Excel – http://1drv.ms/1FFoiVM
Notes – http://tinyurl.com/q9865xx
- Absolute EY%:
- FY14 (EPS: 0.211) – Fair value 2.38 (Fair Value Uncertainty: EXTREME)
- R4Q (EPS: 0.233) – Fair value 2.62 (Fair Value Uncertainty: EXTREME)
- FY15 (EPS: 0.238) – Fair value 2.68 (Fair Value Uncertainty: VERY HIGH)
- FY16 (EPS: 0.269) – Fair value 3.02 (Fair Value Uncertainty: VERY HIGH)
- EPS applied to reach the current stock price (3.63): 0.323
- Absolute EY%:
- As guided, 1Q15 top line grew 45.7% yoy to RM33.3m thanks to ABI sales which surged 96% yoy. However, sales contracted sequentially by 21.7% as both MVS and ABI’s contribution fell by 36% qoq and 15% qoq, respectively. This is in tandem with the seasonally weaker semiconductor equipment spending.
- I recognize that my valuation is not as compelling as what suggested by Maybank and Hong Leong analysts. To reach target price suggested by them, they assumed that EY% of VITROX can drop to around 5%. Looking at historical EY% band, the average of low EY% is 8.5%, and in 2011, VITROX’s EY% was at 5% level for few months.
- Of course, we can always argue that "past performance is not an indicator of future results".
- In my opinion, the recent price performance of VITROX already factored in the future potential earnings.
- If VITROX encounters correction in future, I may buy VITROX.
Latest Financial – Q1 2015 Financial Report (23 May 2015) http://www.bursamalaysia.com/market/listed-companies/company-announcements/4745225
At the time of writing, I did not own shares of VITROX.