SIME – Fundamental Analysis (3 Sep 2014)

SIME Analysis:-

Excel – http://1drv.ms/1CoLHbp

My View:-

– Fair values/Market Timing:
  – 5Y DCF:
    – 6.7 – 7.79 (Fair Value Uncertainty is HIGH)
  – Absolute EY%:
    – Trailing:   
      – FY14 (EPS: 0.556) – Fair value 8.75 (Fair Value Uncertainty: HIGH)
      – R4Q (EPS: 0.556) – Fair value 8.75 (Fair Value Uncertainty: HIGH)
    – Forward:   
      – FY15 (EPS: 0.579) – Fair value 9.12 (Fair Value Uncertainty: HIGH)
      – FY16 (EPS: 0.63) – Fair value 9.92 (Fair Value Uncertainty: HIGH)
    – EPS applied to reach the current stock price (9.48): 0.602   
  – Both models indicate either overvalued or fully valued. Also, the uncertainty of fair values are high.
– The share price driver will be the potential spin off exercise within SIME business divisions which should allow SIME valuation to be rerated higher as it should emerge as pure planter. As it is, it has been reported by media quoting Tan Sri Mohd Bakke Salleh specifying that the listing of its motor unit is set to be executed in 1HCY15 subject to market conditions.
– I will continue to hold SIME.

Latest Financial – Q4 2014 Financial Report (29 Aug 2014) http://www.bursamalaysia.com/market/listed-companies/company-announcements/1726089

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

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