Calculating The Intrinsic Value Of Mewah International Inc. (SGX:MV4)

Mewah International Inc. (SGX:MV4) is a leading manufacturer and supplier of vegetable oil products, operating in multiple regions worldwide. With a strong market position and a diverse product portfolio, Mewah International has shown resilience and growth potential despite market fluctuations. To determine the intrinsic value of Mewah International, we'll analyze its financial performance, valuation multiples, and strategic initiatives.


**Financial Performance and Growth Trends**

Mewah International's revenue and profitability have shown volatility over the past five years. Revenue growth ranged from -19.83% to 26.20%, while profit margins fluctuated between 0.41% and 2.51%. Despite these fluctuations, the company's intrinsic value remains attractive, with a trailing PE ratio of 6.22 and a forward PE ratio of 7.33 (based on consensus estimates).


**Valuation Multiples and Industry Comparison**

Mewah International's current valuation multiples are significantly lower than its historical averages and those of its industry peers. With a P/E ratio of 6.22 and an EV/EBITDA ratio of 4.54, Mewah International appears undervalued compared to its historical growth and profitability trends. In contrast, Indofood Agri Resources (SGX:5JS) has a P/E ratio of 15.4x and EV/EBITDA of 9.2x, indicating a higher valuation.


**Dividend History and Payout Ratio**

Mewah International has a 3-year dividend growth streak, with a current yield of 2.73% and a payout ratio of 16.98%. Incorporating dividends into the intrinsic value calculation using the Gordon Growth Model, with a 5% growth rate, Mewah International's intrinsic value based on dividends alone is approximately SGD 0.32 per share.

**Expansion Plans and Market Penetration**

Mewah International's strategic acquisitions and partnerships have expanded its product offerings and geographical reach, enhancing its market position and driving revenue growth. The company's acquisition of PT Simpang Kanan Lestarindo and PT Able Commodities Indonesia, along with partnerships like the one with Sime Darby Plantation Berhad, have bolstered its intrinsic value and growth prospects.


**Calculating Intrinsic Value**

To calculate Mewah International's intrinsic value, consider its earnings growth rate, dividend yield, and the value of its assets. Using the Gordon Growth Model with a 5% growth rate and a discount rate of 10%, Mewah International's intrinsic value is estimated at S$0.37 per share, indicating a potential undervaluation.


In conclusion, Mewah International's intrinsic value is supported by its strong financial performance, attractive valuation multiples, and strategic expansion initiatives. Despite market fluctuations, the company's growth potential and solid fundamentals make it an attractive investment opportunity. By considering its earnings growth rate, dividend yield, and asset value, investors can make informed decisions about Mewah International's intrinsic value.