Mewah - puzzling

Mewah has fallen sharply from a few months ago when it was above $1. So even now at 53.5 cents, it is still deep in the hole for those who bought at above $1.00

Mewah traded between 49.5 and 52 cents yesterday -- closing at 52 cents. It's a healthy correction. Today..... can go up?

Engine still cold... Mewah’s 3QFY11 performance continued to be weak, and I think the strong insider buying was more for the long haul -- a recovery in profitability that will take place in 2012, rather than in 3Q or 4Q.

In 3Q, net income was US$6.5mn down 69% y-y.  The 3Q numbers were only marginally up sequentially (compared to 2Q’s US$6mn), suggesting that there is no recovery in the
operating environment yet.

A year ago Mewah had its IPO at $1.10. Ok lah, at that time, markets were still bullish. The Mewah owners sold in the nick of time. Today, the stock is trading at just 47 cents. The damn euro crisis pulled it down but so did Mewah's own lousy earnings disappointments.

ACcording to Kim Eng report, Mewah's positioning is in the midstream portion which subjects its margins to pricing pressure both upstream and downstream. Wah liao, u get squeezed left, right and centre.

The market currently has no “Buys”, three “Holds” and six “Sells” on the stock. Are analysts so insightful as to be able to say that you can forget about this stock?

This one is off my radar screen, cos Credit Suisse today has warned:


The Indonesian’s downstream players will now enjoy even more substantial margins from this new tax structure because the export tax for refined or value-added products – e.g. refined olein (7% export tax versus 12.5% previously) and refined palm kernel olein (5.0% tax versus previous 12.5%) – have been cut.


The Malaysian downstream players cannot compete with their Indonesian counterparts, and will likely be worse hit with the new Indonesian export tax structure. Both IOI and Mewah’s profitability will be eroded by price undercutting from their Indonesian peers.

Maintain UNDERPERFORM on IOI and Mewah.

The Controlling Shareholders of the Company are Cheo family. They have a total interest of approximately 86.02% in the issued share capital of the Company as at the date of this announcement. The Cheo family comprises of Dr Cheo Tong Choon, his parents, his spouse, his children, his siblings and his siblings’ spouses and children. Delisting soon? List at $1.10.. Another scam?