(09-05-2016, 11:35 AM)mslee888 Wrote: This stock has been running almost non stop from 30++cts.
I guess a lot of positives may have been factored in...Upcoming results will reveal if the company will continue or can sustain its strong results going forward.
1Q has normally been the weakest quarter for the Group’s core business of Direct Selling due to its seasonal nature and the long Chinese New Year holidays.
A weak 1Q2016 Group results would not necessarily translate into a weak Group FY2016 results.
The increase in Group revenue in FY2015 to SGD 101.672m was due primarily to strong growth from the Group’s businesses in
Taiwan,
China and
Indonesia.
As reported in AR2015, the management is expecting growth in these 3 key markets to continue into FY2016.
For 1Q2016 results, 1Q2016 revenue for Taiwan is more or less known (see post# 116). It would be interesting to see how others markets are performing especially the Indonesia and China markets.
Even if revenue for Indonesia and China and other markets stay flat in FY2016, a strong revenue growth in Taiwan in FY2016 would be enough to propel FY2016 group revenue into new record territory.
Valuation wise based on PE ratio:
EPS (FY2015) = SGD 6.0 cents (ignoring additional Indonesia tax liability for 2008)
Share price = SGD 85 cents.
=> Historical PE = 85/6 = 14
FY2016 projection:
Assuming group revenue = SGD 125 million (vs FY2015 = 101.672m)
Assuming NPM = 14% (vs FY2015 = 13.1%, excluding additional Indonesia tax liability)
ðNPAT = SGD 17.5 m
ðEPS = SGD 8.0 cents
ðForward PE (FY2016) = 85/8 = 10.6 (vs peer PE of 17 as per CIMB report)
How much of the positives have been factored in ? I don't know.
Seems to me that further upside from a DS license being granted in China has yet to be factored in.
______________________________________________________________________________________________________________________
Research, research and research - Please do your own due diligence (DYODD) before you invest - Any reliance on my analysis is SOLELY at your own risk.