Super Group

(26-09-2014, 11:43 PM)eve Wrote: Hi all,

I have been reading the past posts and have learnt a lot through the discussions. There's much focus on Super's coffee. How about its other products like the cereals and the organic soya milk beverage? Personally, I use to drink another brand's more expensive Soya milk every night. But ever since, I tried Super's organic Soya milk, I have not switched back. Now, my whole family takes Super's Soya milk. Nicer and cheaper.

That is what I noticed as well. Super's cereal and organic soya milk have been at the supermarkets' front shelves recently. In fact, to my surprise, I even noticed a few packets at my home. How will this new segment contribute to Super's future growth? Let's see in the future earnings reports.

(Vested)

(27-09-2014, 10:38 AM)LLS Wrote: Super is down like 40% over the last 12 months
at close to 20 times estimated earnings it does look expensive
but for long term investors I think you could be paying a much lesser multi if they can improve earnings back in the years to come
(say 2-5 year period)

Hi LLS,

Good point put forward, how much should we pay in current P/E for growth? For me, companies in the FMCG, one of my benchmark: To buy a company worth 15x P/E 3 years from now.

Thus for super at 20 P/E now to hit my qualifying requirement of 15x P/E, Super's earnings has to grow 10.0% per year. Thus, the question you have to ask is Super able to grow its earnings 10% per year? To me, its a "no". At best Super will only grow 7-8% per year

Lastly, do note I am talking about fair value of Super in this thread. I want a margin of safety as I am making assumptions in my valuation. For my investment philosophy, I always demand it trades at 70% to my valued amount; for reputable firms, its 75-80%. This is my minimum margin of safety.

Super appears to be a Sam Goi stock... its prime days appeared to be behind them as they probably missed their sellout to bigger players for 1 reason or another.

Once a darling falls from grace, it will take a lot to stablise and recover...

Odd Lots Vested
GG

What would be a good entry level with a comfortable margin of safety?
say $1.00? or maybe 15 times recent earnings?

Lets treat this as a valuation exercise.

Expected current EPS = 6.6 cents.
Targeted EPS at end of 3rd year (@8% growth rate) = 8.31 cents
Price target at end of 3rd year = 8.31*15= $1.25
Say 20% discount for margin of safety (Well-known brand with negligible debt) and 20% discount for holding Super for 3 years with expected 6.26% return per annum

Valuation to enter Super now = $1.25*0.6= $0.75

Courtesy of CY09 Research and Valuation services

"Valuation to enter Super now = $1.25*0.55= $0.685"

really that low? lol, that means its grossly overvalued now!

I think the valuations depends so much on the growth rate we assign and the earnings multi we willingly to pay

hm... btw thanks all for the feedback, think I will avoid this counter~ seems expensive even after the 40% correction in stock price!!

(27-09-2014, 10:45 AM)LocalOptimal Wrote:

(26-09-2014, 11:43 PM)eve Wrote: Hi all,

I have been reading the past posts and have learnt a lot through the discussions. There's much focus on Super's coffee. How about its other products like the cereals and the organic soya milk beverage? Personally, I use to drink another brand's more expensive Soya milk every night. But ever since, I tried Super's organic Soya milk, I have not switched back. Now, my whole family takes Super's Soya milk. Nicer and cheaper.

That is what I noticed as well. Super's cereal and organic soya milk have been at the supermarkets' front shelves recently. In fact, to my surprise, I even noticed a few packets at my home. How will this new segment contribute to Super's future growth? Let's see in the future earnings reports.

(Vested)

Today, I went to Clementi mall NTUC to replenish Super Soya milk beverage, the shelf for it was empty. I check with the aunty there if they have forgotten to replenish it. I was told that it was all sold out. Hope this is a good sign for Super.

(06-10-2014, 06:34 PM)eve Wrote:

(27-09-2014, 10:45 AM)LocalOptimal Wrote:

(26-09-2014, 11:43 PM)eve Wrote: Hi all,

I have been reading the past posts and have learnt a lot through the discussions. There's much focus on Super's coffee. How about its other products like the cereals and the organic soya milk beverage? Personally, I use to drink another brand's more expensive Soya milk every night. But ever since, I tried Super's organic Soya milk, I have not switched back. Now, my whole family takes Super's Soya milk. Nicer and cheaper.

That is what I noticed as well. Super's cereal and organic soya milk have been at the supermarkets' front shelves recently. In fact, to my surprise, I even noticed a few packets at my home. How will this new segment contribute to Super's future growth? Let's see in the future earnings reports.

(Vested)

Today, I went to Clementi mall NTUC to replenish Super Soya milk beverage, the shelf for it was empty. I check with the aunty there if they have forgotten to replenish it. I was told that it was all sold out. Hope this is a good sign for Super.

Have also noticed recurring Super TV advertisements on their new products. Super has definitely been splashing out on its R&D, re-branding and advertising.

Like what many buddies mentioned, it's a cut-throat industry to be in, especially with many competitors. Off the top of my head, I can name more coffee brands than my fingers can count. IMO, from what I see, Super is showing some effort to try to stand out.

(Vested)

Currently still trading at 20 times
attached is report from kay hian
  Super Group.pdf (Size: 234.51 KB / Downloads: 104)

Super group entered my watchlist today @ below 1.1. Very interesting to see their financial result next week.