Page34 BUDGET 2022 – DISCUSSION ON IMPACT TO MFCB MEGA FIRST CORPORATION BERHAD – NOV 2021 34 A. “Cukai Makmur” This is a special one-off tax for Malaysian companies for YA2022. The first RM100 million of taxable earnings will be taxed at 24% while the remainder will be taxed at 33%. Preliminary impact assessment: None.
B. “Foreign Source Income (FSI)” FSI received in Malaysia from 1 Jan 2022 until 30 June 2022 (transition period) will be taxed at 3% on a gross basis. FSI received in Malaysia from 1 July 2022 onwards would be subject to tax based on the prevailing income tax rate (currently 24%). Preliminary impact assessment 1. Dividends repatriated from overseas subsidiaries on and after 1 January 2022 will be subject to income tax. 2. Availability of DTA relief. 2. Management is still in the midst of engagement with tax consultants and lawyers on available options.
Short term mitigating measures: 1. Maximise dividend repatriation before the end of 2021. 2. Minimise future dividend repatriation from overseas subsidiaries on “need-to” basis
Expect a net profit of 4%-6% on the oleocchemicals ,oils and fats business of up to 3B revenue or a contribution of 120M-150M to its bottomline. This can be seen from KLK's of 10.8B revenue and a profit 0f 680M. Even smallish CI Holdings able to do 3B business with a profit 0f 120M
I guess the main reason why investors are selling is because dividend wasn't declared in this quarter. Hence, there will be a discount on the valuation. Mr. Market values MFCB at PE of 10+, by estimating the EPS of the next quarter (excluding one-off gain), RM3.5 - RM3.6 should be the fair value "NOW".
It is going to go sideway for sometime, I dont know why people are mad, only traders are mad, long term investor knows this is good as you have the opportunity to slowly buy more shares. I hope it goes sideway for 1 or 2 years and then fly. I need time to buy more.
2022 - Oleo exercise is expected to be completed in January 2022, 12 months to turnaround.
2023 - Construction of an RM100m mega packaging factory sitting on a 10.4-acre plot of land will be completed by 2023.
2024 - Construction of the 5th turbine, which will cost about RM200m-250m, will start in the next dry season (late-2021) and is expected to be commercially operational by Q3-2024.
2026 - The plantation group is still exploring various downstream processing businesses and it does not expect any positive earnings contribution until 2026.
Note - MFCB 90+% of the earning is from oversea and is tax exempted by Laos Government (5 years from 01/10/2020) - Normally, the water level will peak between June to November during the wet season.
MFCB flat for over 1 year without any gain in price.Company needs to pay more interim dividend to staunch the flow of selling from disillusioned holders.It is bad capital management to keep too much cash when it could be used to placate long term holders and attract new institutional funds
It will increase the attractiveness of holding MFCB if it makes 3 dividend payments a year of 3c x2,final 4c for a total of 10c or 100m which is less than 30% of the company's annual free cashlow
so far these additional investments is taking up to a maximum of 200M .There is still 200M for additional dividend which for a 10c payout is only 100M ,still leave 100M for working capital and loan reduction
I dont want dividend, if I want dividends, I know which counter to invest. I want them to use the money to either pay down the debt or go expand into new business. growth earnings is what I want. grow the company.
Stock price dont always go up, sometimes down and sometimes flat for a few years, you go look back at QL, PBB, UTDPLT and etc.... there are times when the price is flat for years and then it moves up.
I know it is run of river type of hydro. But during raining season there are more water than dry season, thus they have peak and none peak season. earnings wont be too far off peak because during wet season they will shut down 1 plant for servicing, but during dry season all plant will run.
wtf... i hope this is real, yet to read the qr... hopefully something good. i invested rm1m in mfcb. i will hold this stock long term, good management.
2021 vs 2020 Group pre-tax profit rose 38.6% from RM389.3 million to RM539.6 million, in part due to RM122.0 million share of profit in joint venture. Excluding the share of profit in joint venture, pre-tax profit grew 7.3% to RM417.6 million The share of profit in joint venture was boosted by the Group’s share of unallocated bargain gain arising from Edenor’s acquisition of EOM and ESC.
2021 - Construction of 5th turbine starts late Dec 2021 on dry season. - Acquired Stenta
2022 - Oleo [ 300,000 tonne ] exercise is expected to be completed in January 2022, 12 months to turnaround. 1.5B potential yearly revenue, profit margin estimated to be about 5 to 10%, which comes to about RM9 to RM18 million per quarter. - Solar Power C&L - 6.3MW Jun/July 2022, 19.0MW over the next 18 months
2023 - [ Hexachase ] Construction of a RM100m mega packaging factory sitting on a 10.4-acre plot of land in Melaka will be completed by 1H2023. - [ Hexachase ] 2021/2022 new production capacity is expected to reach max capacity by 2023. - [ Stenta ] Construction of a 6.7 acre land factory, when completed will add 8 LLDPE and 1 CCP line.
2024 - Construction of the 5th turbine, which will cost about RM200m-250m is expected to be commercially operational by Q3-2024.
2025 - Coconut and Macadamia planting to be completed by 2025
2026 - The plantation group is still exploring various downstream processing businesses and it does not expect any positive earnings contribution until 2026.
Note - MFCB 90+% of the earning is from oversea and is tax exempted by Laos Government (5 years from 01/10/2020) - Normally, the water level will peak between June to November during the wet season.
Open Question : What are the ramifications of a sustained $100+ oil price for MFCB for a couple years to come (very likely given the tremendous oil shock that is coming into play regardless of Ukranian war development)?
IMO the resources, oleochemical, and packaging sectors will be affected, and I am not sure they are able to pass down the cost increase in any of the three divisions, what will mean margin compression down the road
this is what we called diam diam ubi berisi. as far as I know mfcb rarely announce about the solar project.u can follow it from interview and qr report.
I did not agree about this. I am not sure whether company should announce all contracts to Bursa ? if yes, they better do so, just to follow the rule and regulations !
Am not sure what are the rules and regulation, if every single project needs to announce, then everyday we will be receiving endless info. I am very certain the management knows what they are doing and not breaking any law.
The only company that announced every single tiny project they won is Serba, SCIB and KPower. Every month sure got announcement, win this win that win so many projects, even tiny longkang project also announce.
There are rules on continuing disclosure (Chapter 9 of Listing Requirements). It's a JV, the financial impact isn't material enough to warrant immediate announcement.
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C 88
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Posted by C 88 > 2021-11-24 06:40 | Report Abuse
Page34
BUDGET 2022 – DISCUSSION ON IMPACT TO MFCB
MEGA FIRST CORPORATION BERHAD – NOV 2021 34
A. “Cukai Makmur”
This is a special one-off tax for Malaysian companies for YA2022. The first RM100 million of taxable earnings will be taxed at 24%
while the remainder will be taxed at 33%.
Preliminary impact assessment: None.
B. “Foreign Source Income (FSI)”
FSI received in Malaysia from 1 Jan 2022 until 30 June 2022 (transition period) will be taxed at 3% on a gross basis. FSI received
in Malaysia from 1 July 2022 onwards would be subject to tax based on the prevailing income tax rate (currently 24%).
Preliminary impact assessment
1. Dividends repatriated from overseas subsidiaries on and after 1 January 2022 will be subject to income tax.
2. Availability of DTA relief.
2. Management is still in the midst of engagement with tax consultants and lawyers on available options.
Short term mitigating measures:
1. Maximise dividend repatriation before the end of 2021.
2. Minimise future dividend repatriation from overseas subsidiaries on “need-to” basis