Strong buy call on Success, MNRB and Layhong

Success registered a continuous strong growth result with revenue grown to RM 87 Mil this quarter plus an improved yoy EPS at RM 6.41 cents. This work out to be a PE of 6-7 time and trading below its NTAB. We continue to call for buy at min target above RM 2.00.

Layhong has announced improved revenue with strong return in profit. At 10 sen a share of EPS, it has improved its whole year profit to 14 cents. If another quarter improved further with stable profit. We see Layhong will break the critical RM 2.00 level in short time and readjusting to its valuation to a fair value above RM 2.50.

MNRB slight improved in revenue but has clocked in 34 cents EPS. Rumour on potential losses caused by MH370 either is not reflected in this quarter or it has not impacted at all due to hedging. In my point of view if there is no announcement from them means the impact is minimum. That works out to be 70 over cents EPS per year which the current trading price only at 5 times. We call for a strong buy till you drop and our target at RM 8.00 minimum.

3 thoughts on “Strong buy call on Success, MNRB and Layhong

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  1. mnrb has not made any announcement as well on takaful ikhlas tax assessment and panalty as well. i believe hasil continue to assess 2010,2011,2012,2013. It can anytime wipe out all the earning for ended year.

    1. I have no doubt there is a possibility of this. But if class like MNRB is doing this kind of practise. I will not regret to sell even more and move fund to invest overseas. Locally we still have a huge step to improve the corporate governance and their ways to handling issue like this. In compare to Alliance has tabled out their involvement and factored in the expectation. It will be also a surprised to me if MNRB did not hedge their underwriting well. Looking into long term, MNRB is still highly undervalued.

    2. Adding to this taxation point, in US there is also settlement cases. It will not be rare it can be also a settlement case over here. Given MNRB more than 60% holding are by Government and Bumiputera funds related. I doubt there will be severe penalty on them.

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