KUALA LUMPUR (March 30): RHB Research Institute has maintained "buy" on Mah Sing Group Bhd at 82 sen with a higher target price (TP) of RM1.02 (from 97 sen) as it foresees the group’s maiden glove manufacturing business to boost its earnings.
She opined that the contribution from glove manufacturing could possibly boost the group’s FY21 earnings by 70% to 80%.
“Given the earnings boost and its 40% dividend payout policy, we expect the dividend per share to amount to 4.6 sen and 6.3 sen for FY21 to FY22, suggesting an attractive yield of 6% to 8%, among the highest in the property sector,” she said, adding that investors should turn more confident in the group’s glove manufacturing business.
Still, Choo believes Mah Sing Group and Eco World are attractive because of their relatively cheap valuations and strong management team, and they managed to deliver profits every quarter last year even during the Covid-19 pandemic and movement controls.
“Many bigger property companies reported losses for some quarters, owing to impairments that were larger than their operating income. The outlook for both companies appears to be promising as they launch innovative products at affordable prices. The property market is currently very competitive, whether you are big or small. We believe the key to success is a pro-active management and the right products. It helps that the landbank location is good, too,” says Choo.
Bursa is always sell on news, buy on rumors. Once the glove production news is officially out, then will be buying on future factor-in price. Now is consider safe to park my investment in Mah Sing. Not forgetting their core business is still in property development, which in general have pick up in recent months. Once our vaccination for mass public had started, this will be the catalyst for property sector
In full operation of 12 production line, Mah Sing glove business can record revenue 800mil/year. With profit margin 30% (refer to other glove operators as guideline), net profit 240mil, EPS 9.9sen. With profit margin 20%, net profit 160mil, EPS 6.6sen
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....
OrlandoOilSemiconT
4,909 posts
Posted by OrlandoOilSemiconT > 2021-03-26 08:26 | Report Abuse
Gloves making nowadays is not labour intensive
Highly automated
Workers r required only to clean d gloves making machineries