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KLSE: MAGNI       MAGNI-TECH INDUSTRIES BHD
Last Price Avg Target Price   Upside/Downside Price Call
5.10 6.34     +1.24 (24.31%)
* Average Target Price, Price Call and Upside/Downside are derived from Price Targets in the past 6 months.
** Price Targets are adjusted for Bonus Issue, Shares Split & Shares Consolidation (where applicable).
Date Open Price Target Price Upside/Downside Price Call Source News
16/03/2018 5.09 6.40 +1.31 (25.74%) BUY PUBLIC BANK Price Target News
15/03/2018 4.47 6.28 +1.81 (40.49%) BUY WILSON & YORK Price Target News
26/01/2018 5.05 6.40 +1.35 (26.73%) BUY PUBLIC BANK Price Target News


Price Target Research Article/News (past 6 months)
16/03/2018  PUBLIC BANK Magni-Tech Industries Berhad - Regain Its Footing
15/03/2018  WILSON & YORK Magni-Tech Industries Bhd - 3Q FY 2018 Results Report (BUY)
26/01/2018  PUBLIC BANK Magni-Tech Industries Berhad - Value Emerged On Share Price Weakness



  6 people like this.
 
loonginv lai lai lai, side bet, 20sen? 25sen? Or maybe like superln 30sen?
22/06/2018 22:41
apple168 Revenue dropped 30%, profit crashed 50%. Magni is terribly sick.
22/06/2018 22:43
trulyinvest Rm4.30 fair value
22/06/2018 22:44
apple168 We shall see opening at 4+ and straight down to 3+ on Monday if kyy and his followers starting to dispose Magni shares... my advice is do not catch the falling knife...
22/06/2018 22:47
trulyinvest Not so serious la. Down to 3+ next mon. Anyway eps,stil 12sen per q n give dividen. Rm430 fair value.,unless next q another poor,result, then 3+ loh
22/06/2018 22:50
apolloang open 4.70 then rebound to 4.8++,cos this stock got tan sri support or else mon down RM 1. surely no 3.00 for next week
22/06/2018 22:51
ltg100y Anyone know latest info of the 2 new plants status? Thanks.
22/06/2018 23:37
chesslim 记住, 当别人恐惧时你要贪婪。
23/06/2018 00:00
probability Almost 85% of its revenue is from single customer.. What had happened this qtr was due to vacuum created by the forward demand earlier much ahead of the World Cup by this single customer on qtr ending 31Jan18 (Q3-18).

We saw Q3-18 Revenue spiked to 313 M
Latest Q4-18 Revenue dipped to 220 M

This is purely by the forward intake taken place by this customer during Q3-18.

Margin had barely changed compared to preceeding qtr.

This means the Average Revenue the recent last 2 qtrs is:

about 270 Million
............................

Thats about the same as the Revenue on the two qtrs before that:

Q2-18: 252M
Q1-18: 293M

Avg = 270 Million
.............................


The average revenue before Q1-18 in 2017 was about 290 M...that was purely due to weak RM against USD that time....

Without the currency effects, even during that time the average revenue is about:

= 270 M
.............................


The current realistic forward looking EPS per qtr is the average of last 2 qtrs:

= 15.75 cent/qtr

= 63 cents / annum

at PE 10, it should be trading at RM 6.30 without any growth assumption.
23/06/2018 01:45
apple168 Nike share price in NYSE dropped 51 cents, closed at 73.43, PE 68. Expecting huge drop for Nike share price in this trade war with US.
23/06/2018 07:27
apple168 Magni Revenue dropped 30%, profit crashed 50%. Magni is terribly sick! Are you crazy to buy a sick company with PE 10? PE 2 also not sure if ppl want or not during such bad market sentiment!
23/06/2018 07:32
apple168 Market re-rated TM share price a drop of 20% due to broadband go cheaper by 25% year end. Magni profit crashed by 50%, share price should go down by 40 to 50% as this is an official result, not by prediction!
23/06/2018 08:04
chonghai I suspect apple168 wants to collect cheap. Why not Apple168 sell him stake at RM3 ?
I am interested.
23/06/2018 09:04
lizi many expects world cup themes to drive up magni sales this quarter, but this Q4 result likely indicate world cup sales already in Q3.
23/06/2018 09:56
lsv1977final Too late to sell.
23/06/2018 11:15
apolloang open deep red mah hold,when rebound quickly sell lo
23/06/2018 11:20
stock_investor magni is holland stock... buy steel counter i.e. lionind, ssteel ... profit still strong despite cancellation of mega project like HSR and MRT3
23/06/2018 11:24
apolloang the hype is gone now clearly overvalued
23/06/2018 11:32
probability Best time to accumulate, as this EPS is the worst it could ever get....

Next qtr without currency help should be 16 cents.

With the help of currency (weakened RM), 20 cents is possible...

Precious opportunity to collect a company which only needs to fork out a small reinvestment for enormous growth.

Never let go this precious gem, instead, accumulate more at the bottom.
23/06/2018 12:26
ckh823 kyy_superinvestor Hope this experience will make you become more alert towards the market. Sometimes, cannot only rely on fundamental analysis or some simple facts. Good luck to you.
23/06/2018 13:42
trulyinvest Below rm4 can considere
23/06/2018 14:13
makesomemoneyonly crazy you all..
23/06/2018 14:26
jibbie article in Forbes says that Nike, Apple, Starbucks will be biggest victims of Trump's China tariffs. Not good news for magni

https://www.forbes.com/sites/johntamny/2018/04/22/apple-nike-and-starbucks-will-be-the-biggest-victims-of-trumps-china-tariffs/#5be2b84c1b48
23/06/2018 16:12
probability Why Nike Shares Can Rise 35% By Matthew Johnston | June 22, 2018

https://www.investopedia.com/news/why-nike-shares-can-rise-35/


Nike's Turnaround
...................

Kernan emphasizes Nike’s resonance with customers in both product offerings and in-store experiences. He specifically notes the company’s retro styles finding appreciation with customers, and mentions, “Nike’s efforts to tighten supply and focus on segmentation in experiential retail and its own direct-to-consumer [segment] is driving success,” as quoted by Barron’s.

In the company’s most recent quarter ending Feb. 28, revenue grew approximately 7% to $8.98 billion, ahead of expectations of $8.85 billion. Much of that growth was led by China where sales were up 24%. Sales in Europe, the Middle East and Africa were up by 19%, and grew by 13% in the Asia Pacific and Latin America, according to CNBC.

What's Driving Nike's Growth
.............................

*Soaring Sales In China
*Turnaround of U.S. Sales
*New Products, New Store Experiences

While North American sales were down 6%, CFO Andy Champion is confident that sales will turn positive by the first half of fiscal year 2019, the latter half of this calendar year. With the revamping of merchandise and orders from North American partners building, future sales should improve.

Currently, consensus estimates put this current quarter’s sales for all divisions at $9.4 billion, a rise of 8.4% from the same quarter a year ago. Earnings are estimated at $0.64 per share, implying year-over-year growth of 6.7%.

Beating the Skeptics
.....................

This optimism for the iconic sports apparel company is a breath of fresh air for the bulls as there has been much skepticism over Nike’s future with many wondering whether or not the company has lost its spark to competitors like Adidas. For the past number of years, Adidas U.S. sales growth has been far outpacing that of Nike’s, according to a separate article by Barron’s published late last summer.

The growth of e-commerce has also made a dent with Amazon capturing the number two spot behind Wal-Mart for the U.S. apparel market with a 7.4% total market share at the end of 2016.

To stay in the game Nike announced last year that it would start selling some items directly through Amazon. With customers starting to resonate with the company’s products again, the Nike bulls can only hope that such moves will help fend off the growing dominance of e-retail giants
23/06/2018 17:05
probability https://www.thestar.com.my/business/business-news/2017/10/06/strong-demand-for-sportswear-to-underpin-magni-tech-growth/

Magni-Tech’s subsidiary, South Island Garment Sdn Bhd, is an original equipment manufacturer (OEM) for a number of reputable brands such as Nike, Lacoste, Patagonia and Hurley

Over 90% of its apparel sales are derived from its single major customer, the world’s largest sportswear company (NIKE). At present, the group has an annual capacity of 37.3 million pieces.
......................................................

“With the two new manufacturing plants potentially coming on stream in FY19F, we anticipate another round of ramp-up in production capacity in order to meet growing demand for sportswear.

“As such, we believe the group is poised for the next growth trajectory. While waiting for capacity to pick-up in FY19F however, we expect a marginal decline in core net profit for FY18F (-2.1% year-on-year) as its capacity utilisation is almost full at c.90% currently.
23/06/2018 17:09
newbie911 Old news, for?
23/06/2018 17:15
probability stating that Magnitech revenue is 90% from Nike....

If Nike does well in future ..Magnitech will do well too...

The first article (investopedia) on top shows Nike will do well...
The second article (the star) shows it has new capacity coming soon to cater higher demand...
23/06/2018 17:19
newbie911 Not risky bcz nike sale will be affected with trade war?
23/06/2018 17:22
probability There are many ways to channel sales to China without originating from U.S. Trade war is Tariff on country of origin ..not the Brand Nike itself. Its two different thing.

Magni can channel to Nike Europe to send to China...also why not establish its Sales centre in Malaysia itself for China Market?

That would be explosive to Magnitech.


Posted by newbie911 > Jun 23, 2018 05:22 PM | Report Abuse

Not risky bcz nike sale will be affected with trade war?
23/06/2018 17:37
probability https://marketrealist.com/2014/12/nikes-distribution-channels-products-reach-customers


An Overview Of NIKE's Supply Chain And Manufacturing Strategies
By Phalguni Soni
Dec 2, 2014 | 11:59 PM
The COGS in NIKE’s supply chain:

Delivery precision in a multi-product and multi-jurisdictional company like NIKE, Inc. (NKE) is critical. It improves profit margins, reduces inventories, minimizes price markdowns, and ensures that the customer receives the right product assortment on time. NIKE moved ~900 million units through its supply chain last year. Its manufacturing network consists of over 700 factories in 42 countries. Each product moves from 57 distribution centers across a network of 18,500 accounts and 140,000 retail doors.

Yet NIKE owns no factories for manufacturing its footwear and apparel, which make up ~88% of its revenues. Instead, manufacturing is outsourced to third parties because of the cost advantages of doing so. Most raw materials in NIKE’s supply chain are sourced in the manufacturing host country by independent contractors. Overseas manufacturing of products features in the strategies of rivals Under Armour Inc. (UA), VF Corporation (VFC), Lululemon Athletica Inc. (LULU), and Adidas AG (ADDYY) as well.

Part 5


NIKE’s manufacturers
NIKE is one of the pioneers of the industry-defining manufacturing outsourcing strategy. It’s now exploring innovative ways of manufacturing so it can customize products on an unprecedented scale.


Key manufacturing thrusts
.........................

Lean manufacturing – By the end of fiscal year 2013, between 70% and 76% of its apparel and 85% of its footwear products were manufactured on lean lines. This delivered additional savings of $0.15 per unit through better labor productivity and lower waste Material consolidation – Reducing the number of vendors through which NIKE sources materials and also reducing the materials used in manufacturing products Manufacturing innovation and modernization

Footwear manufacturers
.......................

NIKE’s footwear is manufactured outside the US by independent contract manufacturers that often operate multiple factories. In fiscal year 2014, the company was supplied by ~150 footwear factories in 14 countries. Contract factories in Vietnam, China, and Indonesia respectively manufactured approximately 43%, 28%, and 25% of total NIKE’s footwear. The largest single footwear factory accounted for ~5% of total NIKE brand footwear production.

Apparel manufacturers
........................

Like footwear, all of NIKE’s apparel is manufactured outside the US by independent contract manufacturers. In fiscal year 2014, NIKE was supplied by ~430 apparel factories operating in 41 countries. China, Vietnam, Thailand, Indonesia, Sri Lanka, Pakistan,

and Malaysia accounted for most of the apparel production.
..............................................................

The top five apparel contract manufacturers together accounted for ~34% of NIKE’s apparel production. One apparel contract manufacturer accounted for over 10% of production.

Third-party licenses
.....................

NKE also has license agreements that permit unaffiliated parties to manufacture and sell using NIKE-owned trademarks, certain apparel, digital devices and applications, and other equipment designed for sports activities.

NIKE’s distribution centers
...........................
NIKE has five primary distribution centers in the US located in Memphis, Tennessee, three of which operate on a leased basis. The company had 16 distribution centers outside the US at the end of fiscal year 2014. NIKE brand apparel and equipment products are also shipped from its distribution center in Foothill Ranch, California. Converse and Hurley products are shipped primarily from Ontario, California.
23/06/2018 17:49
probability Since Magni's apparel are sold to Nike's Distribution Centers in U.S, its apparent that the spike in Revenue reported in Q3-18 of 313 M by Magni is stock up of higher inventory due to anticipated higher Sales by Nike. Following the spike its normal to expect a 'withhold'' intake in the following qtr (Q4-18) to maintain the same level of usual inventory..

The revenue decline is not due to direct end customer buying interest dissipation or penetration by competition.

Its purely due to Nike's Sales anticipation decision influenced by World Cup consumption of Apparels earlier.
23/06/2018 19:01
apple168 I will not collect even at whatever opening or closing price of Magni. Keep cash for now. I m expecting KLSE to crash to 1500 soon. At that time, bluechips are extremely good bargain than terribly sick Magni.
23/06/2018 19:43
newbie911 Sad....dont knw wan hold or cut loss on monday.
23/06/2018 19:46
apple168 I suspect those who keep promoting Magni shares are for them to sell and run. Do not catch the falling knife!
23/06/2018 19:46
apple168 Please Cut loss and keep cash for now..
23/06/2018 19:49
apple168 Magni TP 2.. sell before it is too late.. when kyy and gang start selling, it will be worse.. we can see how HengYuan crash from 19 to 6 now.. the pathetic drama going to repeat again..
23/06/2018 19:52
probability Nike is winning over new customers and it could 'dramatically increase prices' (NKE)
Jacob Sonenshine
Jun. 21, 2018

http://markets.businessinsider.com/news/stocks/nike-stock-price-winning-customers-could-dramatically-increase-prices-2018-6-1027308709


Nike is gaining serious traction with customers. That traction is giving Nike increased pricing power.

Nike dominates the global sportswear market — and data shows it has strong pull with both existing customers and potential customers.


"Our 2018 UBS Evidence Lab global athletic wear survey indicates Nike customers' repeat purchase intentions are high and we think this is a strong indication of high loyalty," UBS analyst Jay Sole wrote in a note out to clients.

"Nike brand has number one mindshare with global consumers," Sole said. And with that strong brand identity comes increased pricing power.

The sneaker giant has been able to use its brand identity to ramp up its direct-to-consumer initiatives that increase its pricing power.

"These initiatives could help Nike dramatically increase prices," Sole said, warning that "it may take years for Nike to fully achieve its ecommerce and supply chain goals."

Nonetheless, several other data points show Nike's pricing power is increasing, and that it is relying less on discounts. "Nike US apparel discounting breadth has dropped 1,200 basis points to 44% over the last 12 months," Sole wrote.

Meanwhile, it's biggest competitor, Adidas, is relying more heavily on discounts, according to Jefferies analyst Randal Konik. "The depth of discount on the sale page at footlocker.eu for Adidas remains at relatively high levels, which is incrementally concerning to us," Konik wrote in a recent note to clients. The average Adidas discount on Konik's check was 37% off the original price, while Nike's average discount was 25%.
24/06/2018 00:49
probability Extract from Annual report 2017:
.....................................................

Business Strategy – Garment

Our garment arm is exploring to have a joint venture (“JV”) with our Vietnamese partner and associate to build 2 new green and sustainable manufacturing plants in Vietnam with Target Leed Gold Certification. The precise percentage share, investment costs and other relevant details of the JV will be announced to Bursa Securities once the details are finalized and agreed upon by the JV parties.
24/06/2018 11:19
shareinvestor88 Net cash 210m or 130 per share
24/06/2018 12:02
lsv1977final Cash rich
24/06/2018 14:39
apolloang market cap 829 mil cash 210 mil consider cash rich? dutaland market cap 423 mil cash 700 mil
24/06/2018 14:54
probability Its not about 'cash per share' over 'price' that matters, its the potential value generation with the cash they have....

Dutaland perhaps have potential to generate 6% return if the cash is invested...for Magni, it can generate 7 times more (at ROIC of 42%) with the same cash. Further to that, the reinvestment potential is clearly visible.

Now that JV is on the line.... just in a year the Earnings will be explosive..totally explosive coupled with Nike's growth.


Posted by apolloang > Jun 24, 2018 02:54 PM | Report Abuse

market cap 829 mil cash 210 mil consider cash rich? dutaland market cap 423 mil cash 700 mil
24/06/2018 16:07
apple168 “We hv oils in hell” said the demons. All rushed into hell and burnt into ashes. All forgotten the sweet moment in heaven, burnt into ashes due to greed.

Do not catch the falling knife of Magni. It is extremely sharp. TP 2.
24/06/2018 17:22
probability Nike PE = 31

https://www.bloomberg.com/quote/NKE:US

despite being its Garment manufacturer for last 10 years or more, market want to give Magni only PE of 10? Just because Magni does not own the brand Nike? But it did show a growth story matching Nike....check out its Earnings Cagr before Nike reached a plateau last 2 years.

Thats not much different than Inari which is dependent on Avago's growth....check out Inari's PE.

The 2 year plateau is over for Nike...a fresh growth story is restarting.

Its stupidity to let go Magni at this point of time..... at such low PE.

just another 3 months ....earnings will make u more bullish than me 10 times!
24/06/2018 18:12
shareinvestor88 what JV is magni in ?
24/06/2018 18:22
shareinvestor88 Ya sell TP 2
24/06/2018 18:23
swordwa2 the JV between Nike and Vietnamese company is a good/bad news for magni?
24/06/2018 18:25
probability Extra capacity to produce garments...how can that be bad?
Earnings will be proportional to your stakes.

Posted by swordwa2 > Jun 24, 2018 06:25 PM | Report Abuse

the JV between Nike and Vietnamese company is a good/bad news for magni?
24/06/2018 18:27
apple168 TP 2. Don’t get trapped.
24/06/2018 18:35
swordwa2 Bad as in they might switch part of the manufacturing to vietnam if it's cheaper?
24/06/2018 18:36


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