MALINDO FEEDMILL - It's All About Chicken!

I think this is the first time I talk about foreign company in my blog. Malindo Feedmill is always my darling stock. This is an Indonesia's poultry company, which mainly produces chicken feed, day-old chicken (DOC) & chicken meat. Controlled by Malaysians, the Lau's family, Malindo Feedmill's major shareholder is Dragon Amity, which is under management of Leong Hup & Emivest, listed in Bursa once awhile & taken over by Emerging Glory 2 years ago, both are major poultry players in Malaysia.

Why Malindo Feedmill? Because of large potential market to be discovered! Just show you some funny fact. Statistics shows that Indonesia has the lowest chicken consumption per capita in the region.While Malaysian consumes 37.2kg/capita per year, Thailand 13.3kg, Philipine 8.4kg, Indonesian just consumes 5.0kg/capita 1 year. I don't think Indonesians will reach Malaysian's figure, but if we talk about 7.5kg/capita, it's 50% of increment!

Financial performance wise, Malindo Feedmill has been performing pretty strong this year. We can see their revenue has increased almost 30% & profit has surged over 40% compare to the same period last year. The ROE of Malindo Feedmill over 50% for the last 4 quarters. I believe that 40% of ROE shouldn't be a problem for them to achieve in FY13. Dividend wise, Malindo Feedmill is paying around 30% payout of their earnings as dividend.

The market capital of Malindo Feedmill is 3,051 billion IDR, which is around 4.7 times of its book value. I believe this is still reasonable because of its high ROE. The share price has surged to current price of IDR1,800, which is over 80% of increase compare to the price 1 year ago. Currently Malindo Feedmill is trading at PE of 9.5 times.

Note: The above content is just a blogging activity that purely share my investment thoughts & ideas and should not be used as recommendation to buy or sell any securities. I may already have position in the above securities. Any action that you take from the opinions or information of this blog is solely on your own responsibility. Please consult your investment advisor before you make any investment decision.