Posted by ipomember > 2017-05-25 14:31 | Report Abuse

i am interested on what rate you are using in calculating the dcf. kindly let me know all the details of calculation if ok. thank you so much

Posted by sosfinance > 2017-05-25 14:53 | Report Abuse

If you are convinced they can do a CAGR of 80% for next 3 years, i.e. profit of RM230m by 2020, its a bargain. It is rare profit goes up 6x in 3 years, well, JJPTR may have done that.

Posted by Redstart > 2017-05-26 11:33 | Report Abuse

Our discount rate is 8.78%. It low because we used the unlevered beta of about 100+ listed transportation companies in the region. It not surprising, logistics is growing and hot sector, its likely to be more resilient.

Our profit projections are in the similar ballpark. We have it at about 190-200m by 2020. Just that from free-cash flow perspective it won't be as explosive. Although a lot can argue there is organic growth, we typically stick to the believe, you need to pay for growth, it doesn't just grow in trees. They can leverage on their partnerships, but unless its a merger - if we get say a GD & City Link Sdn Bhd. They need to grow their own infrastructure. None of that will come free or cheap. That impacts DCF valuation.

A lot of things need to happen right - we don't want to give them too many free passes in our valuation. Others might be more optimistic they can achieve more with less.