Very difficult to buy at 0.23 due to huge queue buy at ~0.25! couple with low equity and strong holding of major shareholder. I sold part of holding at 0.275 and still queue buy for long time at 0.25-0.255
Aetas Damansara up to 55% taken up which is launched last Nov...if up to 70% sold by year end, then MCT will rake in decent profit from it...Overall MCT will post commendable fin result for 2021 and 2022
Let's forget above the glove company....the oil & gas company....the oil palm companies......With my years of investment experiences.....this is definitely one of the very few gems available in Bursa. Will add to my investment portfolio.
Hi snowball, to be honest, you'll be looking at a good result for MCT in the 4th quarter results, this next 6 months, the results will be so so only.
Please verify on your own, what is said.
To answer you, interest cost, this is due to the loan MCT took from Ayala in 2018/2019 like that, around 120m++ USD, interest rate around 6%, that's why every year need to pay ~32million in interest.
Why so much loan (500+m MYR) vs low level of sales, I believe they used the money to rush out the completion of projects back then, after those projects were completed around 2020 (When MCT recorded one of their higher profits) of course Covid comes, and it effected their new launches, imagine if without covid, Aetas and Alira were launched 1 year earlier, and at this time, the revenue from these two projects (or more projects) would be just nice to cover the interest and generated profits.
Worst of all, after the intercompany loan is approved, goverment implemented taxation on intercompany loans, whereby, interest paid to controlling shareholders is not tax deductible expense. Again, got hit not only by interest, you'll also got hit by taxation as well. MCT's tax rate is insanely high... 30 to 40% ish? I didn't really verify the exact percentages for you...
That's the bad news, but having said all of that, this is where the better news is coming in.
If you check 2020 Annual Report, their unbilled sales is ~RM 320m If you check the 2021 Annual Report, (EVEN AFTER BILLING minus RM 320m sales), they still have UNBILLED SALES of RM 510m!
Basically, in the year 2021, with covid, with lockdown, MCT sold RM 510m of new homes! Impressive numbers...
This RM 510m sales is from Aetas, Alira, Casa Bayu, which for aetas and alira, is only in the unbillable constructions stage unfortunately. Aetas will hit their residential unit construction in the 3rd quarter, while Alira probably will bill the first 10% in December (assuming foundation works takes a year)
Back to your interest topic, the MYR 500m + loan this figure have moved from Long Term Liability to Short Term Liability in Dec 2021 QR, which means, yes, this pain in the ass Loan/Interest/Tax payment will be replaced with local banking borrowings, that is more realistic with the current activity level, and at a lower interest rate amount as well.
Yes, like that loh, if you're entering now, it's really a good good point to enter, Net Asset 50+ cents, but, please, do prepare to hold up to minimum 6, ideally 9 months for this investment to turn around :(
I wouldn't want you to buy and cut loss in the next 1 to 3 months. Myself also in the boat, and plan to see it through til year end.
Oh ya, forgot to mention, in 2021, MCT loss about MYR 22 million to their construction subsidiary, (Remember, MCT used to have their own in house construction team) to build their projects before 2020.
Again, this is where the good news comes in, MCT have since fully sub contract construction works out, so, YoY, it's not likely to incur the -22m loss from their construction department.
So, that's the frank story of MCT, good entry if you have the patience, or if you can accumulate on a monthly basis until their year end.
But again, will subject to near term risks for the next 6 to 9 months :(
Post a Comment
People who like this
You should check in on some of those fields below.
Click Confirm to delete this Forum Thread and all the associated comments.
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....