Annual Report 2014 Analysis
- EPS's CAGR from year 2010 to 2015 has a decent result with 25%.
- Average Free Cash Flow Yield (CY) also attractive with 10%.
- Profit margin is near my criteria to pick stock, RM1 of sales earn RM0.06 of profit.
- Dividend payout of Magni maintained at 30% above. This mean each RM1 of Magni earns will distribute RM0.30 of dividend to share with shareholders.
- Cash of Magni is snowballing by annually. And Magni contain 0 borrowing. This is my criteria to pick stock.
- Net cash or cash per share of Magni equal to RM0.69.
- ROE of Magni is growing from year 2011 to 2014. ROE in year 2014 has a desired result, which is 17.86%. Good management team can be bearing in mind with this level of ROE.
- Q3''2015's PE is exclude last quarter of year 2015. With three quarters of result make PE of Magni near 10, this is very good.
- Cumulative last four quarter of EPS will get PE of 8.57 at current price. Company below PE 10 is one of my criteria to pick stock.
- DY of Magni is higher than the fixed deposit rate in bank. Good investment compared with deposit.
- Trend of EPS is growing within 5 years. Magni keep an uptrend spot on it.
- Par value of Magni is perfect 1, high probability to going split or bonus issue on stock if the price is going higher and highest.
- My valuation model giving Magni the intrinsic value of RM4.23, current price has 17% margin of safety and 22% of upside potential. There is absent of target price on Magni from any investment banks.
- Magni is a long term investment stock. Its DY is fit for doing long term investment.
Annual Report 2014 Analysis
- Main business of Magni is packaging and garment. Garment is the principal business.
- Manufacturing and sales of garments is 81% of total revenue in year 2014. Others 19% is manufacturing and sales of packaging materials.
- The packaging products are typically used by the manufacturing sector, especially the electronic as well as the food, beverage, healthcare and tobacco sub-sectors.
- Group maintains a cautious outlook for the next financial year ending 30 April 2015.
- Tan Kok Aun, who is the Executive Director of Magni is decreasing his shareholding from 1,819,481 or 1.68% to 1,689,481 or 1.56% within 9 months.
- South Island Garment Sdn. Bhd (SIG), Inter-Pacific Packaging Sdn. Bhd, South Island Packaging (Penang) Sdn. Bhd and South Island Plastics Sdn. Bhd are subsidiaries company of Magni.
- With more than 38 years of experience in the apparel industry, SIG has built a good reputation in this industry and is known among its customers as a reliable and consistent manufacturer of high-quality and sophisticated woven sportswear.
- Trade receivable and mainly part of RM and US dollar, both is 40% and 54% respectively.
- Magni's cash on hand is accounted to RM3, 674,000 and others RM71, 059,000 is put in deposit with banks. In process to seeking other opportunity to expand business, banks’ deposit maybe is a good way to increase slightly on cash.
- Company’s two business segments operate mainly in three geographical areas, which are Malaysia, Vietnam and China. Operation in Malaysia principally manufacturing and sales of packaging materials and garments while operation in Vietnam and China are principally manufacturing and sales of garments.
- Compare quarter result of Q3''2014 and Q3''2015, there is an increase of 7.11% in revenue and 17.84% in EPS.
- On the other hand, cumulative result of 9 months or 3 quarters in year 2014 and 2015 is increased of 10.40% in revenue and 6.32% in EPS.
- Packaging seize the three quarter of revenue in year 2015 by 17% and others 83% is contributed by Garment manufacturing.
- Key factors that affect the performance of garment business include mainly the labor costs.
- Key factors that affect the performance of packaging segment include mainly raw material costs (Kraft liner, test liner, medium papers, paper boards, polyethylene resins and etc.)
- Profit before taxation (PBT) for the current quarter increased by 16.3% mainly due to higher revenue and other operating income.
- The Group maintains a cautiously positive outlook for the remaining quarter of the current financial year.