consume of their food products regardless of a recession.The second reason is because the pricing power. Consumer industry is able to consistently increaseits revenue due to their ability to increase prices by passing down rising costs to customers. They areable to do this because of their strong brand equity among consumers. Even if they are priced slightlyhigher, consumers still choose based on their brand.Last but not least, the third reason why we choose consumer industry is because of a gooddividends. For Ajinomoto has a strong history of paying out of dividend. It has been paying out agrowing and consistent dividend since 2001. Meanwhile Dutch Lady has paid consistent dividendsdue to the highFree Cash Flow (FCF) they generate . Except for a one-off in 2008, dividends per sharehas been on an increasing trend.
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INDUSTRY : PROPERTYThe company we had chosen is Hunza Properties Berhad, KLCC Property Holdings Berhad and IOIProperties Group Berhad (IOIPG) .Hunza Properties Berhad operates in property development, investment, construction and leasing.KLCC Property Holdings Berhad one of the largest integrated real estate developments in the world.Other than that, IOI Properties Group Berhad (IOIPG) is renowned as one of the largest propertycompanies in the country with a proven track record spanning more than three decades in theproperty development industry.The main reason why we choose property industry is because real estate investments is an answer tothis stability as real estate can be a potential hedge against inflation as historically, rental rates andhome prices rise with inflation. Real estate investment can provide significant cash flows of between4% to 9% yield which is more tempting than the cash flow of equities.Real estate investment offers less liquidity as compared to equities. Real estate investments generallyrequire a long holding period.INDUSTRY : PLANTATIONS
Palm oil is one of the largest commodities in Malaysia. The reasons why we should buy this stockbecause KLK is despite decline in revenue and profit most of palm oil companies continue to receivepositive cash flow from operation. With positive operating cash flow, plantation companies able tofinance acquisition of new plantation estate. So this would enhance to bust profit margin. In 2015,Malaysia export 16.8 million MT of palm oil worth RM38.64 billion making in the 2ndlargest incomecontributor.Like most commodities, palm oil price also in cycle. There a several reasons why commodity price iscyclical in nature. The price of any product depends largely on the theory of supply and demandwhich also depends on other economic factors such as economic expansion, recession, interest rateand other factors, all of which are also cyclical in nature.
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