A strong buy if u have a long term view. Moving forward, their hydropower project in Laos will be their key growth driver. As at 3Q FY16, completion stage is only 11.5% but we have already seen its contribution to MFCB earnings in the last 2 quarters.
Investment Merits 1) Net Cash Company, currently cash per share stood at RM 0.84 while share price only RM 2.2. 2) Debt/Equity stood at less than 0.1 3) Potential tripple of existing core revenue upon completion of the Laos Power Plant by Dec 2019 - more than offset potential loss of the current income generated from the coal-fired power concession license in China in Year 2022. 4) Most importantly, new stream of income arise from construction of the new power plant valued at USD 500 Mil (or RM 2 Billion based or RM4/1USD). The construction has just completed 11.5% of the work (240 Mil has been recognised in Q1,2,3 2016) and is targeted to complete by 2019 Dec, management is confident to complete it on time. - This would means MFCB has additional construction income of RM (2*0.8-0.24) = 1.36 billion recognized over remaining 3.25 years, ie: 1.36/3.25/4 = 105 Million to be recognised each quarter. Not to forget, it is based on RM 4 per 1USD rate. USD is above 4.45 now. Note that I factor in 0.8 as the contract is 80% owned by MFCB with remaining 20% owned by the Laos government. 5) Chart is super uptrend.
Based on historical 3 quarters result, the pre tax profit margin is around 26%, and hence net margin is slightly above 20%, we haven't factor in the USD appreciation yet in the margin to be conservative, so purely from this new stream of income, MFCB should get > 20 Mil profit each quarter from this construction until 2019, if other operations contribute 16 Mil profit after tax, then it will give MFCB 36 Mil net income, about 9.5 cents EPS per quarter, if PE = 10, the FV will be RM 3.8. Let see whether this FV can be meet by year end. Cheers. Disclaimer: The above is just my personal opinion, please do your homework to confirm the accuracy of the info above. This opinion does not imply any buy or sell recommendation.
Yuan lai is this court case announcement...but that was old news already...is in the announcement few months back and may not materialise as the management claims that the event is not taxable, even materialise, it will just be one time impact on their P&L, and 26 Mil can be covered by their 1 quarter profit...this is the reason I still invest in MFCB...
Its already known in Q3 prior to today announcement.
Expecting provisions in 4Q. The Group has been slapped with additional taxes and penalties amounting to RM22.8m by the Inland Revenue Board of Malaysia., of whch it is required to recognize the provision though the Group is in the midst of making an appeal.
Yeah I rmb I saw it somewhere...even better if got provision...why? The worst event will soon come - " the provision" and no more hindrance going forward except for the pending tawau plant renew...note that tawau plant contribute very little to mfcb revenue and profit...If the court case doesn't go through, bonus for mfcb later on...
1 more thing I just realised, the tax is imposed on MFCB's subsidiary and the subsidiary is 65% owned by MFCB, my best guess is may be the tax that imposed on MFCB is only 65% for that 26 Mil - oni 17 Mil...from the Q3 report, 38% and 34% of the company earnings is in USD and RMB respectively and we know rm has depreciated against both currencies in Q4 so I guess it will help in profit margin...it will helps cushion the provision slightly...and most important...the provision is one time off...
Nicholas 1184 good sharing and thnks for many busy investors aware of the current and impending tax imposed on MFCB. Thnks for keeping everyone informed....... Cheers bro ! At first why the sudden dropped in share price when this counter have been rising tremendously of late...... something might be wrong at first l guess ?
According to my recollection, the subsidiary injected a piece of land as its capital contribution to a JV in a property development with other parties. The tax dept probably deems that tax is payable on surplus in valuation of the land at the point of injection over the original cost, even though none of the property development has been sold so far (according to MFCB announcement). MFCB has not recognised the surplus in value of the land but it will have to do so sometime, more so when it has to pay or provide for the tax. The surplus should be RM80m or more.
MFCB is back again! Results could be good ?? Could some expert enlighten please? Btw I am just signed up recently and hope to learn more from each other. Thnx
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This book is the result of the author's many years of experience and observation throughout his 26 years in the stockbroking industry. It was written for general public to learn to invest based on facts and not on fantasies or hearsay....
si4000
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Posted by si4000 > 2017-01-17 21:10 | Report Abuse
Buy too