Not sure why the share price went up substantially from only 13 sens to more than 20 sens (even reaching 30 sens before paring most of the gain) last week. There was no corporate development announced since the run up of its share price.
In essence, the company reported negative earnings for FY18 with revenue falling more than 50% compared to FY17. In 2018 most of its business segments except for Fintech recorded losses. Investors need to wait for the 1Q19 result to see if the company managed to turnaround the IoT and Greentech businesses. The average quarterly revenue for 2Q18 to 4Q18 was only RM2.2mil vs FY17 average quarterly revenue of RM6.4mil during the same period. If the low revenue persists in FY19, investors need to be prepared for the company to record another year of losses in 2019.
MBMR is a direct proxy to Perodua via its 22.6% interest in the company. Valuation is cheap at only 7.0x PE based on FY18 profit of RM166mil. PB is low at only 0.7x BV.
FY19 should deliver another profit growth year to the company. Profit growth will again be driven by the performance of Perodua (via MBMR 22.6% holdings in Perodua) from the still strong sales of new Myvi, sales of SUV Aruz and the introduction of the newly revamp Alza sometime in the 2H19. Aruz which commands a higher margin compared to other models, will help improve the total profit margin of Perodua (which will flow to MBMR’s bottom line as well).
MBMR is expected to achieve a profit of RM200mil in 2019. At the current share price, the company is being valued at only 5.8x which is a lot lower than the industry average of 15x PE. As an example, UMW (another company with exposure to Perodua) is currently trading at a PE multiple of almost 20x.
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....
TomyamGong
4,156 posts
Posted by TomyamGong > 2019-04-16 10:06 | Report Abuse
Very soon will rebound. Stay tuned guys.