Excel – http://1drv.ms/1tBEcZJ
– Fair Value:
– Absolute EY%:
– FY13 (EPS: 0.134) – Buy below 2.74, fair value 3.43 (MOS: -3.9%)
– R4Q (EPS: 0.138) – Buy below 2.82, fair value 3.54 (MOS: -0.7%)
– FY14 (EPS: 0.149) – Buy below 3.05, fair value 3.81 (MOS: 6.7%)
– FY15 (EPS: 0.164) – Buy below 3.36, fair value 4.2 (MOS: 15.3%)
– EPS applied to reach the current stock price (3.56): 0.139
– With barely any change in its profit margin spread under the new tariff, FY14 is expected to be another strong year with full-year earnings impact from the 40MMScfd gas supply which started from July 2013 and another new additional 30MMScfd commencing Jan 2014 from the Melaka RGT.
– However, it may not be easy for GASMSIA to sustain profit margin spread going forward given the dynamic of LNG prices. Nonetheless, forward business volume will be supported by the last portion of the 40MMScfd additional gas supply from the Melaka RGT which will be coming on-stream in Jan 2015.
– Moving forward, price revision every six months for subsidised volume could hand some compensation to GMB should LNG price rising.
– 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 – Q2 2014 Financial Report (20 Aug 2014) http://www.bursamalaysia.com/market/listed-companies/company-announcements/1715781
At the time of writing, I did not own shares of GASMSIA.