Good morning.
Today, we feature a note on Muda Holdings Berhad in our FundTech Radar – 15th May 2018. The company is in the manufacturing of industrial paper and paper packaging products and also operates more than 100 school bookshops in Singapore. In FY17, total revenue was made up of 88.3% local market.
Fundamental Stance
· Good 3-year (FYE15-17) revenue and core PATAMI CAGR of 11.3% and 30.2% respectively.
· Its FY17E core PATAMI margin inched up to 2.5% (vs. 2.2% in FY16).
· Net gearing ratio rose.
· Consistently pay dividend since FY1996. Div. yield was 1.3% while div. payout was 29.3% in FY17.
· Muda has budgeted a capex of RM100m for 2018: (1) A new corrugating line could potentially increase Muda’s corrugating plant capacity by 12.5%; and (2) the new capacity of the paper mills could potentially rise by 2% and is expected to come on stream in the second half of 2018.
· The current downtrend in the waste paper price is an added advantage for Muda.
· The ex-date of the first and final single tier dividend of 3.5 sen per share is on 27th June.
· Currently trading at 23.4x 12-month trailing P/E, a 170.2% premium compared to its peers
Technical Front
Both Triangle and rectangle formation breakout.
Resistances: 3.12/3.52/3.80
Supports: 2.45/2.06/1.79
The above information is extracted from CIMB Research Report. For the full research reports, outlook and disclaimers, please logon to your account on www.itradecimb.com.my and click on <Research> Tab under Malaysia.
This FundTech Radar report is intended for educational purposes only. It represents a preliminary assessment of the subject company, and does not represent initiation into CIMB's coverage universe. It does not carry investment ratings and CIMB does not commit to regular updates on an ongoing basis.
15th May 2018
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