Excel – http://1drv.ms/1BibDau
Notes – http://tinyurl.com/lyevtd9
- Absolute EY%:
- FY14 (EPS: 0.138) – Fair value 1.84 (Fair Value Uncertainty: MEDIUM)
- R4Q (EPS: 0.107) – Fair value 1.42 (Fair Value Uncertainty: HIGH)
- FY15 (EPS: 0.129) – Fair value 1.72 (Fair Value Uncertainty: MEDIUM)
- FY16 (EPS: 0.151) – Fair value 2.02 (Fair Value Uncertainty: MEDIUM)
- EPS applied to reach the current stock price (1.47): 0.11
- Absolute EY%:
- Assuming PADINI dividend payout is consistent, I think dividend yield is around 9%.
- In overall, PADINI valuation is quite attractive.
- FY15Q2 result is mediocre due to few non-recurring issues/activities. These issues/activities will impact PADINI 2-3 quarters, but for me, these are short term problems. No big deal.
- Revenues from domestic franchisees were substantially reduced following a decision by the Group to replace the franchise arrangements with ‘manage and operate’ agreements.
- Gross margins earned in the quarter reviewed had fallen by about 6% year-on-year, reflecting continued aggressive promotional and discounting activities, and increased clearance of slow-moving stocks. Clearance of slow-moving stocks had taken on an urgent priority as it was almost certain that post-GST, disposal of such stocks would result in an even greater negative impact on margins since the GST on the sale of such stocks would be absorbed by the Group instead of being passed on to the consumers.
- If PADINI didn’t do this, these stocks will end up in "Inventories Written Off" in the future.
- So, in my opinion, I support PADINI actions.
- Besides FCFF in FY15 Q2 increased 165% if compare to the previous corresponding period. (25,580 FY14 Q2 –> 67,556 FY15 Q2). This is the reason why I believe PADINI dividend policy is sustainable
- I will continue to hold, and accumulate PADINI if possible.
Latest Financial – Q2 2015 Financial Report (16 Feb 2015) http://www.bursamalaysia.com/market/listed-companies/company-announcements/1878877
At the time of writing, I owned shares of PADINI.