Malayan Flour Mills Bhd ('MFlour') is involved in the milling of wheat flour, manufacturing of animal feed and poultry farming. Flour milling is the main profit contributor, while animal feed manufacturing reports a small profit & poultry farming reports a small loss.
Recent Financial Results
MFlour has just announced its results for 1Q2008 (QE31/3/2008). Its net profit increased by 10.8% q-o-q or 232% y-o-y to RM24.6 million. Turnover increased 0.6% q-o-q or 31.7% y-o-y to RM291 million. The increased net profit was attributable to better performance of the flour business.
Valuation
MFlour (closed at RM3.02 as at May 14th) is now trading at a trailing PE of 5.2 times (based on the past 4 quarters' EPS totaling 58 sen) or at a P/Book of 0.9 times (based on NTA per share of RM3.40). At these multiples, MFlour is deemed not expensive.
[Note: MFlour is an illiquid stock, which may not be easy to buy nor to sell. As at 10.00 am this morning, it is trading at RM3.20 on volume of 262 board lots. ]
Technical Outlook
MFlour is in a steady uptrend line, with support at RM2.70-80 level. Its recent high was RM3.22, which was made on February 29th.
Chart: MFlour's weekly chart as at May 13, 2008 (source: Quickcharts)
Conclusion
Based on improved financial performance, attractive valuation & bullish technical outlook, MFlour could be a good investment for the long-term. Good entry level would be at RM2.80-3.00 level.
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