Share Price as at December 14, 2010: RM3.46
Distribution for FY2010 13 sen (50% dividend policy, YTD~41%)
Dividend Yield (%) 3.76%
Trailing 12-m P/E 9.61x
Average Historical P/E (2008 to present) 7.70x
Historical range of P/E (2008 to present) 5.18x – 10.40x
52 week High RM3.78
52 week Low RM1.99
Average Historical P/Book (2008 to present) 1.29
Historical range of P/Book (2008 to present) 0.74 – 2.26
Corporate Structure
Source: Company’s website
Management
• Datuk Pang Chin Hin, Chairman
• Datuk Pang Tee Chew, MD/CEO
• Datuk Pang Tee Nam, ED/COO
• Mr. Vuitton Pang, Business Development Manager
Source: Company’s website
Snapshot
• Established in 1971 as a manufacturer of dry noodle and instant vermicelli
• Listed on Main Board of Bursa Malaysia in 1992
• Malaysia’s leading manufacturer and marketer of a wide range of Food & Beverage products with 4 factories in Malaysia and 1 in Myanmar.
• Brands include Mamee Monster, Double Decker, Mister Potato Chips, Cheers, Nutrigen, Nicolet, Corntoz.
• Top market share among the snack food manufacturers in Peninsular Malaysia – approximately 31% share in February 2010.
• Actively serving more than 80 countries
• Non-core segment – oil palm plantation in Indonesia. Target to contribute to group revenue in 3 years’ time
Awards
• ISO9002
• ISO9001
• HACCP
Operational Highlights
• Launched “Rio Fiesta” orange and apple drinks to be sold in Malaysia and overseas
• Marketing support for new and existing products
• Additional warehouse in Melaka to increase capacity by 46%
• New building and machinery
Historical Financial Highlights
• Compounded Annual Growth Return over the past 5 years is 9.05%
• 9MFY2010 revenue y-o-y increased approximately 15.9% from 9MFY2009.
• Y-o-Y increasing trend of revenue seems to be maintained or better as several positive developments may act as catalyst.
• Geographically, main contributor is Malaysia followed by Australia, Singapore, Russia, Hong Kong and Netherlands based on 2009’s figure.
• Annualized PBT and Net Income margin for FY2010 are approximately 12.5% and 9.72% respectively dropped slightly from FY2009 13.48% and 10.78%.
Q-o-Q Revenue
• FY2010 quarterly revenues seem to be stable at a higher level compared with FY2008 and FY2009. Imagine the new developments start to kick in, what will be the result?
• Free cash flow remains healthy after RM10mil CAPEX in 3QFY2010
• Gearing – net cash. As at 3QFY2010, cash was 64.613m and no borrowings. However, we should consider that the new borrowings will be occur in FY2011, which is the 50% of 100mil capex.
*FY2010 figures are annualized. If new developments bring positive contribution to the top and bottom lines by FY2011, all percentage terms will not be the same. It may appear to be different from what we expected.
Risks
• Cost of raw materials increase.
• Business risk - Non-core segment – oil palm plantation. Contribution remains uncertain.
Technical Configuration
• Broke below the intermediate upward trend line in October 2010.
• Formed lower highs hinting at a short term downward trend.
• Indicators are mixed.
• Symmetrical triangle is brewing along with decreasing volume.
My view is neutral on the share price until it breaks the symmetrical triangle.
Reason to be positive
• Launched “Rio Fiesta” orange and apple drinks to be sold in Malaysia and overseas few weeks ago
• Additional warehouse in Melaka to increase capacity by 46%
• New building and machinery
Increase capacity may improve volume efficiency of production by end of 2011—as well as increase top and bottom line??????
• The company announced 50% dividend payout policy in April 2010. YTD distributed dividend is about 41%. Hopefully, there will be a surprise for this coming 4Q2010. • Top substantial shareholder remains the Pang family. Direct interest increased from approx. 61.42% as at 6 April 2010 to 63.6% recently. Position of the family may indirectly reflect how keen they are on the new developments and the company business???
• Although technical-wise I view it as neutral, all these catalysts may bring back the interest of the counter.
• Mix of different market cap counters – average P/E among them = 13.51x
As MAMEE’s average volume for the last 30 days is the third largest among the companies and yet lower than LONBISC and F&N.
Majority counters are overvalued based on the comparison between price and book value per share. Thus, I personally don’t think it is applicable.
MAMEE’s historical highest P/E was 10.40x, which was above the historical trailing 12-m P/E. If 13.51x times annualized FY2010 EPS 32 sen, Mamee should price at RM4.32.
If 10.40x times annualized FY2010 EPS 32 sen, Mamee should price at RM3.32.
If 9.61x times annualized FY2010 EPS 32 sen, Mamee should price at RM3.07.
Then, I have a view that Mamee should range between RM3.07 and RM4.32.
Encouraged by all the catalysts n facts, by now, you should have your own view of how far MAMEE can go!
No comments:
Post a Comment