Excel – http://1drv.ms/1mEz5TV
– Fair values/Market Timing:
– 5Y DCF: 8.33 – 9.65 (MOS: -15% – 1%)
– EY%: Buy below 8.50, sell above 10.40 (8.18%)
– All models indicate that SIME is near-fully valued.
– In the near-term, I expect Sime’s earnings growth to continue to be moderate. Historically, Plantation division contributes circa 50-60% to the Group’s profit. Going forward, I do not foresee a significant PBT growth from Plantation division in the next 6-12 months as
i. CPO prices are expected to average at around RM2700pmt (price impact from the anticipated El-Nino occurrence would only be seen in 2H15),
ii. FFB output growth is projected to be flattish at best.
Furthermore, I also expect profit from Industrial division to remain flat in view of the expected slowdown in Australian mining sector.
– For the time being, I won’t add position, but of course, I will continue to hold SIME (hopefully it will ride up..….)
Latest Financial – Q3 2014 Financial Report (29 May 2014) http://www.bursamalaysia.com/market/listed-companies/company-announcements/1638889
At the time of writing, I owned shares of SIME.