You can contact the author (Teguh Hidayat) by email, teguh.idx@gmail.com. The author live in Jakarta, Indonesia.

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Mayora Indah

Mayora Indah (MYOR) is a company who produces sweet food such as peppermint, candy, and biscuit. Its products are often advertised in television so, the products is quite famous for us. Even though its business scope is narrow, in fact, its asset is big enough. MYOR asset has been noted around Rp3.5 trillion at the first quarter of 2010. Similar with the other food producer companies, MYOR’s net profit and income have been increased from time to time. The income of MYOR at the first quarter of 2010 goes up 27.3% and its net profit goes up 67.0% compared to the same period in 2009.

MYOR of is a healthy company and promises a consistent profit if we see its profit balance which rises from Rp874 billion to Rp1,255 billion and causing its equity rises about 29.2%. The portion of debt to its equity is also good. Its debt is almost equivalent with its equity. MYOR’s debt is Rp1,711 billion whereas its equity is Rp1,701 billion (difference Rp10 billion).

Its balance performance is relatively good. The income, the gross profit, the operational profit, and the net profit, altogether go up successively. The income rises 27.3%, the gross profit goes up 34.5%, the operational profit increases 48.5%, and net profit rises 67.0%. Because MYOR does not have too much debt, the burden or earnings of the non- operational activity (monetary activity) such as interest, the rupiah foreign exchange, etc, are in a small amount and do not give many influences to  the increase or the degradation of its net profit.

For a company with narrow scope, MYOR’s profitability ratio can be referred as good. Its ROE is 28.0%, bigger than Indofood (23.6%), a company whose business is in food sector. As we know that MYOR has only sold peppermint, beverage, and snack which of course are not primary food for Indonesians, so that its earnings should not be bigger than its capital comparing to Indofood which produces Indomie, wheat flour, cooking oil, etc which are the prime food for Indonesians.

How about its share?

Unfortunately, only 513 million pieces of MYOR’s share circulate in market, and as a result, the share is not liquid. However, because MYOR is a non-owning company (what I mean is that this company is not a subsidiary company of certain conglomerate group), its share will seldom to be ‘cooked so its share movement is quite fair.

Because its share is not liquid, and its nominal price is costly (MYOR is not bluchip, it is also not a penny stock because the amount of its circulating stock is few), and in addition MYOR is a costumer goods company which is smaller than UNVR and INDF, so in the past people seldom looked at MYOR. MYOR went rapidly to level 5,000 after continuously rose in the last one year then people realized that MYOR’s performance is good enough. In fact, a year ago, MYOR stood at 1,000s point.

Even though MYOR has gone highly to 5,800, it notes the market cap about 2.6 times of its equity (PBV 2.6 times), and PER 9.4 times. It is still relatively undervalue! However, because it has already gone up quite a lot including during this month, technically, MYOR will be rather difficult to rise again. If you wish to enter, it will be better to wait when MYOR at under 5,500.

MYOR, of course, is also suitable for the term long infestation. However, like what I mentioned before, don’t buy it now it is better to wait until it is under 5,500.

 Performance Rating: AA
 Share Rating at 5,800: A


 Original article was written on Friday, May 14, 2010

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