QL – Fundamental Analysis (28 Aug 2015)

QL Analysis:-

Excel – http://1drv.ms/1Lzueky

Notes – http://tinyurl.com/nzskxef

My View:-

  • Valuation:
    • Absolute EY%:
      • Trailing:
        • FY15 (EPS: 0.147) – 3.234 (Uncertainty Risk: VERY HIGH)
        • R4Q (EPS: 0.147) – 3.234 (Uncertainty Risk: VERY HIGH)
      • Forward:
        • FY16 (EPS: 0.177 ± 5%) – From 3.712 to 4.103 (Uncertainty Risk: HIGH)
        • FY17 (EPS: 0.191 ± 5%) – From 4.004 to 4.425 (Uncertainty Risk: MEDIUM to HIGH)
      • EPS applied to reach the current stock price (3.9): 0.177
  • QL’s 1QFY16 revenue was flat YoY at RM655.3m (+0.3% YoY, -1.0% QoQ) with earnings in a similar trend at RM40.9m (+1.4% YoY, -12.4% QOQ). The flattish performance was largely dragged by palm oil activities (POA) and integrated livestock farming (ILF) divisions.
  • 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 – Q1 2016 Financial Report (26 Aug 2015) http://www.bursamalaysia.com/market/listed-companies/company-announcements/4845457

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


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