Sunday, August 25, 2013

Guan Chong : Dragged by weak ASP (DBSV)

Guan Chong
FULLY VALUED
RM1.64 KLCI : 1,720.37
Price Target : 12-Month RM 1.30 (Prev RM 1.35)
Dragged by weak ASP

2Q13 net profit tumbled to RM7.4m, dragged down by lower ASP for cocoa powder and inventory writedown
Earnings risks persist due to volatile cocoa price outlook
Maintain Fully Valued with lower RM1.30 TP

Highlights
Disappointing 2Q13 results. Net profit tumbled 79% y-o-y and 55% q-o-q to RM7.4m, on the back of mildly weaker revenue of RM299.1m (-4.4% y-o-y, -18% q-o-q). This takes 1H13 net profit to RM24.0m (-64% y-o-y), which is only 25% of our initial full year estimate.


Like its peers JB Foods and Petra Foods, the quarter ended June for GC was dragged down by weaker ASP for cocoa powder. The weak operating profit was also partly attributed to RM14.7m inventory write-down. These reduced EBIT margin significantly to 4.1% (vs. 2Q12: 13.8%, 1Q13: 7.0%). Thus far in 1H13, GC has marked down its inventories by RM25.2m.

Our View
Gloomy FY13 outlook. Given the volatile cocoa prices, 2H13 earnings could drop further (y-o-y). However, GC should be able to maintain profitability due to better cocoa butter sales with a recovery in butter ratio. Premised on slower earnings for the rest of 2013, after factoring in weaker margins, we cut FY13F EPS by 21% and FY14-15F earnings by about 3%. We are still forecasting > RM90m net profit for FY14-15F as earnings would improve if cocoa powder ASP recovers, which should be reflected in the next 6-12 months’ earnings.

Recommendation
Maintain Fully Valued, nudged down TP to RM1.30. Our TP is pegged to 7.5x FY14F FD EPS of 17.4 sen (prev 18 sen). GC could face earnings downside risk in the rest of FY13 if cocoa bean prices remain volatile.



Source/Extract/Excerpts/来源/转贴/摘录: DBSV-Research,
Publish date: 23/08/13

No comments:

Post a Comment

Warren E. Buffett(沃伦•巴菲特)
Be fearful when others are greedy, and be greedy when others are fearful
别人贪婪时我恐惧, 别人恐惧时我贪婪
投资只需学好两门课: 一,是如何给企业估值,二,是如何看待股市波动
吉姆·罗杰斯(Jim Rogers)
“错过时机”胜于“搞错对象”:不会全军覆没!”
做自己熟悉的事,等到发现大好机会才投钱下去

乔治·索罗斯(George Soros)

“犯错误并没有什么好羞耻的,只有知错不改才是耻辱。”

如果操作过量,即使对市场判断正确,仍会一败涂地。

李驰(中国巴菲特)
高估期间, 卖对, 不卖也对, 买是错的。
低估期间, 买对, 不买也是对, 卖是错的。

Tan Teng Boo


There’s no such thing as defensive stocks.Every stock can be defensive depending on what price you pay for it and what value you get,
冷眼(冯时能)投资概念
“买股票就是买公司的股份,买股份就是与陌生人合股做生意”。
合股做生意,则公司股份的业绩高于一切,而股票的价值决定于盈利。
价值是本,价格是末,故公司比股市重要百倍。
曹仁超-香港股神/港股明灯
1.有智慧,不如趁势
2.止损不止盈
成功者所以成功,是因为不怕失败!失败者所以失败,是失败后不再尝试!
曾淵滄-散户明灯
每逢灾难就是机会,而是在灾难发生时贱价买股票,然后放在一边,耐性地等灾难结束
  • Selected Indexes 52 week range

  • Margin of Safety

    Investment Clock

    World's First Interactive Investment Clock