PCHEM – Fundamental Analysis (9 Nov 2014)

PCHEM Analysis:-

Excel – http://1drv.ms/1w3Rflk

My View:-

– Fair values:
  – 5-Y DCF:
    – Good Scenario – 6.89 (Fair Value Uncertainty: MEDIUM)
    – Base Scenario – 6.16 (Fair Value Uncertainty: HIGH)
    – Bad Scenario – 5.51 (Fair Value Uncertainty: HIGH)
    – Ugly Scenario – 4.93 (Fair Value Uncertainty: VERY HIGH)
  – Absolute EY%:
    – Trailing:
      – FY13 (EPS: 0.393) – Fair value 7.05 (Fair Value Uncertainty: MEDIUM)
      – R4Q (EPS: 0.302) – Fair value 5.41 (Fair Value Uncertainty: HIGH)
    – Forward:
      – FY14 (EPS: 0.378) – Fair value 6.78 (Fair Value Uncertainty: MEDIUM)
      – FY15 (EPS: 0.42) – Fair value 7.52 (Fair Value Uncertainty: MEDIUM)
    – EPS applied to reach the current stock price (5.89): 0.329
– 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.
– Management guided that 2015 will possibly see even tougher operating environment coupled with challenging product prices. However, management is confident that the production volume could increase in 2015 due to the various proactive measures planned to ensure minimal feedstock interruptions, plant stoppages and to ensure optimum plant reliability.

Latest Financial – Q3 2014 Financial Report (6 Nov 2014) http://www.bursamalaysia.com/market/listed-companies/company-announcements/1786901

At the time of writing, my family member owned shares of PCHEM.


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