Systech’s revenue has grown by an average by a whopping 28% per annum since 2012. However, profit could not follow suit with average growth during the same period of only around 2%. This show that any revenue increased achieved by the company will be at the expense of its profit margin. In year 2012, the PAT margin was a high of 36%. In year 2018 it was only at 9.3%.
At the current share price, the company is valued at an extremely high PE of 40x. Given the profit growth rate of only 2%, the company can be considered highly overvalued.
MBMR is a direct proxy to Perodua via its 22.6% interest in the company. Valuation is cheap at only 6.6x PE based on FY18 profit of RM166mil. PB is low at only 0.7x BV.
FY19 should deliver another profit growth year to the company. Profit growth will again be driven by the performance of Perodua (via MBMR 22.6% holdings in Perodua) from the still strong sales of new Myvi, sales of SUV Aruz and the introduction of the newly revamp Alza sometime in the 2H19. Aruz which commands a higher margin compared to other models, will help improve the total profit margin of Perodua (which will flow to MBMR’s bottom line as well).
MBMR is expected to achieve a profit of RM200mil in 2019. At the current share price, the company is being valued at only 5.5x which is a lot lower than the industry average of 15x PE. As an example, UMW (another company with exposure to Perodua) is currently trading at a PE multiple of almost 20x.
This book is the result of the author's many years of experience and observation throughout his 26 years in the stockbroking industry. It was written for general public to learn to invest based on facts and not on fantasies or hearsay....
superb_1122
6 posts
Posted by superb_1122 > 2018-11-27 11:55 | Report Abuse
0.240 :(