PT Mustika Ratu – Q3 2009
Posted on Sunday, November 8, 2009
Filed under
Keep the Value,
Mustika Ratu,
Value Stalking
This is another “KEEP THE VALUE” company.
Honestly I was tempted to put her as “STALK THE WINNER”.
But not for now, she still needs to prove herself.
Who is PT Mustika Ratu?
an Indonesian company that is engaged in the production, distribution and marketing of herbal-based and natural cosmetics, herbal drinks products:
Mustika Ratu Tox Tea, Slimming Gel, Daun Sirih Toothpaste, Moor’s, etc
The Company also produces body care products for men, opens and franchises spa centers, and creates home spa products.
KEEP THE VALUES (see the above tabulation image for reference)
From the tabulation, you may notice that the NAV is around Rp 716/share
What is NAV?
NAV is the value of the company.
or in other word, if the company is to close down today, it can sell itself for Rp 716 per share (this is based on the rough calculation).
The stock price @ 8 Nov 2009 is Rp 440 per share.
What does this mean?
It basically tells you that Mr Market (trader) values the company at Rp 440 per share. So, the market value is only 61% of company’s real value.
In other words, you are buying the company with discount of 49%.
And this is not including the brands that company owns.
What could go wrong?
The debt level is low. This is a good thing actually, but it also shows that the company is extremely conservative. They are playing safe with no big expansion plan in future. At least in my opinion. This is the reason why, I decided NOT to put this company under “STALK THE WINNER” category.
What could be the catalyst?
Profit margin improvement will be the key factor for the company to grow.
The company should review and streamline the business.
This means that, the management should focus and expanding business or products with good prospect and profit margin. At the same time streamlining bad businesses and products.
If that is so, one day, market will value this company to its real value.
Good Analysis.. I agree that this company should not be included in "STALK THE WINNER" category. The management just too conservative. Me personally, just underweight this stock in my portfolio. I am still expecting though, that the second generation of the founder would do the business more aggressively in the future.
Precisely, i agree with you..
The management seems like don't have vision to strengthen the business.
They should really streamline their products and strengthen brands (must learn from Unilever)..
End of the year diagnosis on the company:
the obvious:
Price at 30 Dec 2011: Rp. 520.
Rough calculation:
If your initial investment was Rp 100Million, the value is now Rp 118Million.
Good enough for you?