MASTER (7029) – MASTER-PACK GROUP BHD is another paper packaging industry player worth to look at after previous find & tip-off by Mr. Koon Yew Yin who prefers more PPHB (read HERE).

I did compare both and both of them have surprisingly strong fundamentals, low debt and lot of cash, major differences between them are:

- PPHB has better P/E (higher earnings to share price) but less “stable”

- MASTER pays good dividend which is important factor for some

- PPHB has higher market cap and better trading volume

Lets have a look if MASTER has some up potential:

As you can see volume during the last few months almost dry up and price action is as good as a jumping rabbit, the current price level can be considered OK to enter, if someone decides so. Increased interest in this stock will most probably result in a high volatility and wild price swings. Thats maybe why Mr. KYY does not prefer this one as it can be also difficult to accumulate bigger share amounts.

What I like about this company is a very good “equity to assets” ratio, low debt and enough cash.

If I see this I am actually not sure, if I did overlook something or did some mistake, it looks very strong.

Here we see their last results, the latest EPS is little bit down, but management explain it in the financial report as some transitional issue with customer and expecting their revenue (and hopefully profits) to increase going forward and for the whole of this year. How much this “higher” can be?

At first I calculate trailing EPS and P/E ration for the last 4 QRs:

Trailing EPS: 21.05

Market price at 8. June 2021: RM 1.77

Trailing P/E: 8.4

With target P/E for this sector is around 9 and small company needs to be discounted, it looks like the current market price is just right.

But NAPS 2.15 and paying nice dividend last year 6 sen and the most important here – management is confident they will do better for the rest of the year!

If we consider the above and lets say for the rest of the year EPS will be just little bit higher at 6.5sen per QR: 6.5 x 4 = RM 0.26 with target P/E of 9 (will keep 9 thanks to NAPS and DIV) => RM 2.34.

With fair value of RM 2.34 there is a potential min. >30% upside – In my opinion only, of course. NOT trading recommendation!

Have a look at PPHB too.

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Disclosure: Im not holding MASTER

Disclaimer: Im not a professional financial advisor or a financial analyst or an economist or an accounter.
This is not a trading recommendation / advise, just my personal view