Investor on the Street

MAGNI (7087): Mesmerising Valuations

Publish date: Sat, 15 Oct 2022, 07:25 PM

MAGNI (7087) is a Main Market company in the Consumer Products & Services segment.  

MAGNI's business is mainly in manufacturing & sale of garments, plastic packaging & corrugated cartons. (mainly garments, believed to be OEM for Nike)

Is MAGNI selling at cheap price now?


1. Share price you pay now is lower than Price to Book. 

MAGNI's share price is RM 1.69, whilst its net assets is about RM 1.79.


2. Best performance in FY2021.

MAGNI's revenue hit all-time high in FY2021. Net profit hit all-time high in FY2021. Share price all-time high was in July 2017 around RM 2.80 (using post-bonus-issue price). 


3. Financial Statements. 

MAGNI had positive net cash from operations consecutively in its recentmost 20 quarters. MAGNI has been a net cash, zero debt company, every year at least since 10 years ago. Not sure MAGNI has been net cash, zero debt since IPO. MAGNI's cash hoard of around RM 407mil (as of latest quarter report 31 July 2022) is almost 55% its current market capitalisation of RM 733mil (as of 14 Oct 2022). MAGNI has given dividends annually since IPO.


4. Insider dealings.

Executive Chairman Tan Sri Dato Sri Tan Kok Ping & Managing Director Mr. Tan Poay Seng has always actively bought shares of MAGNI from time to time.

Highly probable insiders think MAGNI is undervalued. 


5. PE ratio is around 7-8.

MAGNI's trailing PE ratio is low. However, MAGNI has always traded at low PE, believed due to its customer concentration risk.

I have MAGNI shares. Suppose MAGNI produces an average net profit to shareholders of 27.1mil./quarter, given PE ratio of 8, MAGNI should be worth RM 2.00.

Be the first to like this. Showing 0 of 0 comments

Post a Comment