CDB share to keep an eye on

This is not a buy/sell recommendation. Just a small analysis. I hold presently.


1)There was a right issue at Rs 70 per share. This is trading around Rs 40 still. Rs 30 less than the right issues itself.
2) Top 10 share holders have about 80% .20% with others only 9.5 million . So in a run it can be rather illiquid.



3) Earnings :

Last year EPS = 13.1 ( YoY growth also even with
Last quarter EPS = 1.87
( note though it appears there is a drop on YoY EPS actually there is a profit growth of 21% this quarter as number of shares increased over a right issue)

4) NAV around 45


5) CDB has produced decent results in diffficult times.
6) Also CDB is into Micro finance which will have tax benefits if I recall right



Valuation :

Based on past 2 year performance we can estimate eps of 13 again . But for argument sake lets say 10.

So even if we consider 1.9 Book value as per market = value if around Rs 90
On PE of 10 vlaue is = about Rs 100

So in a true bull run it can easily gain over 100% at Rs 80.


One of the more attractive banking/fin shares in the market.

Jeferjees and JB cocoshell collected CDB X at 56 levels. They are known to be one of the best in value investing. Also X share can be quite illiquid comparatively.

CDB.X shares was issued as a script dividend . So there was selling pressure recently. There was lof of selling at rs 27-28. Now just starting to raise it head.

See the CDB balance sheet. They having massive Cash / deposits. Trading below of NAV. On each quarter their turnover is increasing & increasing. CDB is really undervalued share in CSE. I think Rs.60/- plus possible with in next bull run. CDB.X will follow this. Keep your eye with CDB.

Thanks Slstock, I was watching this for sometime but never got into it. Thanks for all the details given.

One time the X was trading at a higer price than the N

slstock wrote:This is not a buy/sell recommendation. Just a small analysis. I hold presently.


1)There was a right issue at Rs 70 per share. This is trading around Rs 40 still. Rs 30 less than the right issues itself.
2) Top 10 share holders have about 80% .20% with others only 9.5 million . So in a run it can be rather illiquid.



3) Earnings :

Last year EPS = 13.1 ( YoY growth also even with
Last quarter EPS = 1.87
( note though it appears there is a drop on YoY EPS actually there is a profit growth of 21% this quarter as number of shares increased over a right issue)

4) NAV around 45


5) CDB has produced decent results in diffficult times.
6) Also CDB is into Micro finance which will have tax benefits if I recall right



Valuation :

Based on past 2 year performance we can estimate eps of 13 again . But for argument sake lets say 10.

So even if we consider 1.9 Book value as per market = value if around Rs 90
On PE of 10 vlaue is = about Rs 100

So in a true bull run it can easily gain over 100% at Rs 80.


One of the more attractive banking/fin shares in the market.

I bought this and earned quite a lot when this was in 40s range about year and half back! But there are MANY WRONG predictions and analysis here!

First off their EPS has shown huge values in last year as they have all of a sudden started to revalue include investments! So when investments go down you will have lower EPS according to them! But as they are not selling those investments these are really stupid way to get EPS! Its like Namal unit fund saying about their EPS!! IF anything the real EPS for this share can't exceed Rs 7 even fro the year!

Also how did you get the value of 1.9x book value to calculate expected share value? That's dam wrong man! by that logic share like ALLI in same sector should be = Rs 593*1.9= Rs 1126! Also about 100% gain! anyway its a stupid way to calculate a shares fair value by taking its book value for a finance sector share! Also you forgot to mention that one reason its trading to a discount is that the company was a part of the CEYLINCO group! So peoples trust is still not with these companies!

I'm not saying its a crap share by any means but you are just painting just one side of the picture with wrong data!

As usual hasty unruly comments to attack people after returning to forum after a long time.


Firstly explain to me why you are contradicting your own post last year .

1)

http://forum.srilankaequity.com/t4495-cdb-research#30256


"I did a analysis way back like 4 montha ago and had like 2 page discussion ( mostly people saying why it should not go up )! Try to find it if can! Back then it was at Rs 70! Anyway it way undervalued but most big guns been dumping shares to market past few months in big amounts! Unless this would be way higher! I also quite the share around 103 this time around and might enter later!"

2) What about this comment you made

Rajitha wrote:
Company has declared EPS for quarter of Rs. 5.31 (Annualized EPS 21.24). Although this includes some mark to mark evaluations and if you even completely remove these investments it’s EPS for quarter of Rs. 2.4 is 45.45% increase to its last quarter EPS of Rs.1.64.
I could only see up to three quarterly earnings as only two financial statements out and the EPS for the 3 stands as Rs. 0.87, 1.65, 2.4 over 50% growth quarterly to quarterly with the least EPS accounted. The company has a Forward PE of 80/9.6= 7.5. This means the PEG Ratio for company stands at a mere 0.15 where 1 is the in line with market. So a HUGE undervalued share.
The sector PE ratio is also around over 20. This means even if you forget the huge growth the company is having you can see its trading at below half of its potential value with a mere 7.5 PE at worst case. OFC the value of this share goes up exponentially when you add in Mark to mark valued EPS of Rs. 5.31 per quarter. Also if I can remember right the singer finance that just enter the market in same sector have only Rs. 1.2 EPS annually while the share is trading at Rs50 now !!
Another thing to consider is that on the starting day of the share it went up to Rs.160 and settled down around Rs. 90 as I can see. (I was not in the market then). This means there are a huge number of people that bought this share really high.
Cheers.

http://forum.srilankaequity.com/t4065-cdb-results-out#27501


3) how about this

Rajitha wrote:
I made a small analysis about the share and told its great in medium term when it hit Rs. 70. Still its a really good share if you look at there earnings and compare with the rest of the firms in CSE.

http://forum.srilankaequity.com/t529-cdb-is-a-good-bet


4) Need more ? How about this ?

Rajitha wrote: Hi can anyone say whats up with CDB? It was trading at even Rs 89 after the quarterly and it suddenly dipped as low as 70s next day. Not to mention main reason was a 300k sell order put out at 70 when the CDS amount of CSE amount floating around is like 6.4million shares. Also Dr. Senthivail has like 1 million shares and he sold 500 yesterday. YES thats right 500 from his 1million!
CDB is a gr8 company and from the reaserch I have done,

Company has declared EPS for quarter of Rs. 5.31 (Annualized EPS 21.24). Although this includes some mark to mark evaluations and if you even completely remove these investments it’s EPS for quarter of Rs. 2.4 is 45.45% increase to its last quarter EPS of Rs.1.64.
I could only see up to three quarterly earnings as only two financial statements out and the EPS for the 3 stands as Rs. 0.87, 1.65, 2.4 over 50% growth quarterly to quarterly with the least EPS accounted. The company has a Forward PE of 80/9.6= 7.5. This means the PEG Ratio for company stands at a mere 0.15 where 1 is the in line with market. So a HUGE undervalued share.
The sector PE ratio is also around over 20. This means even if you forget the huge growth the company is having you can see its trading at below half of its potential value with a mere 7.5 PE at worst case. OFC the value of this share goes up exponentially when you add in Mark to mark valued EPS of Rs. 5.31 per quarter. Also if I can remember right the singer finance that just enter the market in same sector have only Rs. 1.2 EPS annually while the share is trading at Rs50 now !!
Another thing to consider is that on the starting day of the share it went up to Rs.160 and settled down around Rs. 90 as I can see. (I was not in the market then). This means there are a huge number of people that bought this share really high.
Cheers.

http://forum.srilankaequity.com/t82-why-is-cdb-going-down



So when you yourself glorified this so much , after 1 year with NAV improvement and profit growth you say this is not worth 'Rs 80. Fantastic arguments.




Okay if you are contradicting to show superiority, show me your valuation and tell me how much CDB is worth now? It is easy to put down anyone and argue. But show facts. Explain to me why is it not worth at this price.



1) If you say book value is also not used go read how financial sector shares are valued.
2) Yes ALLI is worth more than 1200 to me also on NAV and PE. So what is the issue? CDB is another Share.
3) Did you see I discounted PE to around 10 though they showed 2 consecutives years of eps around 13.
4) Are you saying this share will never run more than the right issue price of Rs 70 again?
5) What is the issue of being a Ceylinco Company if it is managed okay. Presume Dr Senthilverl and Perpetual is stupid to hold CDB in the top 20?


Here is this quarterly report

http://www.cse.lk/cmt/upload_report_file/981_1344597349.pdf


Show me if
a) interest income has not grown.
b) Did you see the other income amounts?
c) There is even a 32 million allocated for loan loss this quarter to give 1.87 eps.
d) Hasn't their deposits grown

Even if eps is 8 , why is this share not worth Rs 80.


Here is the annual report ,

http://forum.srilankaequity.com/t82-why-is-cdb-going-down

Show me all the bad you mentioned?

Rajitha wrote:

slstock wrote:This is not a buy/sell recommendation. Just a small analysis. I hold presently.


1)There was a right issue at Rs 70 per share. This is trading around Rs 40 still. Rs 30 less than the right issues itself.
2) Top 10 share holders have about 80% .20% with others only 9.5 million . So in a run it can be rather illiquid.



3) Earnings :

Last year EPS = 13.1 ( YoY growth also even with
Last quarter EPS = 1.87
( note though it appears there is a drop on YoY EPS actually there is a profit growth of 21% this quarter as number of shares increased over a right issue)

4) NAV around 45


5) CDB has produced decent results in diffficult times.
6) Also CDB is into Micro finance which will have tax benefits if I recall right



Valuation :

Based on past 2 year performance we can estimate eps of 13 again . But for argument sake lets say 10.

So even if we consider 1.9 Book value as per market = value if around Rs 90
On PE of 10 vlaue is = about Rs 100

So in a true bull run it can easily gain over 100% at Rs 80.


One of the more attractive banking/fin shares in the market.

I bought this and earned quite a lot when this was in 40s range about year and half back! But there are MANY WRONG predictions and analysis here!

First off their EPS has shown huge values in last year as they have all of a sudden started to revalue include investments! So when investments go down you will have lower EPS according to them! But as they are not selling those investments these are really stupid way to get EPS! Its like Namal unit fund saying about their EPS!! IF anything the real EPS for this share can't exceed Rs 7 even fro the year!

Also how did you get the value of 1.9x book value to calculate expected share value? That's dam wrong man! by that logic share like ALLI in same sector should be = Rs 593*1.9= Rs 1126! Also about 100% gain! anyway its a stupid way to calculate a shares fair value by taking its book value for a finance sector share! Also you forgot to mention that one reason its trading to a discount is that the company was a part of the CEYLINCO group! So peoples trust is still not with these companies!

I'm not saying its a crap share by any means but you are just painting just one side of the picture with wrong data!

I never said This is a crap share! I already said in my post I had this share and I even have a small amount still left with me! Please read what I posted again! But its not fair to tell ppl just one side of the story and make valuations on unimaginable EPS! Just because DIMO made rs 300+ EPS do you think I can post saying they will make Rs 300 + RPS this year and make valuations saying it will reach over Rs 3000 so people can earn 500% profits?

How do you justify them having over Rs 10 EPS easily as you said this year?
Also when I did the analysis that was when market was shooting and PE of the sector was much higher! Do you think you can use same PE valuations now ? The way you calculate it seems you expecting 'IN TRUE BULL RUN' (using your own words) current market will pass ASI 7500 easily! (When you value the sahres same way you doing for all shares!)

The kind of posts you made at start is the types I have seen soo much about 1.5- 2 years back with just the one side of the story! I'm not against you personally, but I think some one has to educate the readers about the other side to the story as well !

PS:- Valuation I made was for a Time when its on peak of a bull run without huge amount of quartlies to work with and mainly BEFORE THE RIGHT ISSUE! The share has diluted down after that and so have their EPS!

I have invested in thier fixed deposit but not with stock..

Regret why i didnt relaod cople of hundred to the exsisting balance i am holding....

Rajitha,

I really do not want to talk nonsense with you and waste my time, but for the benefit of others let me answer and clarify certain things. If you want to talk further to prove me wrong. show us your calcualtions and estimation for benefit of others without finding fault because you opinion now suddenly differs own your own last year.


1) If this share was good for you at Rs 90, why is it not good at Rs 40? So should we wait for later to buy?
( I am not asking anyone to buy)
2) Since you cannot understand the meaning of "in a true bull run" it means that "when a true bull run happens" Who said this can reach Rs 80 in short term . Have I talked about short term targets?
3) No body has crystals in their hand. We make educated guesses only.
So when a company reports around Rs 13 eps for 2 years consecutively, is it wrong to estimate around
Eps 10? What is wrong in taking Market BV ( 1.9) now and lesser than market PE ( 10) to calculate a
rough estimate. These BV and PE will go up if there is a run in the future.

If my estimate if not good, take the challenge and show your calculation and estimates, and
valuations so other can benefit the "Other side" you mention.

4) Who talked about ASI 7500 and why should market need to go up to that level for shares to run . Have you not seen that some shares gained 100% from June crash. CDB was once it was at Rs 90 and even 105. ( look at your own post)


5) Every share has a time. Shares like DIMO can lie dormant due to sentiments and due to news issues.
Infact DIMO has increased from low of Rs 550 to 670 today. It may go up further.

During difficult periods,true fundamental value will not be shown for certain shares.
UML moved and DIMO did not yet.



The issue I have with people like you is that you stay away for months when the market is bad, and then suddenly come to the forum to attack other peoples post. Where were you when we stuck with CSE and forum during when ASI hit 4720s and ASI 4800 and people were depressed.


If you have something to contribute, please do your own analysis and go to the below post and report your findings without contradicting your own posts on CDB.


http://forum.srilankaequity.com/t19939-good-shares-time-to-analyze-and-post-findings-open-invitation-to-all


Show me your estimated EPS and prove me why this share can not be valued at around Rs 80. I gave you the links to the reports

Nobody does analysis, forum is full of posts about gossips and when one does one peple like you just come and thread crap.

Rajitha wrote:

I bought this and earned quite a lot when this was in 40s range about year and half back! But there are MANY WRONG predictions and analysis here!

Also how did you get the value of 1.9x book value to calculate expected share value? That's dam wrong man! by that logic share like ALLI in same sector should be = Rs 593*1.9= Rs 1126! Also about 100% gain! anyway its a stupid way to calculate a shares fair value by taking its book value for a finance sector share! Also you forgot to mention that one reason its trading to a discount is that the company was a part of the CEYLINCO group! So peoples trust is still not with these companies!

I'm not saying its a crap share by any means but you are just painting just one side of the picture with wrong data!

Members in this forum are mostly not professional analysts or researchers. Anyone has the liberty to air his honest opinion.

If another member likes to contradict, there is always honourable ways of doing it without offending or harming ones ego or humiliating.

Class room bully or University senior type of writing with the air of "I know it all you all are stupids" will only create angst in the minds of members and create a toxic environment.

I for one do not doubt the skills and ability of Rajitha. You are fantastic man. But the problem is how you get about your co-habitation in a forum. I request you to create a space for others to air opinions in honourable ways than giving rude, authoritative writing with full of attacks....

I know the real value CDB and my fav ALLI..
I was collect at 70 level then 40 level...
CDB growth is good..

I don't know whether this will run immediately. Since this post The share went from Rs 40 to 48 and came back to Rs 44. Not great interest was seen yet.

If by chance the market moves ( probable but sure ) and if CDB get big player interest then around RS 60 can be achieved. NOte that CDB was running ahead of NTB in bull markets. But bear killed this share a lot and the script dividend in CDB.X format induced selling pressure further.

This is only to study facts I mentioned. No buy sell.

AS per my knowledge and experience CDB is one of the best and one of the most undervalue share.

@ Rajitha ,
Please give your valuation based on all above factors for CDB.

I feel there are lot of unwanted arguments are going on and those disturb all valuable discussions.........Please come up with ur valuation for CDB and then Discuss,....

I feel this fellow talking nonsense here. Others need to wast their time to prove the mistake by digging to old posts. This is totally utter madness......

Amal Mudunkotuwa wrote:AS per my knowledge and experience CDB is one of the best and one of the most undervalue share.

@ Rajitha ,
Please give your valuation based on all above factors for CDB.

I feel there are lot of unwanted arguments are going on and those disturb all valuable discussions.........Please come up with ur valuation for CDB and then Discuss,....

I feel this fellow talking nonsense here. Others need to wast their time to prove the mistake by digging to old posts. This is totally utter madness......

The arguments here are not constructive....if for sake some1 disagrees with another s opinion, reason it as to why it cant be like this or that....


@Rajitha....
we would be grateful if you can tell the members whats your view on CDB...now that slstock has put his view in N of years.....tell us how would you value the share....with margin of safety for people to BUY and dispose...........

This is of course if you are willing to shed some light for the benefit of all and mostly to the newbies.

Now dont tell me "Its for me to know and for you to find out"

Peace Bro......

After all, The forum members need not copy similar sentiments like our politicians Mr. Berty & Mr. Ranjith..........in NC after the last elction....

Was silent for a long time . Stated getting interest.

May be a dividend announcement to be made.

Yes not so far. Either in May or june hopefully.

Last year cash + script was rs 2.5

Chris Gardner wrote:May be a dividend announcement to be made.

it is ready to run from today.
i catch this bus today

Without revaluations CDB earning was Rs 9.98 for the year.
If revaluation are added another Rs 4 per share.
NAV is Rs 55.

Rs 2.75 dividend

There seems to be price mismatch between X and N right now.


CDB.X was Rs 30+ when CDB.N was Rs 42-43

Now CDB.X Rs 39-40 but CDB.N is Rs 48-50.

Also note according to CDB internal valuations

CDB.N was price at Rs 70
CDB.X at Rs 45

Due to liquidity and better dividend yield compared to N , CDB.X has run ahead.

If you go by Right issue valuations CDB.N should be atleast Rs 60 now .

Their might be an opportunity due to the mismatch here when market corrects itself.

Mr Bond,
What can you say about this?

My dark horse for 2013...!

Both my eyes are locked on ....no money sana

what do you think about their pawning business and three wheel leasing business,will there be negative affect in the future?