MLGLOBAL (7595) - MLGLOBAL - Quality Service in Construction Design and Build

MLGLOBAL (7595) - MLGLOBAL - Quality Service in Construction Design and Build

Today will be sharing this company as many might not yet notice the potential of this company:

MLGLOBAL BERHAD (7595) Shariah Compliance, home page : http://www.mlglobal.com.my/

To get into detail quickly, we cut the introduction from their website:

ML Global Berhad (“MGB”) was first debuted to the market as a roof tile product manufacturer. Throughout our business expansion journey, we have successfully diversified the Group’s business into project management and construction to enhance our value proposition in the market.

Notwithstanding that, MGB had on 14^th September 2016 entered into a Shares Sales Agreement for the acquisition of the entire issued and paid up share capital of MITC Engineering Sdn Bhd (“MITCE”) for a purchase consideration of RM300 million (“Proposed Acquisition”). 

The newly acquired subsidiary MITCE was an established construction player that had accumulated its track record in building high rise and landed residential properties as well as commercial properties for more than 10 years.

From line above, one important msg is that MLGLOBAL has already transforming into a construction company since last year end. Which many might still not familiar with this company simply because not much news on it. Here I come to remind you :

So if you quick enough, actually MITEC was actually LBS construction arm, which mean most of the LBS project built by MITCE. In case you don't know what is LBS, here I show you the chart: 

Chart can easily tell LBS (5789) over the years, have been moving strongly up after crisis of 2008. A very strong and prominent property developer in Malaysia. 

It's still very normal up till here you can't see any future potential or anything is interesting about MLGLOBAL, because it's not a goreng stock, it did not have a lot of news for you to understand. 

Lets make it simple, we check some fundamental of this company first: 

We already see obvious change in revenue however not yet see any profit for the latest quarter. That's again causing investor lack of interest. Here I share with you, there might be something others have miss out in this company ! 

From the latest quarterly result report, actually there are few one off expenses that causing the company not showing profit. this is still not as important as below:

The contribution from MITCE only show 1 month result in the latest quarter result !!

Here we share how we see the potential earning in May result: 

From the past many quarter result, 

Averagely each quarter make RM 10 million Revenue. 

Latest quarter result make RM 60 million Revenue (with only 1 month contribution)

Which mean RM 60 million - RM 10 million (average without MITCE contribution) = RM 50 Mil. 

So if MITCE 1 month can contribute RM 50 mil, what if 3 month?

Can it be at least RM 50 mil x 2 or x 3 ? 

WHICH MEAN coming MAY revenue potentially show RM 100 Mil to RM 150 Mil of revenue !

If that's right, RM 100 mil should easily see net profit of RM 10 mil which translate into EPS about 2.7 cent.

RM 0.027 cent x 4 = RM 0.108, if PE 12 it worth RM 1.296 !

How sure it can deliver good result? Looking at news, they still got RM 1.0 billion of project in hand, which can last for 2 years. 

Which mean averagely RM 1000 million / 24 month, each month can get RM 41 million revenue, and x3 month mean RM 123 million, which exactly correct as our estimate just now. 

This not yet include in future when they secure more project !! 

What more to say, the boss it self also buying the share lately. 

Looking at MLGLOBAL stock price, slowly trending up and I believe this company already transform into a strong construction company, therefore upside are quite positive to me. 

As a conclusion,

1. MLGLOBAL already transforming into a strong construction stock.
2. MLGLOBAL got strong backup from LBS BINA BERHAD. 
3. MLGLOBAL management team also mostly from LBS BINA BERHAD.
4. MLGLOBAL project can last at least 2 year.
5. MLGLOBAL may result potentially do better.
6. MLGLOBAL / LBS boss also buying the stock lately.
7. MLGLOBAL technically uptrend.
8. MLGLOBAL just done transformation, price did not flying much yet.
9. MLGLOBAL will be known by more people after this post.

As usual, this is a stock that potential for investment only, not for pump and dump !

My own personal "hope" for short term price to reach RM 1.30, mid term hope RM 1.80, long term hope RM 2.50. 

Above are purely sharing information that might have errors cause by human mistake, miscalculation, and for education and personal reference only.

MLGLOBAL (7595) - MLGLOBAL - Quality Service in Construction Design and Build 
http://bursalogicanalysis.blogspot.my/2017/04/mlglobal-quality-service-in.html