OLDTOWN – Fundamental Analysis (30 Sept 2014)

OLDTOWN Analysis:-

Excel – http://1drv.ms/1vrjb5H

My View:-

– Fair value:
  – 5Y DCF:
    – Base Scenario (10%): 1.58 (Fair Value Uncertainty: VERY HIGH)
    – Good Scenario (14%): 1.79 (Fair Value Uncertainty: HIGH)
    – Bad Scenario (6%): 1.40 (Fair Value Uncertainty: EXTREME)
    – As OLDTOWN aggresively expending its business, I think its FCF growth will be moderate.
    – This shows that OLDTOWN is overvalued or fully valued.
  – Absolute EY%
    – Trailing:   
      – FY14 (EPS: 0.108) – Fair value 1.92 (Fair Value Uncertainty: HIGH)
      – R4Q (EPS: 0.107) – Fair value 1.91 (Fair Value Uncertainty: HIGH)
    – Forward:   
      – FY15 (EPS: 0.118) – Fair value 2.1 (Fair Value Uncertainty: MEDIUM)
      – FY16 (EPS: 0.135) – Fair value 2.41 (Fair Value Uncertainty: LOW)
    – EPS applied to reach the current stock price (1.85): 0.104   
    – This model shows that OLDTOWN is currently undervalued.
– In my opinion, downside of OLDTOWN is protected by its FCF, while its growth drivers secure its future earnings.
– Nevertheless, I personally dislike OLDTOWN because of its poor service and food quality.

Latest Financial – Q1 2015 Financial Report (27 Aug 2014) http://www.bursamalaysia.com/market/listed-companies/company-announcements/1722993

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

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5 thoughts on “OLDTOWN – Fundamental Analysis (30 Sept 2014)

  1. Shivpriye,
    “I feel its another “PADINI” facing disinterested traders.”
    Very well described!! I too own shares of both mentioned companies. Fundamentally intact, increased revenue, just that reduced profit margin. If the management can execute better cost control measures, I’m sure it will further boost investors confidence. Better try next quarter report. Cheers!

    P/S: i too have a negative personal preference towards OT. Hehe…

    Liked by 1 person

  2. Sir, As long as it is having healthy earning and loyal customer base – is the recent downside something to bother or its just a temporary fluctuations ?

    In my opinion, though the product offering is stable (without much changes year-on-year) there is a stable customer base who stick to these products. Earnings are pretty stable (with steady growth rate). Also, OldTown has some locational advantage like the outlet inside the boarding area in KLIA – where a lot of customers are converging.

    Though valuations are getting down and cause of worry, i feel its another “PADINI” facing disinterested traders.

    Liked by 1 person

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