#2 Media Chinese International
Media Chinese International's (MCI) share price is trading at R$0.155, close to its 52-week low of R$0.150.
MCI is a Chinese media group, which is a merger of Ming Pao, Sin Chew, and Nanyang Press and produces media content (newspapers, magazines, books, digital media) for Southeast Asia, Greater China (Taiwan and Hong Kong), and North America.
Southeast Asia remains the biggest revenue contributor at 56% in 2022, followed by Greater China (31%) and North America (6%).
MCI's revenue stream has been steadily improving to R$590 million in 2022 (Mar 2022 to Mar 2023), after declining by 52% to R$483 million in 2021 (Mar 2020 to Mar 2021) due to the pandemic. However, MCI continued to make losses of R$3.9 million in 2022.
Hence, the share price has been declining from R$0.170 at the beginning of the year. However, other factors could help you to evaluate MCI's position in the market:
- Leading media company in the Chinese language market in Malaysia
Its flagship brands such as Sin Chew, Nanyang, China Press and Guang Ming enjoy dominant readerships in the Chinese market in Malaysia.
- Diversification efforts to expand beyond Southeast Asia
MCI has expanded beyond the borders of Southeast Asia into Greater China and North America. The Greater China segment has turned into profitability with profit margin improving from -1.3% in 2022 to +0.7% in 2023. However, the North American segment's profit margin declined further from -7.2% to -46.1% over the same period.
MCI is valued at a price-to-book ratio of 0.3 times, much lower than the industry's average of 0.8 times.
#3 Borneo Oil
Borneo Oil (BO) is trading for R$0.155 ( as of 17 July 2023) near the 52-week low of R$0.150.
BO primarily holds the Sugarbun fast-food franchise and is also involved in the businesses of property investment & management, and resources & sustainable energy.
The food & franchise segment contributes the most to BO's revenue in 2022 at 55%, followed by property investments (25%) and resources & energy (21%).
In terms of financial performance, BO's revenue has recovered to its pre-pandemic level (2019) of R$87 million in 2022. BO finally returned to cash flow positive for its operations, generating R$27 million in 2022 compared to a loss of R$27 million in 2021.
Meanwhile, the share price of BO has declined by 40% since the beginning of the year but could be worth taking a look at for the following reasons:
- Continued Strong Growth in its Non-Core Segments
It's property investment and resources & energy segments' revenue have grown by 253% and 128% respectively in 2022, providing a more diversified revenue base for investors.
- Strong Position in East Malaysia
BO's reputation and branding are primarily focused in East Malaysia where they are on par with most international fast food chains such as McDonalds and KFC.
- Low Valuations
BO is trading at a price-to-book valuation of 0.2 times, much lower when compared to the sector's average of 1.4 times.
#4 HubLine
HubLine (Hub) is trading for R$0.040, close to its 52-week low of R$0.035.
Hub mainly provides dry bulk shipping logistics services and serves transportation routes to Cambodia, Indonesia, the Philippines, Thailand, Malaysia and Vietnam. Other than that, it also operates small-scale aviation services in Malaysia and an aviation academy.
Shipping services still encompass a majority of Hub's revenue in 2022 at 63% followed by its aviation services and academy (37%).
Hub's revenue grew at a strong rate during the pandemic, from R$124 million in 2019 to R$228 million in 2022. Demand for shipping was driven mostly by increased freight rates and demand for transportation services. However, Hub's profitability has declined to a 4.9% profit margin in 2022 from 12.7% in 2021.
Hub's share price has been pretty much unchanged since the beginning of the year, but if you are interested in investing in it, these are the main factors that you should look at:
- Expanding Revenue Base
The purchase of Layang-Layang Aerospace in 2018 allowed HubLine to expand its revenue base to air transport services in East Malaysia. This segment has grown by 73% in 2022 to R$84 million.
- Potential Recovery in Global Trade in 2024
The World Bank projects that global growth will rise to 2.4% in 2024 from 2.1% in 2023, with potential improvements for global shipping activities.
In terms of valuation, Hub is trading at a price-to-book ratio of 1.0 times compared to the sector's average of 1.4 times.
