PADINI – Fundamental Analysis (21 Nov 2014)

PADINI Analysis:-

Excel – http://1drv.ms/1xUnYNu

My View:-

- Fair value
  – Absolute EY%:
    – Trailing:
      – FY14 (EPS: 0.138) – Fair value 1.84 (Fair Value Uncertainty: HIGH)
      – R4Q (EPS: 0.138) – Fair value 1.84 (Fair Value Uncertainty: HIGH)
    – Forward:
      – FY15 (EPS: 0.158) – Fair value 2.11 (Fair Value Uncertainty: MEDIUM)
      – FY16 (EPS: 0.173) – Fair value 2.31 (Fair Value Uncertainty: MEDIUM)
    – EPS applied to reach the current stock price (1.73): 0.13
- In my opinion, at 1.73, I think PADINI valuation is attractive due to
i) attractive dividend yield of 8%
ii) commendable top line growth backed by aggressive expansion
iii) BO stores targeting the value-for-money segment which will do well in current economic environment
iv) highly experienced management team with a strong local retail market knowledge
v) Expected to regain its Shariah compliant status in November 2014 – It had addressed the issue by reallocating a portion of its cash into Islamic instruments in order to be in compliant with the requirement of the SC’s List.
- For recent sector analysis, please read http://lcchong.files.wordpress.com/2014/03/apparels-the-busy-weekly-15032014.pdf

Latest Financial – Annual Report 2014 (27 Aug 2014) http://www.bursamalaysia.com/market/listed-companies/company-announcements/1799353

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

SUNWAY – Fundamental Analysis (21 Nov 2014)

SUNWAY Analysis:-

Excel – http://1drv.ms/1uGWB8o

My View:-

- Fair value:
  – Absolute EY%:
    – Trailing:
      – FY13 (EPS: 0.3) – Fair value 3.25 (Fair Value Uncertainty: HIGH)
      – R4Q (EPS: 0.91) – Fair value 9.86 (Fair Value Uncertainty: LOW)
    – Forward:
      – FY14 (EPS: 0.274) – Fair value 2.97 (Fair Value Uncertainty: HIGH)
      – FY15 (EPS: 0.299) – Fair value 3.24 (Fair Value Uncertainty: HIGH)
    – EPS applied to reach the current stock price (3.27): 0.302
- Moreover, Sunway’s integrated construction-property business model should give them an edge in terms of execution
- 9M14 locked-in property sales of MYR951m (accounting for just Sunway’s effective stake in some JVs) met 73% of its MYR1.3b internal target for 2014. Unbilled sales were MYR2.1b at end-Sep 2014.
- Sunway’s construction division has, YTD, secured MYR881m worth of works – all internal. This has lifted its outstanding order book to MYR3.3b at end-Sep 2014 (67% external). Management maintains its MYR2.5b job win target for FY14 (including  internal construction contracts).

Latest Financial – Q3 2014 Financial Report (18 Nov 2014) http://www.bursamalaysia.com/market/listed-companies/company-announcements/1797693

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

AIRASIA – Fundamental Analysis (20 Nov 2014)

AIRASIA Analysis:-

Excel – http://1drv.ms/1Alp2gO

My View:-

- Fair Value
  – Absolute EY% Valuation
    – Trailing:
      – FY13 (EPS: 0.13) – Fair value 1.99 (Fair Value Uncertainty: HIGH)
      – R4Q (EPS: 0.272) – Fair value 4.16 (Fair Value Uncertainty: MEDIUM)
    – Forward:
      – FY14 (EPS: 0.177) – Fair value 2.7 (Fair Value Uncertainty: HIGH)
      – FY15 (EPS: 0.268) – Fair value 4.08 (Fair Value Uncertainty: MEDIUM)
    – EPS applied to reach the current stock price (2.44): 0.16
- I take the view that the domestic aviation sector has seen its worst and are now on a recovery phase with competition intensity lessening and lower fuel price going forward
- Yields  are  at  an  inflection  point.  With MAS restructuring and the likelihood of its 20-30% capacity cut  next year, the upward  airfare  pricing rationalisation  is expected to kick in on a stronger note then.
- TAA to turnaround in 4Q14. Looking forward, management expects a more rationale market as competitors have been reducing capacity in line with AirAsia to optimize profit levels in Malaysia. In Thailand, management expects TAA to return to profit in 4Q14 and will continue adding capacity in 2015. In Indonesia, IAA is expected to be profitable as it will continue be focusing on cost reduction exercise.
- Net increase of 5 aircraft in 2015. Of the 13 new aircraft scheduled for delivery in 2015, AirAsia will defer 4 aircraft deliveries and swap to NEO. Also, it will put 4 aircraft to the market for sale. With the balance of 5 new aircraft, one will be allocated for MAA’s operations and 4 will be allocated for TAA’s operations in 2015.
- Fuel cost trends are improving with even lower spot jet fuel price in 4Q14 and as Airasia works off its remaining fuel hedges by year end. For FY15, only 12% of requirement is hedged, which means the full benefit of cheaper jet fuel should trickle in more significantly in 1Q15.

Latest Financial – Q3 2014 Financial Report (20 Nov 2014) http://www.bursamalaysia.com/market/listed-companies/company-announcements/1798989

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

DIALOG – Fundamental Analysis (19 Nov 2014)

DIALOG Analysis:-

Excel – http://1drv.ms/1qWoWnn

My View:-

- Fair values:
  – Absolute EY% valuation:
    – Trailing:
      – FY14 (EPS: 0.044) – Fair value 1.53 (Fair Value Uncertainty: HIGH)
      – R4Q (EPS: 0.044) – Fair value 1.54 (Fair Value Uncertainty: HIGH)
    – Forward:
      – FY15 (EPS: 0.047) – Fair value 1.63 (Fair Value Uncertainty: HIGH)
      – FY16 (EPS: 0.051) – Fair value 1.77 (Fair Value Uncertainty: HIGH)
    – EPS applied to reach the current stock price (1.5): 0.043
- Based on the current price, DIALOG is just slightly undervalued.
- The group is bullish on the prospects of Pengerang as it expects the demand for storage facilities to increase. Management further noted that construction of Phase 1C, which will provide storage for crude oils, is on schedule and due for mechanical completion by December 2014.
- DIALOG is also banking-in on growth from the upstream services, logistics services – tank terminals and supply base, specialist products and services, E&C, fabrication, plant services and ePayment technology and solutions.

Latest Financial – Q1 2015 Financial Report (18 Nov 2014) http://www.bursamalaysia.com/market/listed-companies/company-announcements/1797329

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

DELEUM – Fundamental Analysis (18 Nov 2014)

DELEUM Analysis:-

Excel – http://1drv.ms/1EXdfVM

My View:-

- Fair Value
  – Absolute EY% Valuation:
    – Trailing:
      – FY13 (EPS: 0.124) – Fair value 1.22 (Fair Value Uncertainty: VERY HIGH)
      – R4Q (EPS: 0.143) – Fair value 1.41 (Fair Value Uncertainty: VERY HIGH)
    – Forward:
      – FY14 (EPS: 0.142) – Fair value 1.4 (Fair Value Uncertainty: VERY HIGH)
      – FY15 (EPS: 0.171) – Fair value 1.69 (Fair Value Uncertainty: HIGH)
    – EPS applied to reach the current stock price (1.69): 0.171
- The long term outlook looks bright for Deleum, with a RM3.5bn orderbook lasting up to 7 years and 2 major contracts commencing in FY14.
- The slump of brent crude oil futures is having an effect on the level of activities of the O&G producers and contractors in Malaysia.

Latest Financial – Q3 2014 Financial Report (17 Nov 2014) http://www.bursamalaysia.com/market/listed-companies/company-announcements/1795733

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

GASMSIA – Fundamental Analysis (17 Nov 2014)

GASMSIA Analysis:-

Excel – http://1drv.ms/1wLUDS8

My View:-

  • Fair Value:
  • Absolute EY%:
  • Trailing:
  • FY13 (EPS: 0.134) – Fair value 3.51 (Fair Value Uncertainty: HIGH)
  • R4Q (EPS: 0.144) – Fair value 3.77 (Fair Value Uncertainty: MEDIUM)
  • Forward:
  • FY14 (EPS: 0.148) – Fair value 3.89 (Fair Value Uncertainty: MEDIUM)
  • FY15 (EPS: 0.16) – Fair value 4.19 (Fair Value Uncertainty: MEDIUM)
  • EPS applied to reach the current stock price (3.48): 0.132
  • Volume growth in 2015 requires further
    1) price hikes or
    2) deferment of the reduction in regulated gas quota (from 382 to 300mmscfd) for GMB to preserve spreads.
    These events require approval from the Energy Commission and/or PETRONAS. There are substantial regulatory risks involved.
  • GASMSIA is typical a defensive stock, but current dividend yield is 3.8%. Besides, GASMSIA is just slightly undervalued. Looking at my current portfolio, I am keen to buy GASMSIA, but I don’t want to over-expose to the O&G industry.

Latest Financial – Q3 2014 Financial Report (12 Nov 2014) http://www.bursamalaysia.com/market/listed-companies/company-announcements/1792277

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

GAB – Fundamental Analysis (17 Nov 2014)

GAB Analysis:-

Excel – http://1drv.ms/1zuRMAy

My View:-

- Fair values:
  – 5-Y DCF:
    – Good Scenario: 15.70 (Fair value uncertainty: MEDIUM)
    – Base Scenario: 13.69 (Fair value uncertainty: HIGH)
    – Bad Scenario: 11.90 (Fair value uncertainty: VERY HIGH)
    – Ugly Scenario: 10.31 (Fair value uncertainty: EXTREME)
  – Absolute EY% Valuation:
    – Trailing:
      – FY14 (EPS: 0.656) – Fair value 14.02 (Fair Value Uncertainty: MEDIUM)
      – R4Q (EPS: 0.673) – Fair value 14.37 (Fair Value Uncertainty: MEDIUM)
    – Forward:
      – FY15 (EPS: 0.666) – Fair value 14.22 (Fair Value Uncertainty: MEDIUM)
      – FY16 (EPS: 0.697) – Fair value 14.88 (Fair Value Uncertainty: MEDIUM)
    – EPS applied to reach the current stock price (13.2): 0.618
- At the current price, fair value uncertainty for both models are from MEDIUM to HIGH. GAB is still slightly undervalued.
- 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.

Latest Financial – Q1 2015 Financial Report (14 Nov 2014) http://www.bursamalaysia.com/market/listed-companies/company-announcements/1794305

At the time of writing, my family member owned shares of GAB.