MSH – Long-term buy on short-term weakness – Update

• Solid FY19F net profit growth on the back of product mix improvement.
• Short-term challenge from Covid-19 outbreak.
• We lowered our FY20F revenue and NP forecast by 6.8% and 19.8%, respectively.
• MSH is trading at 4.5x FY20F P/E, the lowest in one year. We believe this is an opportunity to buy a long-term play with attractive dividend yield at cheap valuation.
• Total reliance on imported fabric and risk of losing foreign clients due to competition will be the disadvantages for MSH.

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