HELLO !  *read the below for 5 minutes , maybe give u a 10%-20% return*

I believe everybody knows that MUDA (3883) quarter result is around the corner. Usually around the last week of February.

Lets have a look why the stock has moved. 

1. Compare the Yellow Highlight and the Blue box.

Normally on Quarter 3 it will be MUDA’s weakest quarter, and on Quarter 4 it will be MUDA’s strongest quarter due to seasonal reasons.

2. CHEAPER Raw Material prices, means higher profit margin.

This the the Waste Paper prices which is also the raw material for MUDA.

*Lower Raw Material cost means More PROFIT for MUDA*

Here is compilation of Boss’s words after each QTR

QTR 1 FY 2018 (Net profit 15.706m, EPS 5.15)

QTR 2 FY 2018 (NP 11.485m, EPS 3.77)

QTR 3 FY2018 (NP 25M EPS 8.22)

From preceding 3 quarters, total EPS (5.15 + 3.77 + 8.22) = 17.14EPS + Estimate EPS same last Q4FY17, 11.79, total EPS = 28.9

Below I will do a comparison of EPS and PE.

Assume Good Qtr 4= EPS 14, if same as last Q4 EPS 11.79, if bad we assume EPS 8.22

Current Price 2.05, PE 7. 

Worst Case Scenarios of MUDA:
-In Q3 there might be a higher order from MUDA which might affect the Q4 Sales.
 

Pros of Muda:
-China’s Policy Benefits MUDA

-Right now, Price is quite safe. And currently trading at lowest PE ever

-Reduction of Raw Material, and Increment of Sales

I am not saying if you buy MUDA now, you will 100% make money. But the risk:reward ratio is good

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Disclaimer: INVESTMENT IS ALWAYS ASSOCIATED WITH RISK. THEREFORE, YOU ARE ENTIRELY RESPONSIBLE FOR THE INVESTMENT CHOISE MADE. THE ABOVE SHALL NOT, IN ANYWAY, INFLUENCE YOUR INVESTMENT DECISION.

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