MNRB- cheap & cheaper?

Results Update

MNRB reported a net loss of RM5.9 million for QE30/9/2011 recently. The loss was mainly attributed to the recent Thailand flood. This cut short the 6 quarters of good results.


Table: MNRB's last 10 quarterly results



Chart 1: MNRB's last 19 quarterly results

Valuation

MNRB is pretty hard to valued as its bottom-line fluctuates substantially. The randomness in its bottom-line has certainly put off many investors. We must fall back on Price to Book as a measure of how cheap this stock is trading now. Its current Price to Book is at 0.51 time (based on yesterday close of RM2.47 & its NTA of RM4.86 per share as at 30/9/2011). At that multiple, MNRB is deemed undemanding.

Technical Outlook

With the poorer financial performance, MNRB's share price took a dive. Yesterday, MNRB broke below its "horizontal" support at RM2.35 when it hit an intra-day low of RM2.33. However, it managed to close above the support at RM2.47. This morning, MNRB inched higher to close the morning session at RM2.51 on small volume of 1159 board lots. Will there be another test of the "horizontal line"? Probably. If this support failed to hold up the stock, MNRB may test its next "horizontal line" at RM2.00.


Chart 2: MNRB's weekly chart as at Dec 13, 2011_11.00am (Source: Quickcharts)


Chart 3: MNRB's monthly chart as at Dec 1, 2011 (Source: Tradesignum)

Conclusion

Despite trading at a very low Price to Book, MNRB has hardly attracted investors' interest due to its uncertain financial performance. Its technical outlook is equally uncertain. While it may find support at the "horizontal line" RM2.35, the safer & stronger "horizontal" support is at RM2.00. That may be a better entry level to this fair-weather stock.