Stock pick: 1. Mega First (3069) Current Price: 2.39 Target Price: 3.85 Dividend yield: 3.1%, NTA= RM3.23 Why should we invest?
- Benefitting significantly from stronger FX currency as 90% of its earnings are mainly denominated in CNY, USD currencies and other foreign currencies. (CNYMYR=up 8.8%, USDMYR= up 10.8%, SGDMYR=4.5% & HKDMYR= 11%)
- Balance sheet will also strengthen significantly as 75% of its total cash are held in CNY, USD and SGD. (net cash and investment in quoted shares totalling RM178m or 80sen/share.
- Expecting potential earnings surprise from 4QFY14 onwards banking on stronger FX growth, which will surpass our earnings forecasts by at least 7%-10%.
Mega First’s (MFCB) diversified geographical exposure has safeguarded the company’s prospects in the face of weakening economic fundamentals and the depreciation of the Ringgit. Our estimates show that the weakening of Ringgit could potentially lift the company’s FY15 earnings by 7%-10%. We expect decent results from 4QFY14 (expected to be announced on 26 Feb) onwards. Based on our SOP-derived TP of RM3.85, we see deep underlying value in the company as it is only trading at a forward PER of 7.5x
U can access to their reports if u have a cash saving account.
u can try to access under the public bank internet banking> equity research on the top right. U can click on each type of report except company reports.
Mega First’s (MFCB) posted a sterling set of results for FY14 with core net profit standing at RM73.8m, surpassing our forecast by 15% after stripping out i) one-off impairment charge of RM10.9m on an associate, ii) RM2.5m loss form quoted investments and iii) RM7.1m fair value gain on investment properties. The better-than-expected results were driven by improved contributions from all three core businesses, namely, power (+12.3%), resources (+1.4%) and property (+63.8%). Meanwhile, a final tax-exempt dividend of 5sen was proposed for the quarter, making up 8sen for FY14 (FY13: 7.5sen). We reaffirm our Outperform call and target price of RM3.85 which implies a healthy potential upside of 55%.
trading is willing buying willing selling basis ma...
and 4 days back started accumulate..... they will sell whenever news is out....... who knows gam gam kena today market down???? if not, they will push until tomorrow lo......
greetings IVKLSE... i reviewed ur research... i learn alot abt MFCB.. thank u... i hv a question.. is board of director must hv knowledge on mfcb's core businesses? Correct me if im wrong, to me directors hv to b skillfull on managing whole business like handling cash incoming outgoing, other investment , achieve great deals ets... for specializing they can hire ppl who knowledgable in core businesses.. as i can see their cashflow showing positive for number of years.. it means their management good kan?
From my point of view, shareholders can have no knowledge at the business at all since they are just the owner of the company and do not have to involve in the daily operation of the company just like bosses who can hire someone experience to run the company.
However an director of a public listed company is voted by the shareholders to oversee the daily operation of the company. Hence they shall have a certain knowledge of the business you cannot get someone run a F&B business to run an airline company the next day.
I am not saying that all directors must be in the field of the business. Sometime it is good to have accountant to sits on the Audit Committees to reviewed the accounts, an financial degree CFO to handle the cash incoming and outgoing or maybe a lawyer to make sure the business is legal in the place of operations.
From the MFCB 2014 annual report, I saw one director have the experience in property development who is Mr Goh Nan Yang the executive director. To make myself clear I did not state that other director is not suitable, they are all voted out by the shareholders hence they shall have some skills which able to contribute to MFCB which did not stated clearly in the 2014 annual report.
As for the positive cash flow, from the 2014 annual report you can see most of the revenue is come from the power generation plant. I am not an expert in power generation business but my view is power generation business is like passive income (renting out a house and collect rental). Everyone need electrical supply nowdays, we just need to pay the TNB every month to pay for the electricity no matter how much it cost. Of course our government have control on the electricity price. MFCB have these wonderful money making opportunity until 2017, unless they able to extend the contracts.
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matakuda
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Posted by matakuda > 2015-01-03 18:23 | Report Abuse
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