FLCH undervalued

EPS for the year ended 31/03/2001 is 0.46.
At a PE of 15, it should be valued at Rs. 7/= ((0.46*15).
Please note that the market PE is 26.
FLCH has been trading heavily for some time and today also it's within the top 5 counters. Huge collection is going on at present.
I hope this will start move in the very near future.
This is my personal opinion.

dineshfernando wrote:EPS for the year ended 31/03/2001 is 0.46.

At a PE of 15, it should be valued at Rs. 7/= ((0.46*15).

Please note that the market PE is 26.

FLCH has been trading heavily for some time and today also it's within the top 5 counters. Huge collection is going on at present.

I hope this will start move in the very near future.

This is my personal opinion.

yep the huge collection u mean is true. there are enough buyers available at 5.00 and 4.90. shares more than 100,000 do even hand in hand

in this like condition we all tend to think that some one is collecting , and when ever a transaction occurs in millions we think that it is a nice trend..

But in the same cant we think that some one or ppl are dumping huge amounts to exit.

if some one bought million shares for a higher price ,rallying or trending seems reasonable, but in FLCH its at the IPO price.
Any way if FLCH goes up I am happy.. just thought like that and hope to have some experts comments .. .

I too have the same feeling. And unlike you dinesh, I'm a technical analyst rather than a fundamental one. I read the charts and charts tell me the same thing. FLCH is readying for something really really big within the coming days. Yesterday it traded heavily around 5.10-5.00 and today around 5.00-4.90. And the turnover was in billions. Whenever a share trades that heavy within such a short range, it only means there will be a huge boom in the near future.

http://www.cse.lk/cmt/upload_report_file/1048_1305185889765.pdf

check their segmental report it's a plantation based company where hydro power sector contribution is less than 10%.

max p/e for plantation sector is 8

value = 0.46*8 = 3.68

note: this is my personal opinion do your homework before making any decision.

yes looking at these mix this is overvalued at rs.5/=

http://sundaytimes.lk/110313/BusinessTimes/bt32.html

Free Lanka Capital Holdings (FLCH) owned by Browns Group and Perpetual Holdings has divested some 23% in the company initially through a successful sell-down/private placement and launched its Initial Public Offering (IPO) on Tuesday to sell some 22% in a bid to expand into the power sector and enter into the leisure sector, officials said.

This has come on the back of the company listing its subsidiary, Hydro Power Free Lanka Ltd. (HPFL) late last year. The Business Times reported last November that FLCH will list early this year.
Kamantha Perera, Director FLCH told the Business Times on the sidelines of the IPO launch that the sell-down early last year by the company was successful. He said FLCH is planning to bring in international chains to manage the hotels they are planning in Giragama and Padukka.

Mr. Perera said that they are eyeing to set up two boutique hotels which will be three to four star. “This star class we feel will bring in revenue for us,” he said. The company through its subsidiaries owns Maturata and Pussellawa Plantations and manages over 23,000 hectares of tea and rubber, comprising of a total of 43 estates, where tea plantation spans across a revenue extent of over 7,500 hectares and rubber plantation over a revenue extent of over 3,200 hectares of land.

The rubber segment of the plantations have successfully generated the highest yield among the rubber plantation companies and due to the immense future potential of this sector, the company intends to expand the group’s rubber production further. The company has also embarked on a comprehensive program of timber planting on its estates for commercial purposes and has already planted more than 1.2 million timber plants.

Mr. Perera said that FLCH which has interests in the plantation sector will enter into value added tea as there’s an urgent need to do so with the rising overhead costs (such as plantation employee wages, etc). Analysts said that hydro power companies have recorded improved earnings in the recent past and with the better tariff rates, increased power generation which has resulted in the increased earnings, their strong balance sheet position is backed by the low gearing levels.

“Relatively stable cash flows and profit margins, relatively high life span of the assets can be identified as few industry specific characteristics among others,” an analyst said, adding that despite the initial investment required, the working capital requirement necessary to operate the power plant remains low. And for hydro power generators, he noted that geographical diversification via acquisitions/constructions of new plants is a must to avoid the risk of insufficient water flow which may reduce the power generation capabilities. “The areas where FLCH wants to set up mini hydro power plants do not face such threats,” he said.

Mr. Perera said that HPFL will set up four more mini hydro plants with a total capacity of 5.37 mega watts and with the IPO funds FLCH will put up some seven more such mini hydro power plants. “This will add another 7.45 mega watts to the national grid.

He said the IPO’s official opening of which is on March 17 will see 22% stake or 300 million ordinary shares at Rs. 5 each being offered to the public.

dineshfernando wrote:

At a PE of 15, it should be valued at Rs. 7/= ((0.46*15).

Please note that the market PE is 26.

Forward market PE is approx 15-17x according to most brokers. 26x is probably using historical earnings.

Nigel is correct. Plantation sector earnings should be valued at less than 10x, given high volatility and uncertainty - higher rubber exposure deserves a premium, tea a discount. Most tea companies will report losses with new wage structure.

With wage hike from 1st April 2011, plantation earnings may even fall in FY12E.

Fundamentals aside, FLCH has some heavyweight promoters, who would like to see the share do well ahead of the IPO of group company Browns Investments soon.

read more at:

http://forum.srilankaequity.com/t2840-flch-march-2011-results-on-cse-website

a sole crossing of 5,319,148 shares was done at 7/= . there navps is 4.6. and u expect flch to trade at 3+?
http://www.cse.lk/cmt/upload_report_file/1048_1305185889765.pdf
http://www.lbo.lk/fullstory.php?nid=1386277978

but few days back directors too sold ??? wts the scene ??? We could believe when a director selling its bit risky ?? but even though he sold below the IPO price ... but abov comments says it's worthy share

Is thr any Pvt Plcment with this ???

for FLCH

increase in wage price will reduce the margin on tea and rubber. This might reduce profits from rubber. Tea segment might even fall in to losses as the margin is very thin. we might possibly see plantation stocks moving down further specially those based on tea.

Today morning i heard on news that plantation sector workers are not yet satisfied. it said that trade unions want basic rs 515 per day. (at present plantation sector workers receive rs 515 only if they work 24 days or something)

But FLCH can make a move on technical grounds or on speculation. But most probably not on fundamentals.

note: this is not buy/sell or hold recommendation do your homework before making any decision.

Chabbi wrote:but few days back directors too sold ??? wts the scene ??? We could believe when a director selling its bit risky ?? but even though he sold below the IPO price ... but abov comments says it's worthy share

Is thr any Pvt Plcment with this ???

a private placement was done at rs 4.70 on 31st dec 2010

note: this is not buy/sell or hold recommendation do your homework before making any decision.

gann wrote:a sole crossing of 5,319,148 shares was done at 7/= . there navps is 4.6. and u expect flch to trade at 3+?
http://www.cse.lk/cmt/upload_report_file/1048_1305185889765.pdf
http://www.lbo.lk/fullstory.php?nid=1386277978

I ve a slight memory of a crossing of PAP at 4.50 when it was trading in 4.00 like that. but can not find the full details weather its right or wrong.. have u any idae ??

Nigel.Machado wrote:

Chabbi wrote:but few days back directors too sold ??? wts the scene ??? We could believe when a director selling its bit risky ?? but even though he sold below the IPO price ... but abov comments says it's worthy share

Is thr any Pvt Plcment with this ???

a private placement was done at rs 4.70 on 31st dec 2010

note: this is not buy/sell or hold recommendation do your homework before making any decision.

Thn we shd get patience to increase the price of this bcz Pvt Plcmnt is may be the issue any idea abt the qty thy issued ?? is it related to Locked IN period ??

i director selling 1mil share at a support level of 4.9 is highly suspicious to me
he had ample time to sell at 5.10+. i exited at 5.30 in the last rally after buying at 4.90. but i feel for the rest for this kind of manipulation.

gann wrote:i director selling 1mil share at a support level of 4.9 is highly suspicious to me
he had ample time to sell at 5.10+. i exited at 5.30 in the last rally after buying at 4.90. but i feel for the rest for this kind of manipulation.

Can't always go by what the Directors are doing. I remember that one Director sold PAP shares at 3.70 the next day after trading started, and couple of weeks later one collected at 4.90. Now it's trading close to 8. It's all about speculation.

Is it a buy or ??

As this is CSE under value shares are not always going up..

MoneyMaker wrote:Is it a buy or ??

Well dont enter now. to enter again we have wait till it hits 4.80 and rebound. or wait till the bid price stab at 5.

gann wrote:

MoneyMaker wrote:Is it a buy or ??

Well dont enter now. to enter again we have wait till it hits 4.80 and rebound. or wait till the bid price stab at 5.

Ya. I'am also hoping to collect at 4.9 to 4.8 levels. Then at least you know that if it doesn't go up you want loose much. I mean it will not go way below the nominal value.

IS it worth to buy FLCH @ 4.90? Will it go further down?