MINHO (5576) - Minho - Asset Logged
- Klin Drying and Chemical Preservative treatment
- Manufacturing, exporting and dealing in moulded timber and it's related product
- Export of processed timber products
- Manufacturing and distribution of industrial paper bags
- Trading in log supply and it's related products
- Log harvesting
- Property development and building construction
- Manufacturing and dealing in furniture components and it's related product
- Land leasing
However, with all the diversified services and product, Minho still derived it's major revenue from the timber trading and manufacturing of processed timber goods.
With the current local market outlook on massive completion of housing projects that will be handling over in 2015 to 2017, and the international market outlook with a stronger USD and the on going European Stimulus program, where can it leads to for Minho?
Minho had been consolidating at the range of RM 1.00, prior before the previous equity shake off that brought the share price tingling at the range of RM 0.80 without any significant volume. While 2014 had been a challenging year, however, Minho still managed to scrap through the year with a total revenue of RM 238 million.
Minho could be poised to challenge towards RM 1.00 in the coming day, anticipated with a better quarterly earning from it's property billing in Klang and the resumption of log harvesting in 1Q 2015 that will be able to boost the revenue further.
Pull Factor from Local Housing Completion
There
will be much handover in the housing project from starting from year
2015 to 2017 / 2018. With this in line, there will be a good pull factor
for the demand in in house furnishing as well as electrical appliances
in the local front.With a number of the projects that come with fully furnished, this will further add up on the local demand for the furniture and fittings, hence giving the local timber sector a good boost.
Minho being a integrated timber player in the industry, catering for the local and international market, will definitely see benefit from the local demand.
Strong Underlying Assets
Minho business which deal in timber is very cyclical in nature. Various market factor and changing weather can easily put a blow into the financial result. However, Minho's experience in the timber sector definitely did pay out when the group grab hold of the opportunity in diversifying into land banking and subsequently into small property development.
Till date, Minho is greatly boosted with a strong underlying asset of freehold land. Most of it's land is still clinging on the valuation dated back to 2009 and 2010.
Minho had been also paring down it's debt level gradually.
Stronger US and Europe market
While most of the revenue came from the local market, revenue from the US is ranked no.2 while UK no.3. The US market will continue to remain stable, while Minho can start to tap into the European market with the current stimulus program.
A stronger USD against the MYR will also translate to a better forex gain for the group. A stronger contribution from the European market will be able to see Minho ending in a stronger bottom line in 2015.
Minho is an interesting company to be look out upon, largely due to it's strong underlying assets, with NTA bearing approx RM 3.00. The current price of RM 0.90 is a huge 70% discount from it's asset, not counting it's huge revaluation reserves for it's freehold property. 1Q 2015 will also be stronger due to the resumption of log harvesting (no log harvesting income at 4Q 2014). A longer term outlook will see Minho trading at the range of RM 1.20.
Bone's short term TP : RM 1.05
Cheers and have a nice day
Regards,
Bone
http://bonescythe.blogspot.com
