Media Chinese (1)

Rare Opportunity To Nibble On A Blue Chip

Publish date: Mon, 19 Jan 2015, 03:19 PM

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Over the past one year, MCIL has been on a downward trend. Recently the drop has accelerated, driven by a host of bad news :-

(a) sofetning of adex;

(b) strong US Dollars increase newsprint cost; and

(c) reduction in local Chinese newspaper circulation.

As a long term investor, I took the opportunity to start nibbling in the market. I believe there is never a perfect time to buy into a good company. When time is good, price will be high. The only time to buy will be when time is bad. So please dont complain about short term earnings downside risk. You can't have the cake and eat it too.

MCIL has an established franchise run by competent professionals. With its strong fundamentals, one day it will recover. 

The company has market cap of RM1.2 billion (based on 1.7 billion shares and RM0.69).

Based on past 12 months cumulative net profit of RM134 mil, PER is 8.7 times.

The group has strong balance sheets. With net assets of RM734 mil, borrowings of RM480 mil and cash of RM357 mil, net gearing is 0.17 times only.

Out of the RM480 mil borrowings, RM450 mil are fixed rate bonds. As such, the company is insulated from interest rate fluctuation. 50% of the bonds is due in 2017 and 2019 respectively. 

The company paid out DPS of 3.6 sen over past 12 months. This translates into dividend yield of 5.2%.

As a blue chip, the company is very well covered by analysts. Please go through the various analyst reports to learn more about the company.

Have a nice day.