China milk 1Q09
China milk's 1Q results are out.
Only have time to browse through press release and power point slides. I'll do a more detailed analysis when I've the time.
To summarise:
1. EPS increased from 0.11 RMB in 1Q08 to 0.14 1Q09, a 27.3% growth
2. Revenue grown from 124.2 mil RMB to 158.4 mil RMB, 27.6% growth
3. NAV rose from 2.46 to current 2.61 in 1Q09
4. announced JV with a govt owned bureau and a third party (unnamed) to acquire like 200 pedigree bull sires. That's 140 mil RMB investment with 40% stake - all self funded
5. raw milk processing, OEM basis, will be out in 2Q towards end of year
6. Interim dividend declared, around SGD $5.60 per lot
Quick thoughts:
Not sure if they are going to give interim dividends for the next 3 quarters. If they do, that will give an annualised dividend yield of around 3% at last closing price. Great growth from EPS - what's good is that they are not as badly hit by rising material cost as other companies. In fact, they played the inflation game pretty well. Read that they had to buy more fertillisers as they do not have enough generated internally - will this be a long term running cost for the company? Have to read more.
The raw milk processing, having being delayed for some time, had been finalised to be 2Q towards end of this year. Let's hope no more delays now. The announced JV with Heilongjiang govt, with china milk taking a 40% stake, will see them acquire 200 pedigree bull sires. This will strengthen their monopolistic status on their sperm business...a very good sign to me.
Quick valuation
EPS at 1Q is 0.14 RMB. Annualising it gives us SGD 0.112. At last closing price of 0.695, that's a forward PE of 6.21x. Not sure if this is high or low, cos this must be the first time I'm analysing their results. Price is around 1.3x NAV value too. Considering their high current ratio and low gearing, this company will have no solvency issues in the near future.
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Thks to littlecupid, who pointed out that my PE calculation for china milk is wrong. It read as 16x initially but I've changed it to the correct 6.21x now.
Stumble it!
Only have time to browse through press release and power point slides. I'll do a more detailed analysis when I've the time.
To summarise:
1. EPS increased from 0.11 RMB in 1Q08 to 0.14 1Q09, a 27.3% growth
2. Revenue grown from 124.2 mil RMB to 158.4 mil RMB, 27.6% growth
3. NAV rose from 2.46 to current 2.61 in 1Q09
4. announced JV with a govt owned bureau and a third party (unnamed) to acquire like 200 pedigree bull sires. That's 140 mil RMB investment with 40% stake - all self funded
5. raw milk processing, OEM basis, will be out in 2Q towards end of year
6. Interim dividend declared, around SGD $5.60 per lot
Quick thoughts:
Not sure if they are going to give interim dividends for the next 3 quarters. If they do, that will give an annualised dividend yield of around 3% at last closing price. Great growth from EPS - what's good is that they are not as badly hit by rising material cost as other companies. In fact, they played the inflation game pretty well. Read that they had to buy more fertillisers as they do not have enough generated internally - will this be a long term running cost for the company? Have to read more.
The raw milk processing, having being delayed for some time, had been finalised to be 2Q towards end of this year. Let's hope no more delays now. The announced JV with Heilongjiang govt, with china milk taking a 40% stake, will see them acquire 200 pedigree bull sires. This will strengthen their monopolistic status on their sperm business...a very good sign to me.
Quick valuation
EPS at 1Q is 0.14 RMB. Annualising it gives us SGD 0.112. At last closing price of 0.695, that's a forward PE of 6.21x. Not sure if this is high or low, cos this must be the first time I'm analysing their results. Price is around 1.3x NAV value too. Considering their high current ratio and low gearing, this company will have no solvency issues in the near future.
------------------
Thks to littlecupid, who pointed out that my PE calculation for china milk is wrong. It read as 16x initially but I've changed it to the correct 6.21x now.
Stumble it!