INTRODUCTION

MBL is a world-leading palm oil machinery manufacturer specializes in oil seed crushing machinery. Recently they diversify into upstream oil palm business by acquired 2 Indonesian companies called PT Serdang Jaya Perdana and PT Banyuasin Nusantara Sejahtera which run edible oil milling.

MBL is different with other plantation companies. They don't have any landbank to plant palm oil trees. Actually they have one or two but there is no huge impact on their profit or loss.

WHY MBL IS A GOOD BUY?

1 GOOD CPKO PRICE

Crude palm kernel oil price has increased more than 20% since September 2016 to December 2016. Currently CPKO is trading at RM8400 per tonne. Click here to check the latest price.

2 NEW CONTRIBUTION FROM NEW ASSOCIATE COMPANY

MBL acquired 51% of PT Serdang Jaya Perdana on 28 September 2015. After 3 months, MBL's revenue and PBT increased more than 100% contribution from this new subsidiary.

Few months ago, MBL acquired another associate company called PT Banyuasin Nusantara Sejahtera which will make new contribution in next quarter and result should be released in the end of Feb 2017.

3 GOOD FUNDAMENTAL : SUSTAINABLE PROFITABILITY

Look at its revenue, almost grew 5 times within a year. The group is eyeing merger and acquisition (M&A) from time to time to make sure that there is enhancement in their future earnings. Their edible oil milling business allows them to generate a recurring income stream instead of just manufacturing and trading oil seed crushing machinery.

4 PERFORMANCE OF SHARE PRICE : TA IS COMING.

Though crude palm kernel oil (CPKO) price has gained significantly in these few months but there is no rally in MBL's share price. Its share price is hovering around RM1 since August 2016 till end of Jan 2017. In this few days we can see MBL and MBL-WA are in trending now. Hence I think it is time to buy this good bargain stock and then wait for its quarter result.

Some useful links.

1. http://www.mbl.com
2. http://www.malaysiastock.biz/Corporate-Infomation.aspx?securityCode=5152
3. http://bepi.mpob.gov.my/index.php/en
4. http://www.theedgemarkets.com/en/node/231724  September 28, 2015
5. http://www.theedgemarkets.com/en/node/249572  December 21, 2015
6. http://www.kwongwah.com.my/?p=145375  May 25, 2016

(Buy at your own risk)