Chart 1: NARRA's daily chart as at June 13, 2014 (Source: Tradesignum)
Chart 2: NARRA's weekly chart as at June 13, 2014 (Source: Tradesignum)
NARRA is in the midst of a restructuring which will turn it into an attractive cement stock.
The proposed restructuring of NARRA Industries Bhd involves:
1) A 2-to-1 capital reduction to be followed a 2-to-1 share consolidation2) Acquisition of 100%-stake in Hume Cement from HL Manufacturing Group and 175m ICPS in Hume Cement & 100%-stake in Hume Industries from HLInd. These acquisitions will be settled by issuance of 448m new shares.
By owning 100%-stake in Hume Cement, NARRA will become a
cement stock. Hume Cement currently owns a cement plant in Gopeng, Perak which
commenced operation last year. It has clinker capacity
to 1.5 mtpa and cement grinding capacity of 1.8 mtpa. It has
recently received Environmental Impact Assessment approval for its next phase
of expansion which would double its output.
Based on RHB report in February, NARRA’s earning is expected
to jump in FY15 when the full impact of the acquisition of Hume Cement &
Hume Industries will be booked in. Its total revenue will increase to RM743m while PBT &
PAT will increase to RM97m & RM72.5m, respectively.
RHB valued NARRA at RM2.27 basing on a PE of 15x FY15E
(which is at a discount of 15% to its West Malaysia
peers).
Based on RHB's valuation and technical projection, NARRA is deemed a good trading SELL for those fortunate enough to get in earlier.
Note:
In addition to the disclaimer in the preamble to my blog, I hereby confirm that I do not have any relevant interest in, or any interest in the acquisition or disposal of, NARRA.
8 comments:
Hi Alex,
I would like to seek for your opinion on MNRB.
Personally i think MNRB is a good stock for long term investment. The NTAB, earning and also dividend given is quite impressive.
I am surprised to see that with MNRB strong earning and also it's whole package, the current price still below RM5 comparing with others.
I think it fair value should be ~ Rm8-9, what is your thought?
Thanks
Ahtoo
Hi ahtoo,
This stock, MNRB has been cooking for a long while. Your target of RM9 looks farfetched now but I won't rule that out. I think RM6.00 is a more likely target but we will see.
Good luck.
Hi Alex,
Thanks for your feedback.
Let's wait and see.
Have a good day.
Thanks
Ahtoo
So what your comment for narra as it fall back afterward,do u thk Narra still got space to rise?or save to hold?
Thx u>>>
Hi Alan Khaw
I doubt Narra will go higher. It may just hang around the present price (RM2.00-2.30) and then goes into the restructuring exercise. As I said, it is a SELL at RM2.50 or there about.
Thx Alex,so how bout Mas3786 from your experience?can it reach 0.30?
Thx u~~
Hi Alan Khaw
We will always be fascinated by planes and, of course, MAS. The longer you look at it, the more tempting it becomes. My advice is to walk away.
Technically speaking, MAS is a trading SELL at RM0.28-0.30, if it ever reaches that level. If it doesn't, it is still a stock to be avoided.
Thx alex
talk about Narra,i bought it at rm2.49,should i cut loss by nw or juz waiting as it keep falling down this few day,need ur opinion,thx~~
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