Possible for upside. MUDA presents another range trading opportunity. Improving RSI and MACD indicators currently signal reasonable entry level, with anticipation of continuous improvement in both momentum and trend in near term to lift price higher to subsequent resistance level of RM2.19.
However, failure to hold on to support level of RM1.88 may indicate weakness in the share price and hence, a cut-loss signal.
Muda Holdings breached the RM1.89 minor resistance level in its latest session. With a healthy RSI level, a bullish bias may be present above this mark with a target price of RM2.00, followed by RM2.18. Meanwhile, it may continue trending sideways if it falls back below the RM1.89 mark in the near term. In this case, the immediate support is anticipated at RM1.75, whereby traders may exit on a breach to avoid the risk of a further correction.
Trading Call: Buy on favourable consolidation above RM1.89
集团目前共有员工超过2800人，业务仍在不断扩展之中。 --马来西亚大约拥有55条瓦楞纸板生产线，其瓦楞包装需求量将超过130万吨.马来西亚对瓦楞纸箱纸板消费保持着每年4-5%的增长，纸和纸板的人均消费超过60kg。大部分瓦楞纸箱生产企业位于马来西亚半岛，这里人口集中，是全国的经济命脉。现在马来西亚东部的六家瓦楞纸箱生产企业，主要为马来西亚东部的食品、饮料和其他当地行业提供纸箱产品。单面瓦楞纸板和三层瓦楞纸板大概占到了瓦楞纸板产品总量的70％左右，五层瓦楞纸板大概为30％。马来西亚市场拓展十分的迅速，但三级厂并不其中。Oji与Muda两大集团占据了马来西亚大约65-70%的市场份额。截止至2017年2月18日马来西亚已确定观展企业120家，其中就包含占据马来西亚包装市场大部分份额的Oji以及Muda。 Oji Paper Asia Sdn. Bhd：日本OJi（王子）集团，是马来西亚瓦楞包装市场领头企业之一在马来西亚拥有8家公司。 Muda paper millssdn.Bhd：1964年,Muda在马来西亚Tasek,Penang成立了第一家造纸厂。而如今，Muda是马来西亚最大的综合造纸厂之一，每年回收超过40万吨的废纸。并为当地和出口市场提供高档的纸板及相关产品。
Muda上游有500千吨加上下游现在有240千吨，过后接下来的几个月还有新的三架机器投产。单单Muda的下游240千顿，都已经值得两亿了，如果和Orna比较的话。Oji paper 才要刚建的上游新产能，450千吨的产能就要价12亿。现在Muda 500千上游吨产+240千吨下游产能才卖你6亿，价钱是否低估了？
4)good comment from davidtslim:
Summary
a)Muda has the highest capacity of paper mill (upstream) in Malaysia. It benefited from China Blue Sky policy (ban of waste paper import) which the selling price of their products have increased consistently from Q4’17 to Q1’18 while the raw material (waste paper) price has dropped.
b)The timely expansion of Muda in 2017 and 2018 (to be completed in Q3 and Q4) for its paper mill and corrugated plants coincident with the price surge of its product. This will further drive its profit growth especially in Q4’18 due to peak season of online retail shopping in Nov and Dec.
c)Since 2nd half of 2017, paper price in China has been rising, and remain elevated until now. This was caused by shutting down of plants to improve environment. As China is a huge consumer of paper packaging products, the price increase spilled over to international market
d)The demands in Malaysia for corrugated products will continue to grow especially Malaysia now serve as Alibaba’s regional e-commerce and logistics hub in South East Asia.
e)Based on the higher demands and selling price of paper mill products, profit margin of Muda should be expanded in 2018 and it may has some export opportunity.
f)Based on estimated EPS of 38 sen, with forward 12-month PEx of 10x, the fair value of Muda is estimated to be around RM3.8.
g)Muda2018 = (Upstream+downstream+trading) X (Expansion+price hike) = High_Profit_Growth
MUDA has experienced a trendline breakout above the RM1.99 level with high volumes. The MACD Indicator has issued a BUY Signal, while the RSI has risen above 50. Price may advance, targeting the RM2.30 and RM2.47 levels. Support will be set around the RM1.73 level.
rojakmeeWaste paper cost in China 2700 yuan that’s 2700*0.6=RM1620 while selling price of corrugated paper in China average 4400 yuan and that’s is 4400*0.6=rm2640 , the difference between corrugated paper and waste paper is RM2640-RM1620=RM1020
The RM1020 above consist of profit element and processing cost to convert waste paper to corrugated paper per tonne in China.
Now we look at Muda, their waste paper is 30% imported at RM350 to RM450 per tonne and 70% Locally at RM650 per tonne, so their cost average is (350+450)/2*0.3=RM120 and 0.7*RM650=RM455 giving average cost of RM120+RM455=RM575 (This is the waste paper cost for Muda)
Cost of conversion from waste paper to corrugated paper is about RM1020 (we assumed the RM1020 above is all cost and does not include profit element) so the cost of Muda to process waste paper to corrugated paper is RM575+RM1020=RM1595
Muda capacity from their website is 500k tonne and per qtr. is 125k tonne, if we assume the selling price is RM2450 (which is RM190 less than the price in China) , the margin per tonne is RM2450-RM1595=RM855 multiplies by 125k tonne per qtr. is 106.875Million gross margin per qtr. If you look at the recent qtr. report, their below gross margin cost is about RM48Million (fixed cost/administrative cost)
Therefore the profit before tax would be about RM106.875-RM48=58.875Million (should be higher profit since I have reduced the selling price by RM190 and processing cost of RM1020 should be lower because of profit element) that’s 58.875/305=EPS of about 19 cents per qtr.
Muda has RM1045 per tonne waste paper cost advantage, If Muda don’t report this EPS, don’t know what to say.
