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SKPETRO – Fundamental Analysis (4 Jan 2015) - L. C. Chong

Tan KW
Publish date: Sun, 04 Jan 2015, 08:26 AM
Tan KW
0 504,539
Good.

 

SKPETRO Analysis:-

Excel – http://1drv.ms/1ukfATE

Notes – http://tinyurl.com/mqm26z6

My View:-

  • Valuation:
    • 3-Y DCF:
      • Good Scenario: 4.58 (Fair value uncertainty: LOW)
      • Base Scenario: 4.21 (Fair value uncertainty: LOW)
      • Bad Scenario: 3.87 (Fair value uncertainty: LOW)
      • Ugly Scenario: 3.56 (Fair value uncertainty: LOW)
      • If growth of FCFF in the next 3 years is -13%, SKPETRO still worth 2.35.
    • Absolute PE:
      • FY14 (EPS: 0.189) – Fair value 2.31 (Fair Value Uncertainty: HIGH)
      • R4Q (EPS: 0.274) – Fair value 3.34 (Fair Value Uncertainty: MEDIUM)
    • Absolute EY%:
      • Trailing:
        • FY14 (EPS: 0.189) Fair value 4.27 (Fair Value Uncertainty: LOW)
        • R4Q (EPS: 0.274) Fair value 6.18 (Fair Value Uncertainty: LOW)
      • Forward:
        • FY15 (EPS: 0.225) Fair value 5.08 (Fair Value Uncertainty: LOW)
        • FY16 (EPS: 0.237) Fair value 5.35 (Fair Value Uncertainty: LOW)
      • EPS applied to reach the current stock price (2.35): 0.104
  • Valuation of SKPETRO is veryy attractive.
  • The recent sell-off in SKPETRO shares (-43% qoq) looks overdone. While the lower oil price has weakened the global oil & gas capex and hence, its business outlook, SKPETRO has a strong orderbook of RM26.2bn to buffer a medium-term industry slowdown. Also, its good geographical spread provides the flexibility to redeploy its asset should there be a prolonged slowdown in its home market. Key re-rating catalysts are the stabilisation in oil price, improved investor sentiment and possible return onto the Shariah compliant list in May15.
  • Remember the Warren Buffett’s most famous investment sayings: "Be fearful when others are greedy. Be greedy when others are fearful."

Latest Financial – Q3 2015 Financial Report (9 Dec 2014) http://www.bursamalaysia.com/market/listed-companies/company-announcements/1820653

At the time of writing, I owned shares of SKPETRO.

 

http://lcchong.wordpress.com/2015/01/04/skpetro-fundamental-analysis-4-jan-2015/

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1 person likes this. Showing 3 of 3 comments

orlandooil

Too simple, never takes into account the billions US$ loans and now US$ is 3.52 already

2015-01-05 08:24

Helen_Woo

Check the write up in the Sun on the scenario of the different oil prices and effects on the government deficit and GDP. Not too bad.

2015-01-05 08:33

orlandooil

Not too bad??!!??

See if it is not government propaganda, dear helen

2015-01-05 09:01

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