POULTRY SECTOR

some links from RAIDER :

1.  WHO report summary - 
http://money.cnn.com/2015/10/26/news/red-meat-processed-cancer-world-health-organization/

2. Prima's Product line - http://www.prima.com.lk/data/ceylon_agro_industries/prima_chicken.html

3. Bairaha's Product line - 
http://www.bairaha.com/index.php?

4. 2nd post -
http://www.forbes.com/sites/alicegwalton/2015/10/26/red-and-processed-meats-tied-to-cancer-says-who

rizan666,

Even though these shares are good and future is going to be good don't expect these three to run like a rocket. Still many holders are in profits than break even or loss situation. Even BFL reflects a strong technical sell at the moment on a/c of technical grounds.

If you have BFL keep hold on. If you are on profits and still wants to enjoy the profits sell BFL. This may and should slow down for couple of weeks or months for consolidation purpose. Then only we can expect a strong upward moment with the Dec results.

Hence nothing to worry.

I was expecting this!

BFL had cash to pay Rs. 10 so we can look forward to more interim dividends as well.

TAFL will lead the sector from now onward...

TAFL will release the report today / tomorrow... 

BvsB wrote:TAFL will lead the sector from now onward...

TAFL will release the report today / tomorrow... 

Yes. seems TAFL will going to report good report. bit heat now.

 
Yes. We can expect something from them. When compare with some other global poultry stocks, Sri-Lankan poultry stocks are massively undervalued.
 
One of the Global trends in global stock market is creating strong demand for poultry stocks and active trading on them during this turbulent period. They are appreciating faster than broader market on huge volume.  They were inactive during third quarter of 2015. On top that panic January selling and flue panic created another great opportunity this time in one of the safe havens (chicken stocks). Only intelligent investors and analysts had some idea about their major uptrend. Their major uptrend is still intact mainly due to earnings outlook in 2016/17 and due to food related consumer stocks.

http://blog.elevateresearch.com/chicken-or-beef-trends-in-fast-casual-food-sales
 
Chicken or Beef? Trends in Restaurant Sales

Some positive trend is developing for TAFL,GRAN & BFL. Days ahead could be interesting to watch.

I thought it is good to provide some analysis on the poultry industry of Sri Lanka due to several reasons.
- Stellar performance of companies have not reflected in the respective market valuations
- Investors who were previously positive on these stocks are now recommending to exit
- Investors invested on this industry stocks are now worrying because of stagnation of the stock prices
- Some are highlighting the risk of bird flue on the industry.

Well I will start my analysis from the per capita chicken consumption trend of Sri Lanka as shown below.

	2011	2012	2013	2014
Per capita chicken consumption (kg)	5.6	6.8	7.1	7.2

As you can clearly see it has been a remarkable growth and I estimate the per capita consumption to be 7.5 kg in 2015. Is this growth sustainable in the years to come, and I would say yes. Why is because the prices of substitutes such as fish, pork and beef are well ahead of a kilo of chicken and also the ethical issues associated with beef and pork consumption will restrict shifting the demand from chicken to other meet.
Then what if bird flue comes? Historically bird flue was a risk we have discussed from world risk analysis but never been hit by the Sri Lanka to date. If the world risk scenario is active again then as a precaution consumers in Sri Lanka might tend to reduce the consumption but how long it will prevail. Maximum would be few months so the impact for companies in this industry is for one quarter. This can not hurt the long term growth charts.

Ok now I'll talk a little bit on our three main poultry companies focusing on their balance sheets. You can refer for details in below table.

	TAFL		GRAN		BFL
	2015	2011	2015	2011	2015/16	2011/12
Revenue mn	2,089	1,288	13,741	10,480	3,890	2,792
Total assets mn	2,140	2,209	6,976	5,396	3,674	2,042
Equity mn	1,634	760	4,493	2,888	2,645	1,574
Debt mn	14	1,278	1,455	1,961	595	130
Net Operating cashflow mn	692	584	2,805	715	606	350
Asset turnover	1.0	0.6	2.0	1.9	1.1	1.4
Debt/Equity	0.0	1.7	0.3	0.7	0.2	0.1
Cashflow/share Rs	29	25	47	12	38	22

I attempted to compare how these 3 companies were doing in 2011 where we saw a major poultry stock rally and now where we saw a weakened rally. Look at how these 3 companies grew their equity base. Look at how these three companies grew their cashflow per share which is remarkable. And look at how these companies have increased the asset utilization efficiencies over the period. Except for BFL both GRAN & TAFL has reduced the gearing substantially. Out of these three TAFL seems to me the top company. All three companies are much stronger now than they were before in 2011.
.
Ok the next question is why the share prices are so depressed then. I explain this is a result of purposeful act of some group of people to depress the sentiment and grab as much quantity as possible at lowest possible price spreading all the negative news such as what happened in 2010/11 period, bird flue impact, selling pressure of major shareholders etc. They know in very short period of time these stocks can produce extra ordinary profits so the amount they collect at lower price will going to earn them the huge wealth. I assume they have used the selling intention of GRAN major shareholder here as a weapon to depress the market sentiment. I guess they have already got a buyer for this quantity but they purposefully delaying the transaction till they have collected the desired quantity at low prices. They know when the retailors feel that a huge seller is awaiting to sell in the market and so any time he will dump onto their heads. This fear monger has been managed very effectively by the group behind in this strategy.

So in the final analysis they will try their best to keep these stocks depressed as long as they can and collect them at very low and then they will let happen the quantity of GRAN deal and then everybody will be surprised the stock prices of these three within one month period.

I have written this for the investors who hold them as well as for the investors who are scared of establishing positions in these stocks.

Good luck

Good post EC Sir...

@EC
What numbers taken into consideration for debt/equity ratio as of 31 Dec.2015.

worthiness wrote:@EC
What numbers taken into consideration for debt/equity ratio as of 31 Dec.2015.

Equity you can see. Debt = interest bearing short-term & long-term borrowings + amounts borrowed from related companies

Being the leverage measure total liabilities to equity represents how total obligations are met by equity or net assets. accordingly based on 2015 year end data BFL,GRAN,TAFL count 38.9%,35.6% & 31% respectively. Please comments. Thx

You have to net-off CL and CA because they are represents the working capital which is short term. Equity and borrowings are more towards mapped with longer term.

Suppression of poultry sector stocks continue. It is clear that someone has check-mated TAFL rise today by putting big sell orders @129. So option is to buy little bit when price is in red zone.

Yes. TAFL Good to collect at these levels. I dont think TAFL will go down below 127.

Thanks for finding this, great to digest the chicken numbers  with some nuggets.

Shouldn't imports be done to cover the level of demand exceeding production? if so TAFL BFL & GRAN should be comfortableness with improved top-lines.

http://www.dailymirror.lk/breaking_news/No-permission-to-import-chicken-eggs-Minister/108-176


Also permission had been given to import corn stocks as feed.


Good sign of Chiken run keep on your eye BFL, Grain, CIC and TAFL

What do u think

Hold it

Bfl
Eps:
Q1 eps (4.83);Q2 eps (1.85)
Q3 & Q4 ….?
2020/21….?
2021/22 ….?

Look at the Tafl.n results and invest

EquityChamp wrote:Suppression of poultry sector stocks continue. It is clear that someone has check-mated TAFL rise today by putting big sell orders @129. So option is to buy little bit when price is in red zone.

What happened to @equity champ

aka as Teller.