Small Cap Investing: Johore Tin Berhad (Malaysia)

Company Profile

Johore Tin Berhad (JTB) is a manufacturing company that focuses on the production of tin cans ranging from confectionary to paint and chemicals. Furthermore, it has also expanded into the F&B industry via the production of condensed milk, evaporated milk, and other dairy products. 

Quick Market Stats

Currently trading at PE of <12x

Fundamentals

Growth in EPS, NAV and Cashflows
ROE > 12% and in net cash positions

Technical

Currently, in consolidating mode. Expects resistance at $1.60 and $1.87.

Prospects

Management highlights that tin manufacturing industry will remain challenging.

Analysts Recommendations

Desktop Valuation – For Illustrative Purpose Only

Due to competitive prospects (as highlighted by management), I have assumed the following:

  1. EPS at $0.15
  2. EPS annual growth rate at 3%, long term perpetual growth rate at 2%
  3. Discount rate at 10%
>25% margin of safety (based on assumed parameters)

Final Thoughts

I acknowledge that the tin can industry is competitive. Nevertheless, I believe this industry is consumer-driven, hence will possess some level of business resilience. The company has also been buying back its own shares.

Disclaimer: This is not an investment advice or endorsement. Please refer to general disclaimer of this blog.

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