look for long term. The result will be more beautiful for next quarter. Lat mflour and its warrant to take rest before further moving up.Tom, do u agree?
According to press release about Mflour a few months back, the plant in Indonesia should be (hopefully) operating this quarter. I hope its performance in Indonesia will be good.
An upcoming ASEAN consumer play with flour business in Malaysia, Vietnam and Indonesia.
Project 2-year net profit CAGR of 20% on tumbling grain prices.
We fairly value the stock at MYR2.70 (15x FY15 PER).
Growth, yield, low valuation – all in one bag
Malayan Flour Mills Berhad (MFlour) has business operations in both flour production and poultry farming, with a strong market positioning. As a flour producer, it is Malaysia’s second largest and Vietnam’s biggest. In FY13 (Dec), Vietnam accounted for 26% of Group’s revenue and we expect its regional earnings to grow with its first flour mill in Indonesia commencing in 3Q14.
MFlour is a beneficiary of the falling grain prices. Grain prices have been on a free fall since May 2014 (wheat: -29% since May, corn: - 30% soybean: -16%) and the supply outlook is pointing towards sustainably low prices. With wheat making up 80-90% of its flour production cost and corn/soybean making up the bulk of its poultry cost, we expect margin expansion to boost its earnings.
We project a 2-year net profit CAGR of 20% on a 2-year revenue CAGR of 5% and margin improvement of 1.8-ppt in FY14-15 (from FY13). Trading at 11.4x FY15 basic EPS and 13.6x on a fully diluted basis, we think the valuation is undemanding, compared to its bigger cap peers (PPB Group: 17x, QL Resources: 21x). The stock also offers high net dividend yields of 4.3-4.8% at sustained FY13 54% DPR. We fairly value the stock at MYR2.70, based on 15x FY15 PER (on basic EPS). The stock is Shariah compliant.
If you look at the low volume traded, pretty obvious the ones with no holding power are letting go. I believe majority of mflour players are long term investors. Next wave will come once the small fishes are eaten up
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....
Sohai
692 posts
Posted by Sohai > 2014-08-24 05:59 | Report Abuse
Buy back...