Quarter report released date: 23 Feb 2017
Business
- paper milling and packaging
- manufacturing activities are mostly centred in Peninsular Malaysia
Management team
- Dato' Lim Wan Peng, Executive Director
Factories
- Tasek, Penang
- Petaling Jaya
- Qingyuan, China
- 2 factories for paper milling
- 4 factories for making corrugated boxes
- a factory for multi-wall paper bags
- a factory for PE laminated paper, paper bags and paper-based stationery
Products
- brown paper
- paper boards
- corrugated boxes
- multi-wall paper bags
- PE laminated paper for industrial and food application
- flat, satchel and self-opening-style paper bags for food and non-food retail outlets
- paper pallets and honeycomb for packaging and furniture industries
- paper-based stationery
- trading in imported paper and paper related products for the domestic and export market.
Financial performance
- Revenue increased 3.87% yoy, 28% qoq
- Revenue hit new high
- Net profit increased 82% yoy
- 3Q FY16 suffered a net loss, due to write-off of inventory, warehouse and other assets following a fire accident
- 4Q FY16 already received progress payment from fire RM9mn, other income RM4mn
- If deduct progress payment and other income,net profit decrease yoy
- revenue from the Manufacturing Division has improved by 8.8%, mainly attributable to better selling prices of industrial grade paper and paper packaging products. The above improvement was complemented by higher sales volume.
- Revenue from the Trading Division contributed about 80% of the increase, due to peak season for school bookshop operations in Singapore.
- Demand for paper packaging products during the festive season resulted in 7% increase and industrial grade paper
Share price
- RM1.76 (15/3/2017)
- PE:28.53
Strength
- the paper mills benefited from a weaker ringgit, as imported paper became more expensive
- The current tight paper supply situation in China will reduce availability of imported paper in Malaysia and boost the demand and selling price of the Group’s paper.
- the above favourable factors will be partially offset by increased costs in the Manufacturing Division.
Weakness
- The weakened ringgit and volatile exchange rates resulted in a 10% reduction in revenue
- The reduction of electricity rebates and increase in the gas tariff by an average of 17% in January 2016 has immediate impact on the Group’s production cost (annual report2015)
- The imminent increase in minimum wages scheduled to be effective in July 2016 and a higher levy for foreign workers will further compress the Group’s profit margin. (annual report 2015)
* Weak Ringgit increase cost, Muda pass cost to increase selling price, plus tight paper supply in China also push local demand increase
Risk
- low profit margin, cost such as: enegry cost, minimun wage rate, weaken RM will either lower profit/ affect demand as Muda probably will increase selling price
- Low profit margin, personally think it is not deserve a high PE
Comments
- After review their revenue and net profit performance,personally think that the degree that Muda being affected by weaken Ringgit is lower.
- It is because start from 2014 until 2016, Ringgit against USD have been decrease all the way, however Muda's revenue and net profit keep increase
- Muda most probably transfer the cost to customer,increase selling price
- And due to weaken Ringgit,imported paper products became expensive to local customer and thus even selling price higher, local customer still demand from Muda
- There is not much effect on Muda regarding the exchange rate.
- Weaken ringgit I think is more better to Muda
* Personally would not invest in this company due to low profit margin and low dividend yield
News
15/11/2016
- 公司因廠房火災而注銷資產、倉庫和其他資產，導致本財年第3季轉虧
Reference
http://www.chinapress.com.my/20161115/%E7%AC%AC3%E5%AD%A3%E8%99%A71576%E8%90%AC-%E6%85%95%E9%81%94%E9%96%8B%E4%BD%8E%E8%B5%B0%E4%BD%8E/
留言列表
