Let’s assume the company grows revenue ~13% over the next five years. That's MYR 1B by 2024.
Assume ~70% GM and 51% EBIT margins. This gets us MYR 755M in 2024 GP, MYR 545M in EBIT & MYR 518M in after-tax profits.
That's <13x 2024 estimated EV/NOPAT.
7/ Concluding Thoughts/Risks
Risks: currency, local gov't apprehension, dilution, customer concentration.
Take: MYEG is a fantastic business trading at a respectable price. The company commands its Malaysian market and is actively focused on diversifying its revenue streams.
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Recurring revenue is great. Recurring mistakes, not so great. Here were our biggest mistakes:
1) Too slow to act on a high conviction thesis 2) Overly constrictive trade management 3) Not sizing up (within limits) on higher conviction opportunities
2/ Error 1: Slow To Act on High Convictions
We come across a fantastic setup that has a Trifecta of tailwinds (sentiment, fundamental, technical) behind it.
We pitch it, write it up for the group.
And then don’t take the first entry and watch as our thesis plays out to the T