COCO interim report out

http://www.cse.lk/cmt/upload_report_file/461_1297423393.pdf

EPS 2.38

Profit went down. Cost of sales went up sharply. May be due to the weather condition.

Monster wrote:http://www.cse.lk/cmt/upload_report_file/461_1297423393.pdf

EPS 2.38

Profit went down. Cost of sales went up sharply. May be due to the weather condition.

No mainly due to the coconut condition . Can you remember from what price to what price a coconut went in that period ?

Now where are those people who were touting this as a value gem? Didn't this go up 30% over the week? Let this be a lesson to all those who buy shares based purely on what share is hawked by brokers on facebook or a forum.

Rajitha wrote:

Monster wrote:http://www.cse.lk/cmt/upload_report_file/461_1297423393.pdf

EPS 2.38

Profit went down. Cost of sales went up sharply. May be due to the weather condition.

No mainly due to coconut condition . Can you remember from what price to what price a coconut go in that period ?

Coconut price went up sharply due to weather condition

Same thing happend to HAYC as well

Tubal,

Don't be surprise if this continues to go up on Monday...this is the CSE and stranger things take place. I wonder how they will do in the last quarter. Anualised EPS around 12 I believe Current PE to be around 9 I guess thats why these are at low PE levels maybe the risk factor .

$$$ wrote:Tubal,

Don't be surprise if this continues to go up on Monday...this is the CSE and stranger things take place. I wonder how they will do in the last quarter. Anualised EPS around 12 I believe Current PE to be around 9 I guess thats why these are at low PE levels maybe the risk factor .

you are right of course. This is the CSE.

RHL profit also down sharply. Both these shares appreciated much during last two weeks.

EPS for q is 2.38 down from 6.7 for last q.But their last q , they had abn0rmal profit from other income =102.2m (This mainly consist of interest income and mark to market valuation of
short term investment).. where as this was around 20~30m in q1 and q3 Hence this is acceptable..

The Point is, for 9th months EPS is 10.47... And if we assume same EPS for next q(with out any growth) Anual EPS would be 10.47+2.38=12.85...(definetly this shd be more than this)

considering the Current market price of 90 ,it is still trading at PER of 7...Considering the current sector of this ,that is investment trust... sector per is 7.79 and fair value will be around 100....
isn't it under value yet ???

correct me if I'm wrong pls...

Dear Members,

there are things that we have to closely monitor rather just going through interim report.

"Coco Lanka had recorded a consolidated Turnover of Rs 1.68 billion a 83% increase from the
corresponding period of the previous year. Profit after taxation was Rs 295.6 million versus Rs 170.1
million for the corresponding period of previous year of which profit attributable to shareholders was
Rs 244.9 million. The company is today an investment trust managing a portfolio consisting of
investments in equity, debt instruments, biological assets (forestry) and agriculture."

"Earning per share is Rs 10.47 for the period and we believe is very attractive in terms of the
prevailing market prices of our shares both voting and non voting. The net asset value per share of
the Group has increased to Rs 45.99 s at 31 st December 2010 compared to Rs 40.47 as at 31
March 2010."

Factors to consider..

1. The % growth in Turn Over --- Representing High level of demand for its products even though the price is
high.

2. Current PE levels as low as it can be in a market where PE is very much more than 15-20 times

3. Healthy EPS reflects high dividend yield -- Total number of shares being less than 30 Mn in the market

***However the rise in Cost of Sales is evident.But the rise will become worse when the company is unable
to market the products.

***In COCO Even the cost of sales increased the Revenue has grown sharply as well.

***Therefore we must look in to another 3-5 years time and grab the counters which are well below the in
PE's and highest growth potential..


Gud Luck

Can Someone give a solid Technical analysis of COCO?
how much it's worth technically based on fundamentals?

In 'Coco lanka-Value gem' post there are 2 valuations.. I don't think those are correct.. If it's incorrect, Admin pls delete those posts as they are misleading..

ONTHEMONEY wrote:

Current Valuation

Last 9 profit ------ 237-48(minority interest) = 189Mn

EPS ------ 189/21 = 9

Annualized ----- 9/3*4 = 12

Projected Price -------- 12@ 15PE = Rs 180/-

SilverHawk wrote:
COCO.N, BVPS : 47.6

NP Last quarter 156.8
NP Comparative Quarter (2009) 50.9
NP last quarter YoY 208.2%

NP 9 months cumulative period 189.2
NP Comparative 9 months cumulative period (2009) 84.8
NP Comparative 9 months cumulative period YoY 123.1%

EPS Last quarter 6.7
EPS 2 quarter cumulative period : 8.1 (189.2 / 21.6 + 1.8 ) (Year end March)

Trailing EPS (last 4 quarters sum) : 10.1
current sector PE 23, if we discounted to @ 15
price can be 10.1 X 15 = 151

Trailing EPS (AVG of last 2 quarters) : 8.1/2 X 4 = 16.2
current sector PE 23, if we discounted to @ 15
price can be 16.2 X 15 = 243

Dear Members,

PLs find the COCO in a nutshel...

Annualized EPS----- 10.47/3*4 ---- 13.96

PE ---- 91.50/(10.47/3*4) --------- 6.55 times

***Current Market PE -------- 27 Times***

Projected Price @ Discounted 10 PE

13.96 @ 10 ---------- Rs 139.60

Projected Price @ Discounted 15 PE

13.96 @ 15 ----------- Rs 209.40

Note - The above is calculated based on the latest Interim reports generated.Pls do your home work and witness it by your self..

Gud Luck

[/i]

can some one explain to me more about COCO's business. because when you take out all the dressing up they do, like Mark to market adjustments, i see a lot of variance in their earning across the quarters.

So if we treat this as a plantation type share with seasonal variance. A PE over 10 starts getting risky. So while this was a easy buy at the 40 levels, in the 90s this might become risky.

I know their business is quite dependent on coconuts. Do they grow their own stuff?

If any have COCO shares, the best thing is to dispose off them slowly...
Take it from me the cost of sales (Actually Cost of production) is going to make it a loss making firm in the next qtr.

Forget about marketing coconut products as Europe / Asian / Middle East markets will not pay for the high cost.
Coconut is a non-essential commodity and only industrial operations will continue to buy these products as raw materials. Cans are out of the question.

So, in the final analysis, its not safe to cling on to cherished dreams. It may turn out to be a nightmare!

The company is today an investment trust managing a portfolio consisting of
investments in equity, debt instruments, biological assets (forestry) and agriculture."

Gud Luk

monash wrote:Can Someone give a solid Technical analysis of COCO?
how much it's worth technically based on fundamentals?

In 'Coco lanka-Value gem' post there are 2 valuations.. I don't think those are correct.. If it's incorrect, Admin pls delete those posts as they are misleading..

ONTHEMONEY wrote:

Current Valuation

Last 9 profit ------ 237-48(minority interest) = 189Mn

EPS ------ 189/21 = 9

Annualized ----- 9/3*4 = 12

Projected Price -------- 12@ 15PE = Rs 180/-

SilverHawk wrote:
COCO.N, BVPS : 47.6

NP Last quarter 156.8
NP Comparative Quarter (2009) 50.9
NP last quarter YoY 208.2%

NP 9 months cumulative period 189.2
NP Comparative 9 months cumulative period (2009) 84.8
NP Comparative 9 months cumulative period YoY 123.1%

EPS Last quarter 6.7
EPS 2 quarter cumulative period : 8.1 (189.2 / 21.6 + 1.8 ) (Year end March)

Trailing EPS (last 4 quarters sum) : 10.1
current sector PE 23, if we discounted to @ 15
price can be 10.1 X 15 = 151

Trailing EPS (AVG of last 2 quarters) : 8.1/2 X 4 = 16.2
current sector PE 23, if we discounted to @ 15
price can be 16.2 X 15 = 243

Please keep in mind that, there is no exact valuation for a particular stock. It depends on how we assume their future growth. Say for example someone might assume particular share will performed similar as it did in same period, previous financial year. Someone could say, it will perform same or better than its last quarter results. Another person can assume, it will not making any profit in next quarter, even it make a profit in last quarter ect..

Important point is, whether they mentioning how he/she did the valuation base on which assumptions. Then can make a decision yourself, whether those assumptions can be acceptable to you or not. It’s your money; you have to make the final decision.

Please point out, if I did any incorrect calculation as you specified in my post. That will help me to correct myself. There were 2 valuations,

Trailing EPS (last 4 quarters sum): 10.1
current sector PE 23, if we discounted to @ 15
price can be 10.1 X 15 = 151

With Q3 results, they have passed the EPS 10.5 (8.1 + 2.4), which was exceeding what I predict.
If they able to produce NP what they did in last quarter 2009/10,
We can expect annualized EPS of 8.1 + 2.5 + 0.5 = 11

As per the current sector PE for food & tobacco is 23, and we discounted it to @15,
COCO price can be 161

EPS pattern,

2009/10
Q1: 2.7
Q2: 4.04
Q3: 3.16
Q4: 0.47

2010/11
Q1: 1.4
Q2: 6.7
Q3: 2.5
Q4: ?

Above EPS for last 7 quarters for your reference. Make your own decision. Remember CSE not behave according to the fundamentals, but it is safe, if you are following the fundamentals.

ONTHEMONEY wrote:The company is today an investment trust managing a portfolio consisting of
investments in equity, debt instruments, biological assets (forestry) and agriculture."

What is the performance of each of the segments mentioned by you?
What is the core business?
Can the company sustain growth in each of these sectors?
How good are they at investments?

Agreed that their main income come from desiccated coconut production. Due to high coconut price in local market, COCO cost of sales was increase in last quarter. Perhaps it will be similar in this quarter as, I’m not expecting further coconut price increase in local market.

pointless looking at PE if this is to be treated as an investment trust. the real question is how much assets they hold, what are they and when were these acquired.

and.... can they repeatedly make good investment.

SilverHawk wrote:Agreed that their main income come from desiccated coconut production. Due to high coconut price in local market, COCO cost of sales was increase in last quarter. Perhaps it will be similar in this quarter as, I’m not expecting further coconut price increase in local market.

How long will it takes for coconut siblings to be planted and bear fruit?
With all the rains how many plantations were ruined?
Do you know that a slight long monsoon can destroy all the coconut flowers and that means one cycle is already gone in the winds? I tell you, that is what has happened in other areas. The Coconut triangle may be not so bad except Puttalam area.

Other countries are finding it difficult to buy DC / Coconuts at these high levels. Export Sales will plummet. That would drain all the other segmental profits to a great degree.

mono wrote:pointless looking at PE if this is to be treated as an investment trust. the real question is how much assets they hold, what are they and when were these acquired.

and.... can they repeatedly make good investment.

Well if it's an investment trust and the market drops .....

tubal wrote:

mono wrote:pointless looking at PE if this is to be treated as an investment trust. the real question is how much assets they hold, what are they and when were these acquired.

and.... can they repeatedly make good investment.

Well if it's an investment trust and the market drops .....

what if the market up ?

thanks all...I think end of the day we had good discussion on COCO...

at CSE website and my brokers report, COCO categorize under food and tobacco.
below link represent good comparison of coco with other stocks of sector.

http://forum.srilankaequity.com/t686-whats-wrong-with-poultry-sector#4023

Dear Investors,

No point making COCO shines a lot.I have a basis on COCO and my strategy on my portfolio is different to yours.

There are players whom invest blindly,

There are players go behind fundamentals,

There are players to follow the crowd,

There are players who follow news,trends,high net worth buying,

We have to buy shares or sell shares on a basis.

Current Market PE is around 27 times,

So it is extremely risk averse buy a stock that is below the PE of 10 times.

Gud Luck