WELLCAL Analysis:-

Excel – http://1drv.ms/1nWRDAy

My View:-

- Fair value
  – 5Y DCF: 1.64 – 1.87 (MOS: 11% – 22%)
  – Absolute EY%: 0.85 – 1.52 (MOS: 4.01%)
  – WELLCAL is nearly valued, and I think it current price level already factored in its growth drivers.
- WELLCAL has appreciated 60% (during this time, the KLCI was only up 3% while the FBM Small Cap Index rose 19%) and dividend yield has declined to the 5% levels.
- Demand for industrial rubber hoses will continue to see gradual recovery from both the emerging and developed economies, with higher growth rates projected from the emerging markets. In the near term, WELLCAL expects the raw material prices to trend at current levels with possibly further downward inclination. The recent easing of these raw material prices has enabled a more favourable operating environment for sustainable growth in demand and earnings.
- I will wait for correction, such as WELLCAL drops to 1.30.…

Latest Financial – Q2 2014 Financial Report (16 May 2014) http://www.bursamalaysia.com/market/listed-companies/company-announcements/1624541

At the time of writing, I did not own shares of WELLCAL.