Muda: A Surprisingly Strong 3Q24th November 2018
For QE30/9/2018, Muda’s net profit rose 118% q-o-q or 47-fold y-o-y to RM25 million while its revenue rose 8% q-o-q & y-o-y to RM381 million. Revenue rose mainly due to improvement in selling prices for industrial paper and paper packaging products. Compared to the corresponding quarter in previous year, higher segment profit in current quarter is mainly attributable to improvement in the selling prices and lower production cost in the Manufacturing Division with minor segment margin improvement in the Trading Division.
Table: Muda’s last 8 quarterly results
Graph: Muda’s last 50 quarterly results
Muda’s financial position is deemed adequate with current ratio at 1.1 times and total liabilities to total equity at 0.9 time.
Muda (trading at RM2.12 as at 3.15pm) is trading at a PE of 10.1 times (based on last 4 quarters’ EPS of 20.88 sen). At this PER, Muda is deemed fairly attractive.
Mudahas been trading sideways for the past 6 months between RM1.50 & RM2.20. If it can break above RM2.20 (on the back of the current good performance), it may charge up to the May high of RM2.86-2.90.
Chart 1: Muda’s daily chart as at Nov 23, 2018_2.50pm (Source: Malaysiastock.biz)
Looking at the monthly chart, Muda has strong resistance at RM2.35-2.50.
Chart 2: Muda’s monthly chart as at Nov 23, 2018_2.50pm (Source: Malaysiastock.biz)
Based on good financial performance and attractive valuation, Muda is a good stock for long-term investment.
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