Analysts gave this stock a perfect 10 score! But what makes this company so special? And what do they do and how do they do things to keep them growing? First we need to analyse all the 4M’s 🤔
For those who are not familiar with the 4️M’s it is
📍 Meaning (what does the company do and where is the revenue coming from) 💰
📍 Moat (competitive advantage amongst other competitors) 🏰
📍 Management (how is the management doing things in the company to grow the company) 👨💼👩💼
📍 Margin of safety (how much of a discount you can buy this company with after calculating the intrinsic value) 🔽
The first M – Meaning ✨
This company is dealing with mainly dealing with Tin Manufacturing🥫 and Food & Beverage🥤.
Tin Manufacturing is involved in the manufacturing of various tins, cans, and other containers. Food and Beverage are involved in manufacturing and selling of milk and other related dairy products.
Main revenue contributor is their Food & Beverage segment which more than 80% is exported mainly in West Africa, South-East Asia Region and American Continent.
Majority of their revenue also derives from Malaysia but they are also doing business in various countries such as Africa, Central America, Europe, Malaysia, and Other Countries.
Second M – Moat ✨
This company has a few main competitors as well such as TGUAN, PERSTIM, SLP and DAIBOCI but what makes JOHOTIN up their game compared to all the other competitors? 💎
To remain competitive, the group have always maintained their prices to their customers for as long as possible in order to keep their existing customer and maybe even take other customers from other competitors due to competitive prices that they offer. ⏬🏷️
The Group continuously monitoring the prices of key raw materials, expanding the pool of suppliers and customers whilst continuing to establish long-term business relationship with the existing suppliers and customers, expanding the existing business by enhancing the Group’s strength and developing new products. 🧑🤝🧑
For F&B segment🥡, the barriers to entry are mainly the relative high capital investment to set up the manufacturing facilities, established distribution channels, compliance with stringent safety standards and strong research and development capabilities.
It will be hard for new competitors to compete with JOHOTIN with their competitive prices and strong business relationship with their existing suppliers and customers.
Third M – Management ✨
Things that management do to overcome the group’s challenges
Challenge (1) Shortage of labour supply, both local and foreign. 👨🏭👩🏭
Resolution (1) Appointed several recruitment agencies to source for new workforce and currently we are able to cope with the demands and control over the increase in operational costs. ✔️
Challenge (2) Higher maintenance costs are required for the existing machineries. 🔧⚙️
Resolution (2) machineries were upgraded consistently as the older machineries deteriorate and required higher maintenance costs with newer machineries, productions are more consistent and capacities are increased. ✔️
The fourth M which is their Margin of Safety, this will be a heck of a long one. We will be discussing more on their financials and also calculate their intrinsic value as well as whether is this company currently undervalued or overvalued at the moment.
Comment down below “Part 2” and I will make part 2 in the upcoming days.
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