not vested
Trading Buy: MFLOUR – 3662
Essentials such as flour and grains may remain intact
(Last price: RM0.565, Potential upside +28.3%)
Company Profile
MFLOUR is involved in flour and grains trading as well as integrated poultry business.
Trading Catalyst
Flour and grains segment recorded EBIT of RM45.1m in 4Q19 vs. RM30.8m in 4Q18 due to favourable margins arising from higher ASP and better production efficiency in 4Q19 offsetting operating loss in poultry segment.
MFLOUR proposed to repurchase up to 10% of its total issued shares or a maximum of 100.74m. We view this as a positive move to stabilise the recent fall of the share price following the Covid-19 outbreak.
The SBB will be funded internally throughout the company’s retained profit (c.RM481.3m in FY19). SBB could benefit when they are being sold higher and make exceptional gains for the company or being distributed as share dividends to shareholders.
Technical View
Resistance: RM0.605 / RM0.65 / RM0.725
Support: RM0.54 / RM0.53
Cut loss: RM0.525
Key Financial Stats
Dividend yield: 5.3%
Source: HLIB