I would want to share a very potential company in 2019, because technically, it is now very low, and the earning prospect is good. As in order to profit from investing in share market, it is about buying low selling high.
Now MIECO is at the very low price. At the price of 30 cents now with solid business around the world, and NTA of RM 0.72 a share, this share should have what it takes to move forward in 2019.
Firstly, I will show you the technical reason.
This is MIECO 1 year chart. 1 year ago, it is trading at 70 cents region. Now the share price had come to a region where it will see a technical break out from the long term down trend line.
There is very high chance that MIECO will break up from this resistant and form a upswing.
The good entry price can be timed at RM 0.31 to RM 0.32 which is right on the break out point.
The bollinger band of MIECO also pointing to a bollinger break out from a bollinger squeeze.
Technically, MIECO is very attractive
As long as the company is having a good business, everything is a cycle. Just like commodity, property, construction and oil and gas industry. The timber / chipboard industry should be heading for an upward run now because the bad season is over.
Second reason - Major natural disaster in 2018 will provide additional demand
As you can see, there are a lot of costly and deadly natural disaster happening in 2018, all of them nearing the end of 2018. From Japan, Taiwan, Hong Kong and until USA, these natural disaster cost USD 160 billion alone in 2018. If you think it another manner, that would be USD 160 billion of opportunity splashed out in rebuilding effort, which can benefit sector like timber industry where furniture is to be replaced, and houses to be rebuild.
Thirdly, a bonus from Malaysia government - Foreign worker levy to be lowered starting March 2019
KUALA LUMPUR: The government has agreed to temporarily lower the extension levy fees for foreign workers in five sectors for a one-year period effective March 1.
Finance Minister Lim Guan Eng said the reduction in levy fees between RM1,500 and RM4,000 involved the manufacturing, services (for restaurants and cleaning), construction, agriculture and plantation sectors.
Announcing the levy reduction in a statement, he said the Cabinet made the decision during a meeting on Feb 20 to lessen the burden of employers.
The new levy will start from March 1, 2019 to Feb 29, 2020. For the manufacturing sector it will be RM6,000, services (RM6,000), construction (RM6,000), agriculture (RM2,000) and plantation (RM2,000).
That is 40% reduction for manufacturing sector (Previously is RM 10k), which is a lot of saving for a labor intensive company.
Conclusion summary on MIECO
1. Technical outlook very good - Break out from long term resistant and bollinger breakout
2. 2018 natural disaster cost USD 160 billion, good demand to timber for rebuilding
3. Foreign worker levy in manufacturing lowered by 40% (RM 10k to RM 6k), huge cost saving to employer
So, if you are a smart trader, this could be your good chance to think MIECO now.
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