PETGAS – Fundamental Analysis (16 Aug 2014)

PETGAS Analysis:-

Excel – http://1drv.ms/VslYO3

My View:-

– Fair value
  – Absolute EY%:
    – FY13-EPS (EPS: 1.051) – Buy below 24.89, sell above 29.87 (MOS: 24%)
    – R4Q-EPS (EPS: 0.822) – Buy below 19.48, sell above 23.37 (MOS: 3%)
    – FY14-EPS (EPS: 0.875) – Buy below 20.72, sell above 24.87 (MOS: 9%)
    – FY15-EPS (EPS: 0.922) – Buy below 21.85, sell above 26.22 (MOS: 14%)
    – EPS applied to reach the current stock price (22.64): 0.796
  – Absolute DCF:
    – PETGAS’s DCF is declining in long term due to heavy capex. In theory, DCF is not suitable for PETGAS
    – However, based on its decline rate at -2%, PETGAS still worth RM29-34 based on 5-Y projection.
– 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).
– Valuations may not very compelling, but not bad. PETGAS still appeals to funds seeking earnings stability.
– I will continue to hold PETGAS.

Latest Financial – Q2 2014 Financial Report (8 Aug 2014) http://www.bursamalaysia.com/market/listed-companies/company-announcements/1706157

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

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