost its wonderful edge.





The above table showed how poor its poor 04 Q3 earnings was. Net profit margins slumped to a mere 14.04%. A year ago, its net profit margins were over 23%. And a net profit of only 2.849 million was terribly low compared to recent quarters.



That was then.

The above table showed how YLI has fared since.

In my opinion, the water projects issue remains an issue. So is the higher cost of steel scraps and other raw materials. The competitive edge that YLI had during 2000-2003 is gone.

Last fiscal year, saw some improvement from YLI where its net earnings increased from 12.8 mil to 14 million. Is this the start of YLI glory days? I am not sure.

Here is YLI's stock performance.

rgds