DLADY – Fundamental Analysis (25 Feb 2015)

DLADY Analysis:-

Excel – http://1drv.ms/1DnZAX9

Notes – http://tinyurl.com/lby6myo

My View:-

  • Valuation:
    • 10-Y DCF:
      • Good Scenario: 48.64 (Fair value uncertainty: HIGH)
      • Base Scenario: 39.95 (Fair value uncertainty: VERY HIGH)
      • Bad Scenario: 32.8 (Fair value uncertainty: EXTREME)
      • Ugly Scenario: 26.93 (Fair value uncertainty: EXTREME)
      • At current price (46.06), based on RDCF, assumption of FCFF growth rate in the next 10 years is 22.9%.
    • Absolute EY%:
      • Trailing:
        • FY14 (EPS: 1.716) – Fair value 37.77 (Fair Value Uncertainty: VERY HIGH)
        • R4Q (EPS: 1.716) – Fair value 37.77 (Fair Value Uncertainty: VERY HIGH)
      • Forward:
        • FY15 (EPS: 2.002) – Fair value 44.07 (Fair Value Uncertainty: VERY HIGH)
        • FY16 (EPS: 2.161) – Fair value 47.56 (Fair Value Uncertainty: HIGH)
      • EPS applied to reach the current stock price (46.06): 2.093
  • I am positive with DLADY’s future:
    • Its solid fundamentals and strong branding position
    • Aggressive marketing and promotional activities
    • Robust demand of diary product in the long-term as Malaysia’s population is projected to reach 38 million people by 2040 from 30 million currently.
  • Short term concerns:
    • The sales volume to continue the downtrend in view of the tough and challenging operating environment with consumer spending being undermined by the high costs of living
    • Strong USD/MYR will reduce profit margin of DLADY because of import of raw materials from other countries.
      • PAT of RM34 million in 4Q14 grew by 17% q-o-q and 5% y-o-y, bringing 12M14’s PAT to RM110 million compared to RM138 million in 12M13 (-21% y-oy). The lower PAT was tempered by higher dairy based commodity prices and weakening of the Malaysian Ringgit.

Latest Financial – Q4 2014 Financial Report (24 Feb 2015) http://www.bursamalaysia.com/market/listed-companies/company-announcements/1883289

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


2 thoughts on “DLADY – Fundamental Analysis (25 Feb 2015)

    • Can, but just bear in mind that their products are different. The comparison is not 100% apple to apple, but they are in the same sector.


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