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Wednesday, March 25, 2015

SCIENTX – Fundamental Analysis (25 Mar 2015) - L. C. Chong

SCIENTX Analysis:-
My View:-
  • Valuation:
    • 5Y DCF:
      • Good Scenario: 10.8 (Fair value uncertainty: LOW)
      • Base Scenario: 9.39 (Fair value uncertainty: MEDIUM)
      • Bad Scenario: 8.15 (Fair value uncertainty: MEDIUM)
      • Ugly Scenario: 7.05 (Fair value uncertainty: HIGH)
      • At current price (6.6), based on RDCF, assumption of FCFF growth rate in the next 5 years is 0.3%.
    • Absolute EY%:
      • Trailing:
        • FY14 (EPS: 0.671) – Fair value 5.34 (Fair Value Uncertainty: VERY HIGH)
        • R4Q (EPS: 0.678) – Fair value 5.4 (Fair Value Uncertainty: VERY HIGH)
      • Forward:
        • FY15 (EPS: 0.729) – Fair value 5.8 (Fair Value Uncertainty: VERY HIGH)
        • FY16 (EPS: 0.822) – Fair value 6.54 (Fair Value Uncertainty: HIGH)
      • EPS applied to reach the current stock price (6.6): 0.829
  • The cast polypropylene (CPP) film (extensively used in flexible packaging of food and beverages) plant is expected to commence operations by end-2015. This new product should increase the production capacity in FY15 to sustain the group performance in this industry.
  • 24 Mar 2015 – SCIENTX will be less impacted by weakening of MYR after the company reduced their USD borrowings exposure to 58% as of 2Q15 (vs. 77% in 1Q15).
  • The implementation of GST in April 2015 will give short-term impact on demand for the group.
  • Valuation of SCIENTX is not attractive. In overall, uncertainty of fair values is from MEDIUM to VERY HIGH.
Latest Financial – Q2 2015 Financial Report (23 Mar 2015) http://www.bursamalaysia.com/market/listed-companies/company-announcements/1909681
At the time of writing, I did not own shares of SCIENTX.

https://lcchong.wordpress.com/2015/03/25/scientx-fundamental-analysis-25-mar-2015/

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