Our opinion on the current state of MUSTEK(MST)Mustek (MST) is South Africa's largest assembler of personal computers under its brand name Mercer. It also imports a variety of computer products, including Samsung, Acer, and Microsoft. The company consistently trades well below its net asset value (NAV).
Mustek is beginning to benefit from its fibre-to-the-home activities and is selling additional hardware as a result. The CEO, David Kan, is very excited about the exploitation of the fibre-to-the-home market. He believes there can be exponential growth of as much as 500% in their sales of cables for this market. There is also a possibility that the company will benefit from the increased demand for remote education and work-from-home solutions following COVID-19. Mustek is well-positioned to exploit this through its existing products.
In its results for the year to 30th June 2024, the company reported revenue down 16% and headline earnings per share (HEPS) down 82.1%. The company stated, "Prevailing uncertainty froze corporate and government spending, and the unexpected abatement of loadshedding abruptly ended the green energy boom, which fuelled our growth last year. Reduced demand for green energy products plunged us into a dark period with surplus stock in a hostile macro-economic environment with high interest rates."
Despite the negative results, the share seems cheap, and it has broken up through its 200-day moving average, which looks positive.
