MAL is low ?

STOCK HUNTER · 1 MAL is low ? Tue Jun 21, 2011 7:39 pm

STOCK HUNTER

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MAL is in low .........

what do you think guy >?

afro

early · 2 Re: MAL is low ? Tue Jun 21, 2011 8:09 pm

early

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I think it is a very good share to buy. Especialy MAL.N because it is trading almost at the same price as MAL.X, but should be at least a rupee more.
Also due to the following reasons
1)Annualised EPS 3.20 (after subdivision)
- Rs.8.02*4/ 10=3.20
2)Net Assets per Share 7.89 (As at 31/03/11)
3)Proposed rights issue will raise over Rs. 600.0Mn to venture into the leisure sector which is one of the future growth sectors.
(figures were obtained from the quaterly statement uploaded on the CSE sight)
However the wage hike may affect the bottom line of all plantation companies, but a contended workforce is allways a major plus factor for any company in the long run.

Hiru · 3 Re: MAL is low ? Tue Jun 21, 2011 9:11 pm

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NAV of 7.89 may not have been adjusted for the effect of subsequent share split.

A significant part of proposed right issue may be to finance part of working capital required to meet the salary increments which may be in arrears from April 2011. I suggest this because net cash generated from operation is 39mn as at March 2011 and net cash flows from all sources is around 47mn.

However, I expect others may have more information of employees and salary increments.

ishnet · 4 Re: MAL is low ? Tue Jun 21, 2011 10:13 pm

ishnet

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Mal going for another Right Issue,Pls read CSE daily Report
"For every (10)Ten Non-Voting Shares held,(2) Two Voting
Shares and(2) Two Non-Voting SharesDates to benotified
(Issue Price :Voting Rs: 6.75, Non-Voting Rs: 5.50 To be utilized for diversification into the leisure sector)"

factFINDER · 5 Re: MAL is low ? Tue Jun 21, 2011 10:19 pm

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Hiru wrote: NAV of 7.89 may not have been adjusted for the effect of subsequent share split.

A significant part of proposed right issue may be to finance part of working capital required to meet the salary increments which may be in arrears from April 2011. I suggest this because net cash generated from operation is 39mn as at March 2011 and net cash flows from all sources is around 47mn.

However, I expect others may have more information of employees and salary increments.

@Hiru,

It won't be much hard task to check latest financials of MAL through CSE web link http://www.cse.lk/cmt/upload_report_file/722_1306752323.pdf

It is very clear that NAPS of 7.90 is after adjudtment to the 1to10 share split. Therefore it is trading at P/BV of 1.08 (market price of 8.50)

Also MAL reported ESP 2.21 (once again after adjustment to the split) and trading at PER 3.84.

No surprise!! No one will beleive that MAL is trading at 8.50 with NAPS 7.90 and EPS 2.21, as it is soo undervalued.

But my surprise is why a company with short-term investment of 232.5 millions and cash and bank balances of 108 millions need to rise funds through a right issue to finance wage bill/arrears? Shocked

The other factor is funds rased through right issue can not be used for other purposes, without shareholders concent. MAL already declared that the right proceeds will be in invested in leisure sector.

Decleration - I have MAL is my PF. Therefore my views can be biased.

kam2011 · 6 Re: MAL is low ? Tue Jun 21, 2011 11:02 pm

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MAL is one of the best performing plantation company. They do not raise funds unless it is vital for some planned project. As described in above post I do not think they are facing any cash problem and you cant guess that they are rasing funds to meet salary bills.Then there will be a question to answer. Do they need to raise funds through a right issue or some other way to settle future salary bills monthly.There is no valid point there my dear friend. This is a well managed company under present management board and they have been able to record good results even in the very dificult period prior to 2009 for plantation companies.

Hiru · 7 Re: MAL is low ? Wed Jun 22, 2011 12:52 am

Hiru

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factFINDER wrote:

Hiru wrote: NAV of 7.89 may not have been adjusted for the effect of subsequent share split.

A significant part of proposed right issue may be to finance part of working capital required to meet the salary increments which may be in arrears from April 2011. I suggest this because net cash generated from operation is 39mn as at March 2011 and net cash flows from all sources is around 47mn.

However, I expect others may have more information of employees and salary increments.

@Hiru,

It won't be much hard task to check latest financials of MAL through CSE web link http://www.cse.lk/cmt/upload_report_file/722_1306752323.pdf

It is very clear that NAPS of 7.90 is after adjudtment to the 1to10 share split. Therefore it is trading at P/BV of 1.08 (market price of 8.50)

Also MAL reported ESP 2.21 (once again after adjustment to the split) and trading at PER 3.84.

No surprise!! No one will beleive that MAL is trading at 8.50 with NAPS 7.90 and EPS 2.21, as it is soo undervalued.

But my surprise is why a company with short-term investment of 232.5 millions and cash and bank balances of 108 millions need to rise funds through a right issue to finance wage bill/arrears?

The other factor is funds rased through right issue can not be used for other purposes, without shareholders concent. MAL already declared that the right proceeds will be in invested in leisure sector.

Decleration - I have MAL is my PF. Therefore my views can be biased.

Very sorry that I have mistaken the NAV

I too have MAL in my porfolio and purchased merely due to increasing rubber prices, but I know practically and personally how bad some of the estates are managed by these fellows. Wastage and corruption are at their highest while the level of maintaining is at considerably lower level and company would be facing much problems if there is any significant drop in rubber prices.

If you see again, you may realize that cash balance net of OD is around 47 mn.

Further, significant portion of rubber lands has reached to non-productive level and some of them are currently being uprooted, so this would have a negative impact starting from next quarter. These matters may not be communicated to you all as these are ground level information most of you have no access to.

If you further analyse segment information, you may realize what is the dependency on rubber.

So many companies currently say that they are going to invest in leisure sector as a means of enticing shareholders to give further funds, can you see any works done. LGL and ODEL are two of them. LGL will come soon asking money in terms of a right issue without doing what they promised.