UCHITEC – Fundamental Analysis (26 Aug 2014)

UCHITEC Analysis:-

Excel – http://1drv.ms/1wx3D3k

My View:-

– Fair value:
  – Absolute EY%
      – Trailing:   
        – FY13 (EPS: 0.106) – Buy below 1.08, fair value 1.32 (MOS: -8%)
        – R4Q (EPS: 0.115) – Buy below 1.18, fair value 1.44 (MOS: 0.9%)
      – Forward:   
        – FY14 (EPS: 0.116) – Buy below 1.18, fair value 1.45 (MOS: 1.6%)
        – FY15 (EPS: 0.125) – Buy below 1.28, fair value 1.57 (MOS: 8.6%)
      – EPS applied to reach the current stock price (1.43): 0.114   
  – UCHITEC is fully valued.
– UCHITEC has low earning visibility/predictability.
– Although its dividend payout maintains above 80%, its Dividend Yield has been declining from 10% to 7%.
  – On one hand, at 1.41, you are still able to enjoy 7% dividend yield
  – On the other hand, is it possible for UCHITEC maintain high dividend payout while its net profit and free cash flow has been declining since 2008?
– Though 1H14 earnings rose 8.3% yoy, EBITDA margin declined by 3.5% pts on the back of lower shipment volumes and higher labour and utilities costs. Management is guiding for flat shipment volume in the 2H due to uncertainty in global economy and industry demand.
– I will consider UCHITEC as a turnaround stock, and place it in my Watch List.

Latest Financial – Q2 2014 Financial Report (19 Aug 2014) http://www.bursamalaysia.com/market/listed-companies/company-announcements/1713941

At the time of writing, I did not own shares of UCHITEC.

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