A Closer Look At Oriental Food

The share price of Malaysian-based Oriental Food Industries (OFI) has recently reached its low of slightly below RM1.40. Will it continue to decline?

Let’s perform a quick visual comparison between OFI and other comparable food / consumer products companies listed on Bursa Malaysia:

Food Companies Market Cap.png

The above diagram shows the market cap of OFI and its comparable food companies. Most of these companies generally move in tandem with each other.

Statistical View

Let’s compare the market cap of OFI against the total market cap of these comparable food companies (excluding OFI):

Test Results_Summary.png

The above regression analysis shows statistical significance that the market cap of OFI will depend on the total market of the other food companies.

In addition, the following diagram shows that OFI’s current market cap has fallen below the 95-percent confidence interval, thereby increasing the likelihood of a potential rebound from its current low. 

OFI_Forecast Range.png

Based on the regression parameters, the theoretical market cap for OFI is shown below. The current market cap of OFI is MYR331.2 m (or MYR1.38 per share) which is relatively lower than the predicted market cap of MYR525.0 (or RM2.18 per share), with a confidence interval of MYR379.0 m  (or MYR1.58 per share) and MYR671.0 m (or MYR2.79 per share). Will we see a potential rebound in OFI’s share price to at least RM1.58 per share?

ConfidenceRange.png

DISCLAIMER: THIS IS A PERSONAL BLOG AND SHALL NOT BE RELIED IN WHATSOEVER MANNER BY ANYONE. ALL ARTICLES CONTAINED IN THIS SITE ARE FOR INFORMATION AND ILLUSTRATIVE PURPOSES ONLY AND DOES NOT PURPORT TO SHOW ACTUAL RESULTS. IT IS NOT, AND SHOULD NOT BE REGARDED AS INVESTMENT ADVICE OR AS A RECOMMENDATION REGARDING ANY PARTICULAR SECURITY OR COURSE OF ACTION. SOURCES USED IN THIS SITE HAVE NOT BEEN INDEPENDENTLY VERIFIED FOR ACCURACY, COMPLETENESS AND TIMELINESS. YOU SHOULD SEEK INDEPENDENT AND PROFESSIONAL INVESTMENT ADVICE IN REGARD TO YOUR INVESTMENT DECISIONS. THE AUTHOR MAY HOLD POSITIONS IN THE SECURITIES OR RELATED INSTRUMENTS MENTIONED ABOVE.

Author: Ken Utau

Markets Observer + Food Lover

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