Although live bird price has been dropping, wheat(ingredient for flour) has been dropping. Thus I think breakeven. After all the flour biz to poultry biz revenue ratio is 72:28 percent. So drop in poultry profit has minimal impact to the group profit. The most important driver is directors promised performance will improve significantly in 2019.
In fact the flour biz to poultry biz profit ratio is 79:21 percent. I'm sure if flour biz is flourishing, its increase in profit will easily cover the loss in poultry biz by a huge margin, making the poultry profit drop negligible.
Mflour has reduced the selling of whole chicken to wet market by increase the cut chicken to franschise company. As the management also aware the fluctuations of whole chicken price does impact the company's profit. Cut chicken is fix price as per contract and has better margin. So, dont have to worry much about the chicken price.
What you are worrying now has been resolved by the management.
it is just normal retracement. Some weak holder ppls may want to run. As the company fundamental is there, we dont have to worry too much. Time to give the fair value to its price.
rob_z3_man ,are sure today otb sell the share? I can confirm u are no otb member. I dunno y keep say otb selling ,and the fake news 0.600 (otb din no say ) , I think u want let ppl sell to u kut
U can go check at bursa Malaysia mflour, the share holder tan seri at Feb sell until now,the share price keep up,u only keep fake information because u early sell want buy cheap price
punter could it be because they are expanding aggressively thus the massive debt? haha. Bought the warrant at 40 then sold at 51sen as something wrong with their movement. but someone is collecting if u see past 3 months graph. Up then consolidate up then consolidate.
Live bird price from early of the year around RM 5.00 drop until RM 2.90 this week. According to source in Leong Hup their break-even for its live bird is around RM4.00-4.20. LH is alot bigger than M poultry and their BE stay around the range of 4-4.20, probably u can guesswhat is M poultry BE. With the huge CAPEX injection, huge depreciation, low bird price, I believe 2019 will be another year of loss making for its poultry division.
Flour Division stagnant, WHY? IF flour is doing so good why not they expand their flour business in Indonesia, as what I know they are just a small player in Indonesia(JV). Why allocate so much fund in poultry(>RM400mil)?
In short, flour business stagnant, poultry low margin WHY expand? Revise EPS 5.3cents(RM16.5mil*4/990mil OS+124mil*2 Mflour-LA).
I know you guys will challenge with the expansion will bring in more Revenue from poultry division, but bear in mind even the bird price at RM 5 M poultry is not making a good profit, but now bird price is around RM 3, do you think it will make profit?
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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....
huggs1
194 posts
Posted by huggs1 > 2019-04-11 08:53 | Report Abuse
in fact otb never say sell call on this stock