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FGV, an 11% yield
Current, target price 1.4, 3.3 (+141%)
September 18th, 2021
1 minute read
Sales up strongly
Costs lower
1 minute read
Sales up strongly
- Sales grew 38% in the second quarter to 4,682 million ringgit which is well above our forecast 3,902 million ringgit.
- This brings the average quarterly growth to 11%.
- We predict average growth of 3% in the next 12 months to bring sales to 5,247 million ringgit in the second quarter of 2022.
Costs lower
- The cash cost ratio improved slightly to -89% in the second quarter & profit jumped to 365 million ringgit on low non cash costs.
- Average quarterly costs are -88%.
- We use the average -88% to predict a 488 million ringgit profit in the second quarter of 2022.
Cashflow jumps
Balance sheet, lower leverage
Valuation, an 11% yield
- Cashflow improved significantly to 146 million ringgit with -107 million ringgit investment & would have been higher but for a large negative working capital.
- Avenge quarterly cashflow is now at 208 million ringgit.
- We use the same -107 million ringgit investment spending which with higher sales & neutral Cashflow gives a 526 million ringgit Cashflow in the second quarter of 2022.
Balance sheet, lower leverage
- Cash increased from 1,421 to 1,498 million ringgit in the second quarter.
- Liabilities declined from 11,271 to 10,971 million ringgit so net cash improved from -9,850 to -9,473 million ringgit.
- With our forecast higher cashflow & a -565 equity payout, net cash will improve to -7,995 trillion ringgit in 12 months time.
Valuation, an 11% yield
- FGV capital from the last four years increased to 2,531 million ringgit in the second quarter.
- At the current value 5,071 million ringgit, based on forecasts, it’s at 0.30X assets with an 11% yield.
- Our cashflow forecast is 2,034 million ringgit which is a 2X valuation. At 6X gives a 141% higher target price of 3.3.