What you bulls on MCE fail to appreciate is that the EBIT margin at over 30% is unsustainable.
Competitors, as well as MCE, are increasing production capacity and in my opinion a margin closer to 15% is highly likely in coming years.
Yes, MCE has the most efficient new plant but making the bouyancy products is similar to making sausages. Putting ingredients into a skin and cooking it. It is a commodity product and the producer with the lowest price will win the order.
The high $A is also a negative.
There is a boom on at the moment for bouyancy units for new oil rigs and replacement units in production rigs but it is risky to assume this boom will continue for years.
What you bulls on MCE fail to appreciate is that the EBIT margin...
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33.0¢ |
Change
0.015(4.76%) |
Mkt cap ! $72.45M | |||
| Open | High | Low | Value | Volume |
| 31.5¢ | 33.0¢ | 31.5¢ | $19.32K | 59.62K |
Buyers (Bids)
| No. | Vol. | Price($) |
|---|---|---|
| 1 | 2500 | 32.0¢ |
Sellers (Offers)
| Price($) | Vol. | No. |
|---|---|---|
| 33.0¢ | 33425 | 2 |
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| Last trade - 15.07pm 02/09/2024 (20 minute delay) ? |
| MCE (ASX) Chart |