Excel – http://1drv.ms/1ukfATE
Notes – http://tinyurl.com/mqm26z6
- 3-Y DCF:
- Good Scenario: 4.58 (Fair value uncertainty: LOW)
- Base Scenario: 4.21 (Fair value uncertainty: LOW)
- Bad Scenario: 3.87 (Fair value uncertainty: LOW)
- Ugly Scenario: 3.56 (Fair value uncertainty: LOW)
- If growth of FCFF in the next 3 years is -13%, SKPETRO still worth 2.35.
- Absolute PE:
- FY14 (EPS: 0.189) – Fair value 2.31 (Fair Value Uncertainty: HIGH)
- R4Q (EPS: 0.274) – Fair value 3.34 (Fair Value Uncertainty: MEDIUM)
- Absolute EY%:
- FY14 (EPS: 0.189) Fair value 4.27 (Fair Value Uncertainty: LOW)
- R4Q (EPS: 0.274) Fair value 6.18 (Fair Value Uncertainty: LOW)
- FY15 (EPS: 0.225) Fair value 5.08 (Fair Value Uncertainty: LOW)
- FY16 (EPS: 0.237) Fair value 5.35 (Fair Value Uncertainty: LOW)
- EPS applied to reach the current stock price (2.35): 0.104
- 3-Y DCF:
- Valuation of SKPETRO is veryy attractive.
- The recent sell-off in SKPETRO shares (-43% qoq) looks overdone. While the lower oil price has weakened the global oil & gas capex and hence, its business outlook, SKPETRO has a strong orderbook of RM26.2bn to buffer a medium-term industry slowdown. Also, its good geographical spread provides the flexibility to redeploy its asset should there be a prolonged slowdown in its home market. Key re-rating catalysts are the stabilisation in oil price, improved investor sentiment and possible return onto the Shariah compliant list in May15.
- Remember the Warren Buffett’s most famous investment sayings: "Be fearful when others are greedy. Be greedy when others are fearful."
Latest Financial – Q3 2015 Financial Report (9 Dec 2014) http://www.bursamalaysia.com/market/listed-companies/company-announcements/1820653
At the time of writing, I owned shares of SKPETRO.