Earnings wise, both companies are similar. One sells medium density, another one deals with chipboards. Chipboard is just another iteration of low density chipboards. It all boils down on the type of building materials contractors need and what furniture makers want. Raw materials cost will keep going up no matter what. Hevea is obviously the worst since revenue is only 127 million There's one caveat to this. Chipboards are generally much more versatile than plywoods as it is both more environmentally friendly and flexible than the stronger, sturdier plywoods. ESG-wise, Mieco and Evergreen is a strong winner.
Furthermore, based on supply chain analysis, the biggest customer for Mieco is obviously Seng Yip Furniture and Spring Art Holdings. Furniture stocks have been doing great until recently. Mieco will continue to outperform under the right market condition as it slowly tracks its industry peers such as Century Plyboards India (currently trading at 47.61x PER) and Greenpanel Industries Limited (trading at 32.01x PER). However, these are the competitors since they manufacture plywoods, not chipboards.
Technical wise, insiders bought close to 1% of the total volume. There only exists 19 other companies with similar profiles based on extensive screening such as positive earnings, sector cyclicality and more.
Therefore, my short term price target for Mieco Chipboard remains at RM1.20 based on ratios and earnings-driven indicators. If all catalysts align with the macroeconomic factors/trends and with a possible market risk-on sentiment happening in second half of 2022, Mieco could hit
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....