Ornapaper is 1 of the top 5 corrugated box manufacturers in Msia. To date, raw material prices (paper roll) has dropped to 52 week low. This will translate into higher margin and profit. EPS has improved since q1. Q1: 2.85, Q2: 3.15, Q3: 4.64. Q4 should be better with lower material price and higher consumer spending, esp from e commerce spending (11.11 and 12.12).
It has stable customer in Julie's biscuit as both has the same owner. And Julie's biscuit targets up to 20% growth in 2020. This will benefit ornapaper as well
Oji is 1 of the largest competitors in malaysia for corrugated box and paper. Many years back they bought a company called HPI at the cost of rm 250 million. At that time HPI has 5 factories for corrugated box and 1 paper mill, about similar size as orna. Now orna market cap only valued at 80 million. It deserves much higher valuation
Looking forward Q4 result. Among the peers, it is the cheapest with PE of 7, compared to industrial average PE of 10. Current share price provides good opportunity to accumulate with good safety margin and plenty of room for share appreciation. Cold eye has 1500k shares in it, bought at around current share price
Orna's current PE is 7.6. Master is 11 and PPHB is 10. The ppl who manage Master are not the substantial shareholders, Yayasan Bumiputera Pulau Pinang is d substantial shareholder. I prefer the management themselve are the substantial shareholders like orna, the management collectively owns more than 30% of share. PPHB has not been paying dividend since 2011. I prefer company that pays dividend regularly like orna, meaning the cashflow is good which is true in orna. It is a matter of time the company will be revalued at higher share price
Excellent result with EPS of 7.16. DPS also grows. Ppl start selling it when pphb reported lower profit. However, orna has diverse groups of customers, including paper industries, food, tobacco, furnitures, E&E and others. This might explain its steady income. Not2forget it has stable customer in Julie's biscuit which shares the common shareholder. Its factories also located at different areas in northen, central and southern regions to capture different market. PPHB only has foothold in penang. As i said before, i prefer it because the management owns more than 30% of share as opposed to MASTER where management is not the substantial shareholder and it consistently pays dividend as opposed to PPHB. Based on Fred PPI up to January this year, paper price has remained 10 year low. I believe next year ORNA will be able to perform well too. The company also mentions that it is cautiously optimistic of maintaining positive result for 2020
Be cautious if u plan to buy MUDA. MUDA is not a pure corrugated box manufacturer, it also involves in producing industrial paper. Currently, industrial paper price is low, so it may affect the profit of MUDA. In contrast to Orna, which is pure corrugated box producer. So if indutrial paper price low, it will increase its profit margin and earning due to low material price. Must do proper research and dun follow blindly
Orna is indeed very undervalued even at current price. At industrial PE of 10-12, it should worth rm 1.7 to rm 2.0. Business value wise, if based on the price OJI paid to buy HPI 10 years ago at around rm 250 million, then Orna should worth above rm 3
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....
Flash18
27 posts
Posted by Flash18 > 2020-01-02 08:47 | Report Abuse
eps increasing, value depleting. they dont want you to be here.