Our opinion on the current state of MST

2023年9月20日

Mustek (MST) is South Africa's largest assembler of personal computers under its brand name Mercer. It also imports a variety of computer products such as Samsung, Acer and Microsoft. The company consistently trades well below its net asset value (NAV). The company is beginning to benefit from its fibre-to-the-home activities and selling additional hardware as a result. The CEO, David Kan, is very excited about the exploitation of the fibre-to-the-home market. He says there can be exponential growth of as much as 500% in their sales of cables for this market. There is a possibility that the company will also benefit from remote education and work-from-home following COVID-19. Mustek is well-positioned to exploit this through its existing products. On 16th July 2021 the company reported on the unrest and looting saying, “The Group is assessing the damage caused to its branch and total losses to inventory and equipment is not expected to exceed R20 million". In its results for the year to 30th June 2023 the company reported revenue up 13,7% and headline earnings per share (HEPS) up 5%. The company's net asset value (NAV) increased 13,8% to 2724,36c per share. The company said, "Mustek has largely succeeded in asserting itself as an end-to-end ICT and sustainable technology solutions provider required for a changing world. In conjunction with strategic partners from across the ICT industry Mustek is well positioned for the forthcoming years". On a P:E of 4,2 and dividend yield of 3,91%, the share still seems cheap to us.