MBMR: Earnings rose y-o-y

Results Update

For QE31/3/2019, MBMR's net profit dropped 17% q-o-q but rose 51% y-o-y to RM50 million while revenue rose 7% q-o-q or 15% y-o-y to RM532 million. Revenue increased mainly due to better performance from both the Motor Trading and Auto Parts Manufacturing Divisions, as well as better results for both the joint venture and the associates. The Group's share of results in its joint venture increased by RM0.5 million or 16.3% to close at RM3.9 million mainly due to higher demand. The Group's share of associates' results increased by RM6.0 million or 16.4% against the corresponding quarter to close at RM42.8 million.


Table: MBMR's last 8 quarterly results


Graph: MBMR's 52 quarterly results

Financial Position

As at 31/3/2019, MBMR's financial position is healthy with current ratio at 2.4 times and gearing ratio at 0.15 time.

Valuation

MBMR (closed at RM2.80 yesterday) is now trading at a PER of 6 times (based on EPS of 46.7 sen). At this PER, MBMR is fairly attractive.

Technical Outlook

MBMR broke above its downtrend line, RR at RM2.30 in January 2019. It rallied all the way to test the horizontal line at RM3.00 before pulling back. Now it is resting on the horizontal line at RM2.80.


Chart 2: MBMR's weekly chart as at May 23, 2019 (Source: Malaysiastock.biz)

Conclusion

Based on satisfactory financial performance & healthy financial position and positive technical outlook, MBMR is a good stock for long-term investment.

Note:

I hereby confirm that I do not have any direct interest in the security or securities mentioned in this post. However, I could have an indirect interest in the security or securities mentioned as some of my clients may have an interest in the acquisition or disposal of the aforementioned security or securities. As investor, you should fully research any security before making an investment decision.