With rising commodity prices (Cotton up by 6%, paper/lumber up 64%), how do you guys reckon these will affect magnitech results in the coming quarters? Any info on if they do hedging?
Magni main operation is actually in Vietnam. They have 10 factories located mostly in Ho Chi Minh area with a total combined of 13,600 line workers. Most of the workers in Vietnam are locals. The 2 factories in Penang are relatively small compared to those in Vietnam.
So i don't think they have issues with forced labour.
This is the question shareholders have been asking magni for decade. "what if Nike choose not to give magni order" yet we see magni have been growing and growing. Think before u invest in any stock. :)
From my understanding, factories can still operate but with strict SOP. Its not total lockdown like the one we are facing in Selangor. The recent movement control will last 15 days from 9 July to 24 July.
Most of the factories in Ho Chi Minh are still in operation during the MCO but with lower capacity.
Those that are forced to close are factories that have direct covid cases but government will allow them to reopen once they set up covid prevention and containment measures.
Taking recent 2020 net profit at 118 mil, at PE 8x, we'd get price per share price of 2.17 - very close to current price now. Adding a huge net cash 334 mil, (per share of 0.77), MAGNI's price should be 2.17 + 0.77 = 2.94 at minimum.
If you assume PE 10x, it would be even higher.
Assuming MAGNI, continues to distribute 35% of profits for dividend, that's 4% dividend yield on current price of 2.20.
Without even counting growth in the next 2-3 years (note that MAGNI has grown its earnings by 22% CAGR past 10 years and 8% pa past 5 years), assuming MAGNI takes 3 years to reach 2.94 price, holding MAGNI at 2.20 today would give you return of 14.5% return per annum, inclusive of the 4% dividend yield each year.
dont be silly guys....the covid 19 situations in vietnam is already priced in to magni share price now....if vietnam situation is good, magni would already marched into 2.80 to 3.00....now is the time to buy not sell...accumulate slowly.
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....
Huat 888
330 posts
Posted by Huat 888 > 2021-04-29 08:45 | Report Abuse
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