PADINI (7052) - PADINI – Fundamental Analysis (17 Feb 2015)
PADINI Analysis:-
Excel – http://1drv.ms/1BibDau
Notes – http://tinyurl.com/lyevtd9
My View:-
Valuation:
Absolute EY%:
Trailing:
FY14 (EPS: 0.138) – Fair value 1.84 (Fair Value Uncertainty: MEDIUM)
R4Q (EPS: 0.107) – Fair value 1.42 (Fair Value Uncertainty: HIGH)
Forward:
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
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.
https://lcchong.wordpress.com
PADINI Analysis:-
Excel – http://1drv.ms/1BibDau
Notes – http://tinyurl.com/lyevtd9
My View:-
Valuation:
Absolute EY%:
Trailing:
FY14 (EPS: 0.138) – Fair value 1.84 (Fair Value Uncertainty: MEDIUM)
R4Q (EPS: 0.107) – Fair value 1.42 (Fair Value Uncertainty: HIGH)
Forward:
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
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.
https://lcchong.wordpress.com
