PCHEM – Fundamental Analysis (26 Aug 2014)

PCHEM Analysis:-

Excel – http://1drv.ms/1qIJfn2

My View:-

– Fair values:
  – 5-Y DCF:
    – 8.86 – 10.03 (MOS: 28% – 36%) – The assumption is PCHEM just need to grow its FCF with 4% CAGR in the future five years. I think this is achievable.
  – Absolute EY%:
    – Trailing:   
      – FY13 (EPS: 0.393) – Buy below 5.79, fair value 7.39 (MOS: 13.5%)
      – R4Q (EPS: 0.298) – Buy below 4.39, fair value 5.61 (MOS: -14.1%)
    – Forward:   
      – FY14 (EPS: 0.43) – Buy below 6.34, fair value 8.09 (MOS: 20.9%)
      – FY15 (EPS: 0.465) – Buy below 6.85, fair value 8.75 (MOS: 26.9%)
    – EPS applied to reach the current stock price (6.4): 0.34   
– I do not expect that earnings in FY14 will match that of FY13 despite the end of major turnaround activities. There will be other smaller planned maintenance exercise which will not severely impact overall group earnings. However, I think that this is a short term problem. In long term, growth drivers of PCHEM are still intact.
– My family member accumulated some shares yesterday at 6.42, and will continue to hold and accumulate.

Latest Financial – Q2 2014 Financial Report (11 Aug 2014) http://www.bursamalaysia.com/market/listed-companies/company-announcements/1706501

At the time of writing, my family member owned shares of PCHEM. She bought this stock below 6.00 last time. From now on, I will keep track this stock for her.


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