EIG – Fundamental Analysis (3 Feb 2015)

EIG Analysis:-

Excel – http://1drv.ms/1uSXgS8

Notes – http://tinyurl.com/qf5t59t

My View:-

  • Valuation
    • 3Y-DCF
      • Good Scenario: 1.21 (Fair value uncertainty: MEDIUM)
      • Base Scenario: 1.13 (Fair value uncertainty: HIGH)
      • Bad Scenario: 1.04 (Fair value uncertainty: HIGH)
      • Ugly Scenario: 0.97 (Fair value uncertainty: HIGH)
      • If growth of FCFF in the next 3 years is 9%, EIG still worth 1.05.
    • Absolute EY%
      • Trailing:
        • FY14 (EPS: 0.084) – Fair value 1.11 (Fair Value Uncertainty: HIGH)
        • R4Q (EPS: 0.087) – Fair value 1.16 (Fair Value Uncertainty: HIGH)
      • Forward:
        • FY15 (EPS: 0.09) – Fair value 1.19 (Fair Value Uncertainty: MEDIUM)
        • FY16 (EPS: 0.1) – Fair value 1.33 (Fair Value Uncertainty: MEDIUM)
      • EPS applied to reach the current stock price (1.05): 0.079
  • 20 Nov 2014 – The stock could potentially make its return to the Shariah list in the upcoming November review (last inclusion in May 2013), as we gather that the group has now conformed to Shariah requirements by redeploying its cash into Islamic accounts.
  • Liquidity of this stock is very low, and dividend yield is not so attractive.
  • I am new to this stock, but looks like EIG is a turn-around and growing stock.
  • Even if economy in Malaysia is expected to slow down and consumer spending is weaker now, I believe that ladies will continue to spend money on these products (but just lesser than what they spent during good times)
  • I will place this stock in Research List for the time being, and will revisit EIG in the future.

Latest Financial – Q2 2015 Financial Report (19 Nov 2014) http://www.bursamalaysia.com/market/listed-companies/company-announcements/1798373

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

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