HSR or NO HSR, will does NO IMPACT anymore to MRCB! For now, the China investments will be the focus for now. China can either borrow money to Malaysia to settle to debts issue or have a consensus over some collaboration in some investments with Malaysia. I believed this will contribute even more lucrative and revenues to our country for now. As for the HSR, it will help to enhance the route in between of Singapore with Malaysia and through the speed highway, the contribution need to be far greater than just accommodating Singapore alone. It need to help Malaysia in income growth too!
The June to Sept 18 quarterly result marks the 12 consecutive quarter losses for the company. Out of the last 20 quarter results, the company only managed to deliver a small profit in 2 quarters (4Q15 and 1Q14). Those thinking that the company can suddenly turnaround and start to post profit in 2019 might be putting too much hope on the management’s abilities. Expect further losses in FY19.
Looking at the balance sheet, we can see that the company is facing some liquidity issues in the near term. With current liabilities of RM30.6mil (of which RM13mil are in debt) and with a current asset of only RM4.7mil (of which cash is a mere RM180k), the company will need to raised more capital soon in order to pay off their immediate obligations. Given the current obligation amount is twice of its current market cap, it would most likely need to raise the capital via a right issue exercise.
If you are looking to diversify your portfolio outside of Ire-Tex (due to its weak earnings outlook and liquidity issues), I would recommend you to look at MBMR.
MBMR is a direct proxy to Perodua via its 22.6% interest in the company. Valuation is cheap at only 6.9x PE (based on target FY18 profit of RM145mil. 9m profit is already RM106mil). PB is low at only 0.7x BV. 4Q18 results is expected to be higher than 3Q18 and last year's 4Q17.
FY19 growth will be driven by the still high demand of the new Myvi and the newly launched SUV Aruz and also the newly revamp Alza in 2H19. The recent announcement of closure and potential disposal of the loss-making alloy wheel manufacturing business alone is expected to boost the company’s profit by an additional RM20mil. I am projecting a profit to shareholder of RM170 mil for FY19 which at the current price values MBMR at only 5.9x PE.
Please go through the analyst reports (https://klse.i3investor.com/servlets/stk/pt/5983.jsp) and do your own analysis before making any decisions. There are 8 analysts in total covering the stock with most of them having a TP of above RM3 (all have a buy rating). The average TP for the 8 analysts is around RM3.50.
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....
cicakman
6,100 posts
Posted by cicakman > 2018-04-23 17:52 | Report Abuse
What counter brother?
Can share please.Can I become your follower.
Add me in your chat list can lah?
Ehemmmm...vrooooommm.!