Complete Company Valuation – A Long Overdue

I have shared my framework of fundamental analysis (as below) with some people before.



If you ever study my excel thoroughly, you probably notice that I do not publish one part in my analysis. That is projection of future earnings and book value, which is part of Company Valuation.


The main reason I did not publish the projection is because I did not format the worksheet properly, and sometimes I just use calculator and paper to do projection. For reduce administrative overhead, I will attempt to incorporate my projection model for each company (if possible) in my analysis. This is a long term on-going project where I will gradually publish projection model for each company in my portfolio.

BTW, I hope that you can differentiate the difference between Company Valuation and Fair Value Estimation. Please check out the following illustrations.



AIRASIA – Fundamental Analysis (18 Sep 2016)

Analysis for Q2 2016 Financial Report (29 Aug 2016):

  1. Summary
  2. Detailed Analysis

DAYANG – Fundamental Analysis (12 Sep 2016)

Analysis File – Excel or PDF

Latest Financial – Q2 2016 Financial Report (24 Aug 2016)


PCHEM–Fundamental Analysis (9 Sep 2016)

Excel –

Latest Financial – Q2 2016 Financial Report (9 Aug 2016)

FY16 Q2 Results Highlight:

  • QoQ
    • Bottomline (+9% QoQ) was boosted by the combination of higher sales volume and product prices, which more than offset a weaker USD.
    • Plant utilization inched up to 94% (1QFY16: 92%) on improved methane and ethane supply. In 2QFY16, merely one aromatics plant underwent statutory turnaround (TA) (1QFY16: one propylene plant).
  • YTD
    • Profits were mainly boosted by cost efficiencies from stronger plant utilisation, and stronger sales volumes for Fertilisers & Methanol (F&M).
    • To a lesser extent, a stronger USD in 1H16 also boosted bottomline. This more than eclipsed the impact of lower ASPs.
  • PCHEM’s normal tax rates hover at 20-23%. This is likely temporary, as PCHEM will enjoy Investment Tax Allowance on its SAMUR project to be commissioned at end of 2Q16.

Going Forward:

  • In the next 1-2 years, I think PCHEM earnings may be inconsistent because ASPs are weakening in tandem with the drop in global crude oil prices as demand remains volatile due to the uncertainties surrounding the broader economy.
  • PCHEM’s business is defensive, plus its unrivalled production cost and balance sheet strength. It is also now viewed as a growth company, with a series of plant commissioning in the pipeline all the way to 2019. All these new projects will bring it up in the value chain and ensures strong demand with decent margins.
  • In my opinion, fair value of PETGAS is from 6.5 to 7.0 (Uncertainty Risk: HIGH).
  • Valuations may not very compelling, but not bad. PCHEM still appeals to funds seeking earnings stability
  • I will continue to accumulate this counter for my family member.

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

PETGAS–Fundamental Analysis (11 May 2016)

Excel – Download the analysis file

Latest Financial – Q2 2016 Financial Report (9 Aug 2016)

FY16 Q2 Results Highlight:

  • YoY:
    • PETGAS’s revenue for 1HFY16 sustained at RM2.2b, an increase of 3.0% compared to 1HFY15. This is primarily driven by higher utilities revenue, as a result of higher average sales prices to customers in line with upward fuel gas price revision effective 1 Jan 2016, Performance Based Structure income and regasification revenue.
    • PBT stood firm at RM1.1b, a marginal decrease of 2.0% compared to 1HFY15 due to higher operating costs. However, EBITDA were higher by 0.3%.
  • QoQ:
    • 2QFY16 revenue grew by 3.0% yoy to RM2.25bn, mainly driven by the utilities segment which saw higher offtake by customers and benefitted from upward revision in fuel gas price on 1 Jan 2016. Nonetheless, PGas’
    • 2QFY16 EBITDA margin fell by 7.1ppt to 61.9% mainly due to higher repair and maintenance costs in both the gas processing and transportation segments, as well as higher storage costs in the regasification segment as a result of the weak RM.

Going Forward:

  • The stock price movement of PetGas has been fairly resilient, trading sideways within the band of RM21-23 per share since mid-August 2014 despite the >-50% drop in global crude oil prices
  • Upside room of this stock is slightly limited due to a lack of fresh catalysts (the Pengerang regasification terminal will only come onstream at the end of the decade)
  • In my opinion, fair value of PETGAS is from 22.3 to 23.5 (Uncertainty Risk: from MEDIUM to HIGH).
  • Valuations may not very compelling, but not bad. PETGAS still appeals to funds seeking earnings stability
  • I will continue to hold PETGAS, and may accumulate PETGAS in the future.

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

PETGAS vs. Other Regulated Gas Companies – ROIC%

Today, I compared ROIC of #PETGAS with other top regulated gas companies in the world. A picture is worth a thousand words…


DLADY – Fundamental Analysis (6 Sep 2016)

Excel – Download the analysis file

Latest Financial – Q2 2016 Financial Report (23 Aug 2016)

FY16 Q2 Results Highlight:

  • 1HFY16 revenue grew 4.5% to RM496.5m. 1HFY16 gross profit climbed 12.4% to RM215.5m, propelled by 3ppt expansion in gross margin due to the favorable raw material prices.
    • 1HFY16 PBT growth was milder in comparison (+9.3% to RM96.9m) due to the higher operating expenses (+14.9%) as DLADY has reinvested the savings from raw material costs into brand-building initiatives. As a result, 1HFY16 net profit grew 7.3% to RM70.6m.
  • 2QFY16 revenue was flattish (-1.2%) at RM246.7m. Meanwhile, the gross profit margin was little changed at 43.3% as compared to 43.5% recorded in 1QFY16 as milk powder prices were relatively stable during the period which resulted in marginal decline in 2QFY16 gross profit (-1.6%), in line with the slight drop in revenue.
    • However, 2QFY16 PBT managed to jump by 11.6% to RM51.1m driven by lower operating expenses (-7%) which we think was attributable to the difference in marketing expenses and the gain in derivatives contracts. As a result, 2QFY16 net profit grew 8.3% to RM36.7m, slightly dragged down by the higher effective tax rates of 28.2% (vs 1QFY16: 26.0%).


Going Forward:

  • I am positive with DLADY’s future:
    • Its solid fundamentals and strong branding position
    • Aggressive marketing and promotional activities
    • Robust demand of diary product in the long-term as Malaysia’s population is projected to reach 38 million people by 2040 from 30 million currently.
  • In my opinion, fair value of DLADY is from 55 to 62 (Uncertainty Risk: from HIGH to VERY HIGH).
  • I will continue to hold and accumulate this stock for my kids.

At the time of writing, my family members owned shares of DLADY.