FLCH Valuation

FLCH Financial statement has been uploaded - 31/03/2011.

http://www.cse.lk/cmt/upload_report_file/1048_1303275238747.pdf

According to that,
Anuual EPS (2010-2011 Financial Year) - 0.46
Current FLCH trading price - 5.60
Therefore PE = 5.60/0.46 = 12.17

According to these data this share is currently under valued.
Assuming PE of 15 -> 0.46 * 15 = 6.90

As I feel this should be traded Rs.6.00 - 6.50 range. What do U think ?

keep on consolidating you position till the share to begin the momentum.big guys are collecting at cheap now.

Net profit= 102,768,000 Rs for Q4.
Issued share= 1.368 Bn

Basic EPS for Year ended March 2011= 0.36
According to 15 PER, share price= 5.4
to PER 20, share price= 7.2

they have done exceptionally well with rubber, timber and most importantly tea while others making losses from tea. best way to invest in plantation is investing in holding companies such as RICH, FLCH. with planned office complex, hotel projects and hydro power expansion this is good stock to look in 1~5 year period.

if people can buy SIRA, LGL, PCH with future valuations and expectations, FLCH is fairly good stock which was not manipulated yet, for sure.

nkuda wrote:FLCH Financial statement has been uploaded - 31/03/2011.

http://www.cse.lk/cmt/upload_report_file/1048_1303275238747.pdf

According to that,
Anuual EPS (2010-2011 Financial Year) - 0.46
Current FLCH trading price - 5.60
Therefore PE = 5.60/0.46 = 12.17

According to these data this share is currently under valued.
Assuming PE of 15 -> 0.46 * 15 = 6.90

As I feel this should be traded Rs.6.00 - 6.50 range. What do U think ?

i am strongly on to this

Annual EPS for year ending march 31st 2011 is 0.46
so if we take sector per as a 15 , it has a value of - 0.46"15 = 6.9 Rs
Currently trading at 5.70 so it is undervalued. that's why we could see large crossing at 7Rs.

xmart wrote:Net profit= 102,768,000 Rs
Issued share= 300,000,000

Basic EPS for Year ended March 2011= 0.34
According to 15 PER, share price= 5.10
to PER 20, share price= 6.80

number of issued shares are not 300million. they have around 1.37 Billion total issued shares.
300million shares are number that issued in the IPO.

according to their report EPS for year ending march 2011 is 0.46
so if we take sector PER as 15, valuation is around 6.9Rs.

I also feel that this should be a counter, positive and increasing operating cashflows corresponding to operating profits, low level of debt, strong cash position.

I have the doubt of timber stock, is this similar to touchwood's accounting of timber? any clue?

Also they have made huge gratuity provisions during the period, which may indicate that, there can be impact from the possible wage hike in plantations

Regards

which sector they are in,Plantation or Diversify holding.

econ wrote:

xmart wrote:Net profit= 102,768,000 Rs
Issued share= 300,000,000

Basic EPS for Year ended March 2011= 0.34
According to 15 PER, share price= 5.10
to PER 20, share price= 6.80

number of issued shares are not 300million. they have around 1.37 Billion total issued shares.
300million shares are number that issued in the IPO.

according to their report EPS for year ending march 2011 is 0.46
so if we take sector PER as 15, valuation is around 6.9Rs.

yes, i'm wrong with number of shares. but,

well, you should exclude minority interest out of net profit. then equity holders do get net profit of 102,768,000 Rs per last quarter and 493,289,000 Rs for year ended march 2011. then if we go with 1.368 Bn shares annualized EPS will be 0.36 per share.

then,

with PER of 15, share price= 5.4
with PER of 20, share price= 7.2

decide what would be the PER for newly listed diversified holding company and take your position. for some people, since FLCH is heavily based on plantations, PER should be less than 10, while they are paying 14 Rs for RICH.

Earnings per share: Profit for the period, attributable to equity holders of the parent divided by the average number of shares outstanding.

Earnings per share after dilution: Profit for the period, attributable to equity holders of the parent divided by the average number of shares outstanding plus the average number of shares added through the conversion of outstanding debentures and warrants.

@ Darshana1983

Though many analyse FLCH as a "diversified" sector , IMHO , its more closer to a "Plantation" due its revenue exposure. Comparing with current Plantation company valuations , FLCH seems fairly valued @ current prices.

xmart wrote:

econ wrote:

xmart wrote:Net profit= 102,768,000 Rs
Issued share= 300,000,000

Basic EPS for Year ended March 2011= 0.34
According to 15 PER, share price= 5.10
to PER 20, share price= 6.80

number of issued shares are not 300million. they have around 1.37 Billion total issued shares.
300million shares are number that issued in the IPO.

according to their report EPS for year ending march 2011 is 0.46
so if we take sector PER as 15, valuation is around 6.9Rs.

yes, i'm wrong with number of shares. but,

well, you should exclude minority interest out of net profit. then equity holders do get net profit of 102,768,000 Rs per last quarter and 493,289,000 Rs for year ended march 2011. then if we go with 1.368 Bn shares annualized EPS will be 0.36 per share.

then,

with PER of 15, share price= 5.4
with PER of 20, share price= 7.2

decide what would be the PER for newly listed diversified holding company and take your position. for some people, since FLCH is heavily based on plantations, PER should be less than 10, while they are paying 14 Rs for RICH.

Earnings per share: Profit for the period, attributable to equity holders of the parent divided by the average number of shares outstanding.

Earnings per share after dilution: Profit for the period, attributable to equity holders of the parent divided by the average number of shares outstanding plus the average number of shares added through the conversion of outstanding debentures and warrants.

Thanks . Actually I havent checked their interim results report because there was an error downloading from cse site. I just look at http://www.lbo.lk/fullstory.php?nid=1386277978
(In the financial year ending March 31, 2011, the company's net profit rose 515 percent to 493 million rupees with sales up 33 percent to 6.5 billion rupees. Earnings per shares rose to 46 cents in the year from 09 cents the year before. )
report and according to that,EPS is 0.46. so Thats why I value it 15*0.46 = 6.9Rs.

econ wrote:

xmart wrote:

econ wrote:

xmart wrote:Net profit= 102,768,000 Rs
Issued share= 300,000,000

Basic EPS for Year ended March 2011= 0.34
According to 15 PER, share price= 5.10
to PER 20, share price= 6.80

number of issued shares are not 300million. they have around 1.37 Billion total issued shares.
300million shares are number that issued in the IPO.

according to their report EPS for year ending march 2011 is 0.46
so if we take sector PER as 15, valuation is around 6.9Rs.

yes, i'm wrong with number of shares. but,

well, you should exclude minority interest out of net profit. then equity holders do get net profit of 102,768,000 Rs per last quarter and 493,289,000 Rs for year ended march 2011. then if we go with 1.368 Bn shares annualized EPS will be 0.36 per share.

then,

with PER of 15, share price= 5.4
with PER of 20, share price= 7.2

decide what would be the PER for newly listed diversified holding company and take your position. for some people, since FLCH is heavily based on plantations, PER should be less than 10, while they are paying 14 Rs for RICH.

Earnings per share: Profit for the period, attributable to equity holders of the parent divided by the average number of shares outstanding.

Earnings per share after dilution: Profit for the period, attributable to equity holders of the parent divided by the average number of shares outstanding plus the average number of shares added through the conversion of outstanding debentures and warrants.

Thanks . Actually I havent checked their interim results report because there was an error downloading from cse site. I just look at http://www.lbo.lk/fullstory.php?nid=1386277978
(In the financial year ending March 31, 2011, the company's net profit rose 515 percent to 493 million rupees with sales up 33 percent to 6.5 billion rupees. Earnings per shares rose to 46 cents in the year from 09 cents the year before. )
report and according to that,EPS is 0.46. so Thats why I value it 15*0.46 = 6.9Rs.

but my only concern is, can they maintain this earning pattern???
this is an earning surge, good time to go to public..
but can they maintain its earning pattern..

The FLCH interim report's EPS numbers are based on the 1,068 mn shares that were in issue just prior to IPO. 4Q net profit was Rs103 mn - giving EPS of Rs0.10 based on old number of shares.

New IPO shares were alloted in late March 2011, and current number of shares is 1,368 mn - based on new number of shares, 4Q EPS would be Rs0.07.

But then you should also factor in returns from Rs1.5 bn cash raised in IPO, mainly for tourism and real estate investments though, so returns will be longer term.

This is a company where profits are at present heavily dependent on plantation sector.

1) Can we annualise EPS?
- Commodity prices are volatile and unpredictable, wage hike is also coming

2) What is a fair earnings multiple?
- Given commodity dependence in short term, even 15x PER may be too expensive
- Investments of IPO funds in tourism and real estate will take some time to deliver
- Applying conglomerate valuations for FLCH may not be correct

cse.alpha wrote:The FLCH interim report's EPS numbers are based on the 1,068 mn shares that were in issue just prior to IPO. 4Q net profit was Rs103 mn - giving EPS of Rs0.10 based on old number of shares.

New IPO shares were alloted in late March 2011, and current number of shares is 1,368 mn - based on new number of shares, 4Q EPS would be Rs0.07.

But then you should also factor in returns from Rs1.5 bn cash raised in IPO, mainly for tourism and real estate investments though, so returns will be longer term.

This is a company where profits are at present heavily dependent on plantation sector.

1) Can we annualise EPS?
- Commodity prices are volatile and unpredictable, wage hike is also coming

2) What is a fair earnings multiple?
- Given commodity dependence in short term, even 15x PER may be too expensive
- Investments of IPO funds in tourism and real estate will take some time to deliver
- Applying conglomerate valuations for FLCH may not be correct

Spot on cse.alpha as usual

This is fairly value under the current market conditions and also a highly liquid counter.

According to these valuations, someone who invests in FLCH at 3.70 should be able to double the investment.. ... I personally think that FLCH is the best investment considering the price it is trading at right now and their future potential..