BRAHIMS – Fundamental Analysis (18 Sept 2014)

BRAHIMS Analysis:-

Excel – http://1drv.ms/1r20Zy1

My View:-

- Fair Value:
  – Absolute EY%
    – Trailing:
      – FY13 (EPS: 0.101) – Fair value 2.71 (Fair Value Uncertainty: LOW)
      – R4Q (EPS: 0.104) – Fair value 2.79 (Fair Value Uncertainty: LOW)
    – Forward:
      – FY14 (EPS: 0.103) – Fair value 2.75 (Fair Value Uncertainty: LOW)
      – FY15 (EPS: 0.119) – Fair value 3.17 (Fair Value Uncertainty: LOW)
    – EPS applied to reach the current stock price (1.34): 0.05
- Although this counter is currently undervalued, there are too many uncertainties in Brahim’s business.
- For the time being, I will place this stock in the Study List.

Latest Financial – Q2 2014 Financial Report (26 Aug 2014) http://www.bursamalaysia.com/market/listed-companies/company-announcements/1721213

At the time of writing, I did not own shares of BRAHIMS.

GKENT – Fundamental Analysis (19 Sept 2014)

GKENT Analysis:-

Excel – http://1drv.ms/1sB4z3J

My View:-

- Fair value:
  – Absolute EY%:
    – Trailing:   
      – FY14 (EPS: 0.161) – Fair value 2.13 (Fair Value Uncertainty: LOW)
      – R4Q (EPS: 0.126) – Fair value 1.68 (Fair Value Uncertainty: MEDIUM)
    – Forward:   
      – FY15 (EPS: 0.141) – Fair value 1.87 (Fair Value Uncertainty: MEDIUM)
      – FY16 (EPS: 0.155) – Fair value 2.06 (Fair Value Uncertainty: LOW)
    – EPS applied to reach the current stock price (1.58): 0.119   
  – I think GKENT is still undervalued. If we just looking at the current EY% and FCFY%, the EY% and FCFY% are 10.2% and 28.5%.
- GKENT has very strong competitive advantages where it is in a very good position in building wide economic moats.
- On 30 May 2014, GKENT completed the construction of the Semantan Intake Pahang-Selangor raw water transfer project, which was delivered on schedule. The completion of the former and the recognition of the tail-end revenue of the latter were the main reasons for the Group’s decline in its quarter-on-quarter revenue.
- I will accumulate GKENT as it is having correction now.

Latest Financial – Q2 2014 Financial Report (17 Sept 2014) http://www.bursamalaysia.com/market/listed-companies/company-announcements/1741749

At the time of writing, I owned shares of GKENT.

KIANJOO – Fundamental Analysis (17 Sept 2014)

KIANJOO Analysis:-

Excel – http://1drv.ms/Zp8jtk

My View:-

- Fair value:
  – 5-Y DCF:
    – Base Scenario: 3.93 (Fair Value Uncertainty: LOW)
    – Good Scenario: 4.45 (Fair Value Uncertainty: LOW)
    – Bad Scenario: 3.46 (Fair Value Uncertainty: MEDIUM)
  – Absolute EY%:
    – Trailing:   
      – FY13 (EPS: 0.266) – Fair value 2.97 (Fair Value Uncertainty: HIGH)
      – R4Q (EPS: 0.232) – Fair value 2.59 (Fair Value Uncertainty: VERY HIGH)
    – Forward:   
      – FY14 (EPS: 0.287) – Fair value 3.2 (Fair Value Uncertainty: MEDIUM)
      – FY15 (EPS: 0.318) – Fair value 3.55 (Fair Value Uncertainty: MEDIUM)
    – EPS applied to reach the current stock price (3.01): 0.27   
- I think that KIANJOO is currently undervalued.
- Given the on-going uncertainties surrounding its corporate exercise, I continue to see its share price movement being lackluster.
- If the proposed transaction materializes, you will have a certain RM3.36 per share in your pocket (RM3.30 cash offer + 6.25sen dividend recently paid).
- If not, we will still see that value materializing, but over the longer term as it remains imperative parent-company Can-One squeeze out further operational improvements (and essentially stronger earnings, thereby increasing its intrinsic value) from KJC for greater dividend income.
- I think KJC’s growth prospects will continue to be valid as depicted by its consistent sales growth despite the steep contraction in earnings in 1HFY14 (-24.3% YoY). This was chiefly due to its continuous capacity expansion with the most recent in Indonesia. Although the contraction in operating margin was steep in 1HFY14, it is inconsistent with recent historical trend and as such, it may not sustainable on the back of economies of scale and its price escalation mechanism especially for the aluminium cans segment. On the other hand, KJC is good for healthy balance sheet and dividend yield.
- After studied story of KIANJOO and CANONE, I found that KIANJOO’s management provided very limited access and information flow. Delays in finalizing the privatization deal has also put further pressure on its share price, which closed at RM3.01 (17 Sep 2014), raising the possibility for the privatization to go through at RM3.30/share.
- Due to the uncertainties, I will revisit KIANJOO if the privatization does not take effect and if circumstances are warranted.

Latest Financial – Q2 2014 Financial Report (28 Aug 2014) http://www.bursamalaysia.com/market/listed-companies/company-announcements/1725593

At the time of writing, I did not own shares of KIANJOO.

CANONE – Fundamental Analysis (16 Sept 2014)

CANONE Analysis:-

Excel – http://1drv.ms/YNOLyT

My View:-

- Fair Value:
  – Absolute EY%:
    – Trailing:   
      – FY13 (EPS: 0.457) – Fair value 3.63 (Fair Value Uncertainty: MEDIUM)
      – R4Q (EPS: 0.463) – Fair value 3.68 (Fair Value Uncertainty: MEDIUM)
    – Forward:   
      – FY14 (EPS: 0.48) – Fair value 3.81 (Fair Value Uncertainty: MEDIUM)
      – FY15 (EPS: 0.504) – Fair value 4 (Fair Value Uncertainty: MEDIUM)
    – EPS applied to reach the current stock price (2.48): 0.312   
- As of now, valuation of CANONE looks quite attractive.
- I have to further study this counter and compare with its competitors.
  – Another thing I need to study is the story of KIANJOO and CANONE.
- I will put this stock in my watch list for the time being.

Latest Financial – Q2 2014 Financial Report (28 Aug 2014) http://www.bursamalaysia.com/market/listed-companies/company-announcements/1725717

At the time of writing, I did not own shares of CANONE.

OCK – Fundamental Analysis (15 Sept 2014)

OCK Analysis:-

Excel – http://1drv.ms/1qn7dHm

My View:-

- Fair values:
  – Absolute EY%:
    – Trailing:   
      – FY13 (EPS: 0.05) – Fair value 1.12 (Fair Value Uncertainty: VERY HIGH)
      – R4Q (EPS: 0.049) – Fair value 1.1 (Fair Value Uncertainty: VERY HIGH)
    – Forward:   
      – FY14 (EPS: 0.07) – Fair value 1.57 (Fair Value Uncertainty: HIGH)
      – FY15 (EPS: 0.09) – Fair value 2.02 (Fair Value Uncertainty: MEDIUM)
    – EPS applied to reach the current stock price (1.44): 0.064   
- I will revisit OCK after completion of the purchase of an 85% stake in PT Putra Mulia Telecommunication (PMT). My worry is Indonesia government may interfere this acquisition.
- If the acquisition is successful, I will seriously consider to buy this stock.

Latest Financial – Q2 2014 Financial Report (28 Aug 2014) http://www.bursamalaysia.com/market/listed-companies/company-announcements/1724733

At the time of writing, I did not own shares of OCK.

GAB – Fundamental Analysis (15 Sept 2014)

GAB Analysis:-

Excel – http://1drv.ms/1tvAlym

My View:-

- Fair values:
  – 5-Y DCF:
    – Base Scenario: 11.88 (Fair value uncertainty: VERY HIGH)
    – Good Scenario: 13.63 (Fair value uncertainty: HIGH)
    – Bad Scenario: 10.32 (Fair value uncertainty: EXTREME)
  – Absolute EY% Valuation:
    – Trailing:   
      – FY14 (EPS: 0.656) – Fair value 14.18 (Fair Value Uncertainty: MEDIUM)
      – R4Q (EPS: 0.656) – Fair value 14.18 (Fair Value Uncertainty: MEDIUM)
    – Forward:   
      – FY15 (EPS: 0.64) – Fair value 13.83 (Fair Value Uncertainty: HIGH)
      – FY16 (EPS: 0.669) – Fair value 14.46 (Fair Value Uncertainty: MEDIUM)
    – EPS applied to reach the current stock price (13.12): 0.607   
- At the current price, fair value uncertainty for both models are from MEDIUM to HIGH.
- The dividend return spread between GAB and CARLSBG vs the 10-year MGS yield has narrowed to only 30-40bpts vs the  historical  10-year average of 280-290bpts. (Source: RHB)
- GAB’s focus on FY15 would be on better cost management by enhancing its efficiency and capability, while the product strategy would see better innovation with more quality new addition to its product portfolio. (Aug 2014)
  – In FY15, GAB plans to manage its cost more prudently by improving operational efficiency. Besides, the Group also expects to increase its portfolio by introducing more new products through innovation. New products launched in FY14, including Kirin Ichiban, the best-selling super premium brand in Japan and Smirnoff Ice, the world number 1 RTD brand which received good response, which was reflected in 4Q14 sales growth of 10.8% QoQ. Meanwhile, GAB would still be counting on its core brands, namely Heineken, Tiger and Guinness moving forward in sustaining the sales volume. Although GAB did not reveal the sales figure of the brands, we gathered that Heineken recorded the best sales growth among the core brands, followed by Tiger and Guinness in FY14.
- GAB expects the Malt Liquor Market (MLM) moving forward to remain competitive and challenging, in view of the unfair competition from contraband beers, of which the sales price per unit is lower than the excise duty alone imposed on GAB’s beers as Malaysia has the second highest excise duties for beer and stout products in the world. Meanwhile, the Group is also concerned on the imminent implementation of the GST in April 2015, which may further dent the consumer sentiment and thus discretionary spending.
- 2014/15 will be a challenging year for brewers due to competition from contrabrand beers and as consumer spending dwindles.
- In my opinion, there is still some downside risk even though the share prices of both stocks have fallen sharply from last year’s peaks (down 30-45%). 11.60 – 13.00 is a good support zone, from fundamental and technical aspect. Chances of GAB dropping below this zone is low.
- If GAB manage to achieve growth in FY15, that means GAB have managed the [impact of] GST and played the market share game well. If that happens, GAB will be good to go.
- GAB will not make any profit out of the GST, but they need to get the margins right for the distributors and they need to recommend the distributor price. However, they cannot set pricing in the whole tier system.
- I may accumulate GAB if GAB declines below 12.50.

Latest Financial – Q4 2014 (Interim FY14) Financial Report (21 Aug 2014) http://www.bursamalaysia.com/market/listed-companies/company-announcements/1716397

At the time of writing, I owned shares of GAB.