does market crash means people stop eating chicken? everyone knows the answer. Start accumulate
Haha...this kind of thinking is 1 way ticket to holland. Ignoring the price in term of valuation, other competitors andeffect like feed & labour cost and forex.
4Q18 result was really a bad quarter for the company mainly due to the drop of gross profit margin from 11.9% a year ago to only 5.8%. This in turn resulted in the company posted it first quarterly losses in more than 2 years. Management blame the drop-in margin was due to higher feed cost (a bit weird given that average corn and soy bean price actually went down compared to a year ago. The increase is maybe due to the weakening of RM vs USD) and distribution cost as well as lower average selling price of broilers from RM4.99/kg a year ago to RM4.52/kg.
That being said, investors should expect the company to perform better in 1Q19 given the improvement of the broiler price (http://www.dvs.gov.my/index.php/pages/view/440). However, the average price is still lower compared to 1Q18. So, I don’t think the company will achieve a core profit of RM10mil per quarter anytime soon.
If you are looking to diversify your portfolio outside of CAB (due to the earnings uncertainties), I would recommend you to look at MBMR.
MBMR is a direct proxy to Perodua via its 22.6% interest in the company. Valuation is cheap at only 6.0x PE (based on target FY18 PATAMI of RM145mil. 9m PATAMI is already RM106mil). PB is low at only 0.5x BV. 4Q18 results is expected to be higher than 3Q18 and last year's 4Q17.
For FY19 growth will be driven by the still high demand of new Myvi and the launch of the new SUV in 1Q19 and also the new Alza in 2H19.
Please go through the analyst reports (https://klse.i3investor.com/servlets/stk/pt/5983.jsp) and do your own analysis before making any decisions. Most analysts have a TP of above RM3 for the company with Hong Leong being the lowest at RM3.13 and Maybank the highest at RM4.18.
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....
super888
517 posts
Posted by super888 > 2018-10-11 10:29 | Report Abuse
really rubbish counter.... will drop below 0.60..