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MNRB HOLDINGS BERHAD (6459): Minimum Fair Value of RM2.00


I believe the article written by Mr Koon two days ago well describe why MNRB should be a company that is worth noticing at this point of time. (Disclaimer: Acknowledging Mr Koon's article on MNRB doesn't indicate I am in line with all his previous articles as I do have differences in opinion. Nervertheless, credit should be given where it's due.)


What should be a reasonable price target?

--Based on the company's past earnings:

Source: https://klse.i3investor.com/servlets/stk/annqtyres/6459.jsp

EPS Full Year 2012: 41 cents

EPS Full Year 2013: 53 cents

EPS Full Year 2014: 73 cents

EPS Full Year 2015: 64 cents

EPS Full Year 2016: Negative

EPS Full Year 2017: 31 cents

EPS Full Year 2018: 43 cents

EPS Full Year 2019: 24 cents

EPS Full Year 2020: 18 cents

EPS Full Year 2021: 23 cents (assuming quarter ending 31.03.21 has same EPS as previous quarter)

Although the EPS of the company is decreasing over time, the company manages to maintain an EPS of >20 cents for the past 10 years (except in 2016 and slight shortfall in 2020).

EPS of 20 cents x PE of 10 years = min RM2.00 should be the target price. We are not simply multiplying by any PE; in fact, this company has proven over the time that it managed to maintain such EPS.

--Based on peers' valuation (relative valuation method)




MNRB 23 cents 6x
LPI 84 cents 16x
MANULIFE 19 cents 11x
TAKAFUL 43 cents 11x
TUNEPRO 3 cents 19x
MPHBCAP 2 cents 73x

MNRB is trading at the cheapest PE. Even at a conservative PE of 10x, the min target price is 23cents x 10 = RM2.30.


Based on the company's own earnings for the past 10 years and also based on its peers' relative valuation, the target price for MNRB Holdings Berhad should be minimum RM2.00, an upside of approximately 43% from current price.

Disclaimer: This is not a buy/sell call but mainly for sharing purpose to facilitate exchange of knowledge. You should make decision to buy/sell this stock based on your own analysis or by contacting the authorised investment advisors by Securities Commission and Bursa Malaysia.


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