QL – Fundamental Analysis (27 May 2015)

QL Analysis:-

Excel – http://1drv.ms/1eunTLH

Notes – http://tinyurl.com/nzskxef

My View:-

  • Valuation:
    • Absolute EY%:
      • Trailing:
        • FY15 (EPS: 0.146) – Fair value 3.06 (Fair Value Uncertainty: VERY HIGH)
        • R4Q (EPS: 0.153) – Fair value 3.21 (Fair Value Uncertainty: VERY HIGH)
      • Forward:
        • FY16 (EPS: 0.177) – Fair value 3.72 (Fair Value Uncertainty: HIGH)
        • FY17 (EPS: 0.199) – Fair value 4.18 (Fair Value Uncertainty: HIGH)
      • EPS applied to reach the current stock price (4.05): 0.193
  • 4QFY15 core net profit of MYR38m (flat YoY, -31% QoQ) lifted FYE3/15 core net profit to MYR182m (+14% YoY). All three divisions posted double digit pretax profit growth in FY15.
  • QL establishing its marine segment with new capacities and diversification into new aqua business such as prawn farming, in view of better surimi prices.
  • The MPM division to continue to support the earnings growth, supported by the robust demand on the surimi-based products while the MPM is also poised to benefit from the low feedstock prices on the back of easing commodities prices, namely maize and soybean, as well as the favourable egg prices.
  • On the downside, risk relating to CPO price remains a threat and growing palm oil acreage in Indonesia could help lessen this, going forward.
  • Outlook on ILF segment may not positive due to the high raw material feed cost.
  • Valuation of QL is not attractive.

Latest Financial – Q4 2015 Financial Report (26 May 2015) http://www.bursamalaysia.com/market/listed-companies/company-announcements/4750577

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


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