In my 20 plus years of stock investment experience , the IBs knows only how to value a gradual linear growth stocks but not the super high spiky Bell Curve growth stocks . The IBs will give good PE for linear growth stocks but give an extremely low PE for Bell Curve growth stocks although both stocks end at the same point after a few years of growths . I had illustrated how bad the IBs misvalue the current Bell Curve growth of glove stocks in my previous message 2 days ago . Let me illustrate and summarise the two different scenarios to make the misjudgements or misvaluations by the IBs more obvious .
1. First Scenario ( the Hypothetical gradual linear growth scenario )
a. ASP growth of 10 % per year from 2020 t0 2023 ( from ASP of US 22 in 2019 to 32.2 in 2023 )
b. Capacity growth of 18 % per year from 25 billions pa to 48.5 billions per annum.
c. Nett Margin grow from 8 in 2019 to 10 , 12 ,15 and 18 % in 2023/
PAT , EPS and Tgt Values
FY 2019 125 m ( base or reference pt )
FY 2020 459 m FY 2021 744 m FY 2022 966 m FY 2023 1505 m
Total 3674 millions
We are now in 2021 . What will the IB value supermx which has a growth 0f its PAT by 8.88 x within two years ? What PE will the IB give ? 15 , 18, 20 or 25 ? If I take a very conservative PE of 18 ,with an EPS of 27.3 sen , the target value would have been RM 4.92 . In other industry like the semicon , the IBs would have given a PE of 30 to 60 to such stocks which have 7 to 8 consecutive qtrs of superberb 2 to 3 digits growth rates .
2. Current scenario ( Bell Curve Growth Scenario )
a. ASP growth of 30 % in FY 2020 and then 300 % in 2021 . Then it taper off 40 % in 2022 and then another 40 % in 2023 to US 32.2 .
b. Similar capacity growth as First Scenario of 18 % per year from 25 billions pa to 48.5 billions pa.
c. Nett Margin grow from 8 % in FY 2019 t0 25 % in FY 2020 , 55 % in 2021 and then taper off to 30 % in 2022 and 18 % to 2023 .
PAT , EPS and Target Value
FY 2019 125 millions ( actual and referencept )
FY 2020 524 millions ( actual ) FY 2021 3854 millions ( actual 2854+ 1000 projected ) FY 2022 2800 millions ( projected ) FY 2023 1505 millions ( projected similar to First Scenario)
Total 8683 millions
This Bell Curve actual current scenario has much higher earnings in 2020 , 2021 and most likely 2022 than the First linear gradual growth Scenario and both will meet at the same 2023 ASPs and Capacity and hence the same earnings. The current Bell Curve Scenario will be much better off with additional 5 billions earnings compared with the First Scenario .
What is the PE and target value the IBs assigned to currently in 2021 ? With the PAT of 3854 , the EPS is RM 1.42 . With the current price of 3.10 , the PE is only 2.2 . Is it justified to give such a low PE with a 30.8 X growth in earnings compared with 2019 ? The IBs and the Shorties are spinning with crappy reasons that ASP is coming down ,oversupply , vaccines are available , pandemic will be over despite the fact that both Scenarios will reach the SAME end point with ASP of US 32.2 and Capacity of 48.5 billions pa . IBs will give a beautiful growth story and assign much higher PE than 15 for year 2021, 2022 and 2023 . ASP is growing and good capacity expansion despite the fact that the current scenario actually earn 5 billions more in total than the first linear growth rate scenario. Isnt this is an obvious misjudgement by the Ibs or pure incompetent or plainly irrational and stupxxd ? Pankaj Kumar ,the ex Stock Analyst wrote an article in the Star a few months ago titled " Stock Valuations is an Art " . He basically mentioned that to value a Super growth Bell Curve Stock requires a different approach . I hope my this write up will give the IBs another look at how to value the super growth Bell Curve stocks PROPERLY so that the public retailers and fund managers will not be misled . I welcome civilised and professional comments from Ibs and the general public .
Disclaimer : THis is not a buy or sell call . It is for sharings with serious supermx investors and also the Ibs .
Pjseow comment do make a lot of sense is due to undestroyable covid
The rise in cases comes as the Philippines' health ministry said on Sunday it has detected the first case of the Lambda variant in the country.
The World Health Organization classifies Lambda, which was first identified in Peru in December, as a "variant of interest" as laboratory studies showed it has mutations that resist vaccine-induced antibodies.
This going get crazy
As we get to know delta more. Other mutant start knocking at the door. This is what ib didnt realise this covid is not H1N1.Its bad for mankind but busness are good for glove.
One more week to go and the Q1 results would be out. Why the delay for this quarter? 1 side is telling that it's a poorer results, hence the delayed. Another side is telling that the company is waiting for other good news before releasing the QR together, hence the delayed. The market expectation is around rm800 mil profit.
Abnormal fat and ugly profit is going to get out of control This what IB cant projected in thier mind Shorty come and short short for fun thinking covid is history by NOW. Slowly they too realise this motherfxxr covid 19 is try to destory menkind.
I pretty sure no ones in this forum dare to shout this covid will be over soon!! Ib is well versa with wave. ASP price is also flow like wave. Now asp will shoot up like 3rd wave soon!!!!
Where is stupeed citadel....poor naysayers... please go to FinTech group kacang puteh company if you have no money to invest... this is our money...up to us which counter to invest
MM , my write up is definetly not for you as I know you are too dumb.to understand simple maths and English. It is for the IBs , fund managers , majority serious investors and retailers. They will see the obvious undervalue of supermx sooner or later
The Gradual linear growth rate Scenario actually happen without the need of having a pandemic. The sporadic epidemic like the SARS in 2003 and the H1N1 in 2019 to 2010 is sufficient to generate the ASP growth of 10 % annually. Analyst prefer this type of linear growth because they know how to value stocks with linear growth. They do not know or they are not competent to value the current.super Bell Curve growth . My write up is to make them wake up or open their eyes there is a gross.misvaluation or misjudgement on the current values of glove stocks. ------------------------------------------ I3deletemycomment Pjseow comment do make a lot of sense is due to undestroyable covid
If this happens, 50% of Malaysian would be gone. Who gonna care about recovery? There wont be recovery and Bursa too will close shop. End of the world is here.
Be Very, Very Careful what you wish....Lamb'Da coming ( vaccine resistance ) ALL bangla in SuperMax will be dead...who is going to operate machinery?? 3 months SuperMax will declare Bankrupt and you got All the Toilet paper you want 20/08/2021 4:52 PM
This book is the result of the author's many years of experience and observation throughout his 26 years in the stockbroking industry. It was written for general public to learn to invest based on facts and not on fantasies or hearsay....
Stealth
577 posts
Posted by Stealth > 2021-08-20 13:19 | Report Abuse
WHO PUT HIM IN?? HIMSELF LAH!! HAHAHA!!