MNRB Holdings Bhd ('MNRB') is involved in re-insurance as well as in takaful insurance. In Malaysia, there are presently 5 reinsurers and 2 full-fledged retakaful operators (plus one branch retakaful operation).
Recent Financial Results
MNRB's recent financial results has been very erratic. For QE30/6/2010, MNRB managed to turnaround & chalked up a net profit if RM26 million on a turnover of RM387 million. MNRB was not impact by any significant provision for impairment loss & exceptional insurance claim during the quarter. Higher turnover is attributable to increase in gross premium written by re-insurance subsidiary.
MNRB expects to achieve good results for FYE31/3/2011.
Table 1: MNRB's last 10 quarterly results
From the chart below, we can see that MNRB's turnover has been growing steadily while its net profit could be due for an upswing.
Chart 1: MNRB's last 14 quarterly results
Valuation
MNRB (closed at RM2.70 yesterday) is now trading at a PER of 6 times (based on its last 4 quarters' EPS of 44 sen). In addition, MNRB is trading at a Price to Book of 0.6 time only. Based on these multiples, MNRB is deemed very attractive.
Technical outlook
Since its listing, MNRB has been trapped within a giant triangle, with resistance at RM5.10 & support at RM2.60. Presently, MNRB is trading at the support, which should be a good entry to this stock.
Chart 2: MNRB's monthly chart as at Sept 1, 2010 (Source: Tradesignum)
Conclusion
Based on attractive valuation & good technical support, MNRB could be a good stock for long-term investment.
9 comments:
Hi Alex,
Recently I bought some Daiman shares. I notice that Daiman has very high Net Asset per share value (RM4.45) and yet the share price is always wandering around RM1.60 to RM1.75 . The share give good dividend too (around 6%) and it is debt free.
May I know whether I have overlooked other factors that might prohibit the share price from moving up.
Thanks,
eamcsy
Dear Alex,
Despite recent spate of good good, really good news flowing, DRBHcom doesn't still to *move* as much as we all wished to. Part of the reason that was seen were those almost daily shares disposing from EPF.
Why does this happen & any thoughts from you? Thanks for ur insight.
Dreamliner
Hi Alex,
Could you please share your views on ECM Libra ?. Thks.
Hi SY,
I can understand your frustration. Daiman is a property developer with solid financial position but poor financial performance.
Its financial position is so strong that it has no bank borrowing and net current assets of RM375 million. Amongst the current assets is short-term investment of RM248 million. This takes the form of managed funds & portfolio investment. If this money is distributed to the shareholders, each share will receive an amount of RM1.17.
As noted, its financial performance is rather poor. While it's a profitable company, its ROCE is a meager 3-4%. EPS for FY2010 is at 14 sen.
At the close of RM1.69 yesterday, Daiman is trading at a PE of 12 times. However, if we deduct the cash tied up in short-term investment, the adjusted share price is only 52 sen. At that price, the PE is only 4.3 times. Another valuation metric to use is Price to Book which is at 0.4 times.
All in all, Daiman is a cheap stock that is waiting to be discovered. If the management is more proactive in its capital management (by carrying out capital repayment), the stock may attract more investors' following & see the share price rising to a level that may reflect its true value.
Hi Dreamliner
As noted in my recent post on
TWS- a good long-term investment , Syed Mokhtar's group of companies has nagging corporate governance issues due to frequent related parties transactions. DRBHicom is also a lost child within Syed Mokhtar's large empire. Its recent financial results is however encouraging with pre-tax profit of RM223 million. After excluding a negative goodwill of RM71 million, its operating profit is fairly substantial at RM152 million. If it can maintain this level of operating profit, it may hit a full-year EPS of 20 sen. As such, DRBHicom (closed at RM1.12 yesterday) is now trading at a reasonable PE of 5.6 times.
I have missed the "good news flowing" on DRBHicom but if it can maintain its steady financial performance, the stock should finally put in a decent rally. For long-term investors of this stock, that kind of "good news" is long overdue.
Hi qian qian
I don't follow ECM Libra. Like Kenanga, its results is quite pathetic. It made a EPS of 0.9 sen for 1Q2011 (QE30/4/2010). If this persists, it would record a full-year EPS of 3.6 sen. At the present price of RM0.68, its PE is at 19 times. This means its upside is very limited as it's fully valued.
Technically speaking, ECMLibra has a strong resistance at RM0.75. Its support is at RM0.60 or RM0.65.
hi alex. many ppls think to buy BJCORP at current price and hold it. can bro analysis the BJCORP financial fundamental ? is it worth to buy now and hold for it ?? it there any upside for this stock ??
thx bro.
The Dividend yield for MNRB is calculated to be at 14.8% if we based on annual payout of 40cent at current share price at rm2.70.
Is the above correct?
Hi Marco
MNRB's dividend dropped from 46 sen in FY2007 to 40 sen in FY2008 and then to 10 sen in FY2009. In FY2010, MNRB did not pay any dividend (when its EPS was 22 sen).
What's MNRB's dividend payout policy? It seems that MNRB's dividend payout is about 50-55% of its earning, provided the economic outlook is not negative & the financial performance was not below par. Based on this & the projected annualized EPS of 44 sen, MNRB's dividend payment for current year could be about 22 sen. From this, dividend yield can be computed to be 8.1%. While this may look very attractive, we must bear in mind that this is just a projection.
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