LGMS has the cheap Malaysian workforce to deliver work for Mitsui on outsource basis for its clients. Also, can handle any kind of local certification works.

This will be a big positive. Buy buy buy

Think project MARS can easily deliver pricing of RM5,000-10,000 per annum per subscription?

This stock got strong growth potential. valuation inexpensive at 32x FY23 PE. Group earnings been growing 18% CAGR. Future growth also look robust. Project Mars and Project Mercury will be a big thing if it takes off. One potential customer could be CTOS or payment gateway providers like GHL. Projections look likes can do RM23-25m net profit by FY24.

heard got large block transacted recently. anyone know what price was transacted?

think will correct on Monday.

Next support at 33?

That means can buy?

Results quite decent but share price come down?

Up 1% now with slight uptick in vol wohoo

patient. will jalan soon :P

Strong balance sheet

Despite the last two years’ aggressive expansion exercise, MBL’s balance sheet remains strong.

As at 30 June 2017, it had net debt of just RM4.9 million, or a low net gearing ratio of 5%. The company has historically been conservative and in net cash position, with net cash peaking at RM37.5 million in Dec 2012, before the recent expansion exercise.

The company has a subsidiary, Sokor Gemilang Ladang Sdn Bhd, which holds land rights to develop 789 ha of land into plantation land in Kelantan. The company was planning to sell the land at RM35.1 million, which will yield an exceptional gain of RM10 million, but the deal fell through.

MBL has proposed a private placement exercise, which it hopes to raise around RM10 million. The private placement and future potential land sale will strengthen its balance sheet for future expansion. As profits grow and its cash position rises, MBL should also be in a position to declare better dividends. Total dividends paid out for 2016 was RM3.65 million, which translates to a yield of around 1.5% and 31% pay-out ratio.

Muar Ban Lee Group Bhd (MBL) is a palm oil machinery manufacturer, specialising in oil seed crushing machinery. MBL designs and manufactures palm kernal crushing plants, palm oil mills and palm oil waste treatment plants. Last year, MBL expanded into the edible oil milling business in Indonesia.

The company has over 20 years of experience in the industry, with businesses based in Malaysia and Indonesia, and sales spanning the globe, especially to Indonesia, Thailand, Guatemala and Nigeria.

In 2016, MBL’s revenue surged 192.3% to RM179.8 million, driven mainly by its newly acquired edible oil milling business in Indonesia. Pre-tax profit and net profit both roughly doubled to RM16.5 million and RM11.9 million, respectively.

Among its 2 main business segments, manufacturing contributed 52.8% of the company’s revenue and 68.8% of segment pre-tax profits in FY Dec 2016, while edible oil milling accounted for 39.8% of revenue and 31.2% of segment pre-tax profits.

MBL is currently trading at 1.1 times book and about 10.1 times earnings. Fully diluted P/E will be about 12.7 times assuming full conversion of its outstanding warrants and dilution from the recently proposed private placement exercise.

Its sector peer is CB Industrial Product Holding (CBIP, Fundamental score 3.0/3.0: Valuation score 2.4/3.9), which is trading at 11 times earnings and 1.4 times book, with fairly stagnant growth versus MBL, albeit from a much larger base. MBL also offers a cheaper exposure to the plantation sector, trading at half the sector’s average.

Exposure to fast growing markets

Prospects for the plantation sector, to which MBL’s fortunes are tied, are inevitably linked to palm oil prices. Despite fears of higher post-El Nino output and rising inventory, palm oil prices have remained firm, trading around RM2,800 per tonne, fuelled partly by high soybean oil prices.

An environment of firm and stable prices will help to spur further investments in the palm oil sector. However, new plantation land availability in Malaysia is also becoming more limited. Hence, we like MBL’s exposure to the faster growing areas for new palm oil cultivation – Indonesia and Africa.

Indeed, a look at the 2016 annual report suggests that growth in Malaysian equipment sales rose just 4.3% for the year to RM11.3 million, and accounted for just 6.2% of total group revenue.
However, growth in equipment sales to Indonesia (excluding revenue for the milling operations) doubled from RM35.5 million to an estimated RM75.9 million. Sales to Nigeria, in particular, grew over 12-folds, from RM0.6 million to RM7.4 million. The company also sells to Guatemala, Thailand, Colombia and Papua New Guinea, among others.

Growth catalysts

Over the longer term, MBL’s growth will be anchored by capacity expansion of its mill equipment manufacturing plant, as well as further expansion of its Indonesian edible oil milling business.
Earlier this year, its CEO stated that MBL plans to double its current capacity, with capacity utilisation rate standing at 90%. It also plans to buy land in Indonesian cities like Surabaya or Medan to set up service centres for spare parts processing purposes.

The company’s expansion into the edible oil milling industry in Indonesia has proven to be a lucrative one. In 2016, this division contributed RM71.8 million in revenue and RM4.2 million in segment pre-tax profits.

While milling margins may be thin, return on investments and assets appear high. According to its 2016 annual report, this division has segment assets of RM18.8 million with liabilities of RM3.7 million. The company acquired a 33% stake in Indonesian PK crushing plant operator PT Banyuasin Nusantara Sejahtera in Oct 2016 to further grow the business.

Growing profits

MBL’s revenue has been on an upward trajectory since 2014, after the company recovered from a period of weak performance in 2012-2013 due to lower sales. Since then, its sales, customer base and scale of operations have expanded significantly, driven by rising sales to emerging markets and the acquisition of the edible oil milling business in Indonesia.

Between 2014 and 2016, revenue increased almost four-folds, from RM46.3 million to RM179.8 million, while net profit almost tripled from RM4.1 million to RM11.9 million. The disproportionately slower growth in profits was due to the lower-margin edible oil milling business. The company generated EBITDA of RM19.2 million in 2016.

oh wow. Tong added to his portfolio. 7% weight somemore.

Monday confirm drop somemore once the news is widely digested.

rebounding?

Why bother about the loss? This company got good landbank with clear development plan. Just hold la.

Yea dead counter cause people don't realise its worth yet. Hong leong recently initiated coverage at RM1.39 TP based on 16x P/E

http://www.hlgs.hongleong.com.my/published/article/s5YQ5dfPb3yZioYlAwDQTiC0AQJDFVUJh1K-73FbxPnoMsG6ZQbj8rhRppuo1ftx6oiV4wyV0531A3AK3HqCwPyH5zFDCfTAvAC67rldfaY1

Taking this acquisition into account, the stock is trading at 13x P/E which is way cheaper than Pestech's 17-18x P/E.

Looks like going to open high wohoo

China’s President Xi Jinping was reported to be visiting Malaysia in Oct 2017, after the Communist Party of China’s 19th National Congress in Beijing. This will be Xi’s 2nd state visit to Malaysia with the previous visit back in 3-5 Oct 2013. The press reports that Xi will witness the official opening of Sunsuria’s (SSR MK, Not Rated) Xiamen University Malaysia campus in Sepang during his trip. We would not be surprise if Xi also witness the ground-breaking of the MYR55b East Coast Rail Line (ECRL) construction which was awarded to China Communications Construction Company in late-2017 (funding is via a soft-loan from EXIM Bank of China). Malaysian construction groups will benefit from both the 30% local-content portion and as sub-contractors to CCCC’s 70% portion of the works. Both Gamuda and IJM Corp are known to be vying for works related to the ECRL. Also, two other mega projects – KL-SG high-speed rail and Bandar Malaysia – could be in high focus during President Xi’s visit.

Is the gemas project coming anytime soon?

Sold already. Heard there are negative news incoming soon. Profits may not be as good as expected. And I don't like why certain parties like Tan Sri Rashid and friends can get access to as much as 30% of the shares at 10 sen - when the market is at 29-30 sen. So grossly unfair.

so what price to sell?

Sniper Elite - key idea for the stock is that it is expected to make around RM100m in net profit after FMU5 acquisition. The acquisition cost RM260m, which the company will need to raise via private placement (already done), special issue, rights issue (that comes with bonus share), and the listing of the subsidiary holding FMU 5 (probably will list 20-30% stake). Current market cap is only RM170m. Even if you add up all the proceeds from rights and special issue (totalling RM110-120m), the implied proforma PE is still cheap.

Came down to 1.92. Contra players taking profit before t+3 at 4pm

Good chance to collect then. Bought last time but sold too early.

But hor, lots of people say the the breakout signal is when the stock can close above 24.5 sen. So possible to happen today?

oh wow. acquiring a new business.