SKPETRO (5218) : SKPETRO – Fundamental Analysis (10 Dec 2014)

SKPETRO (5218) : SKPETRO – Fundamental Analysis (10 Dec 2014)

SKPETRO Analysis:-

Excel – http://1drv.ms/1ukfATE

Notes – http://tinyurl.com/ofcwwjx

My View:-

    Fair Value:
    3-Y DCF:
    – Base Scenario: 4.21 (Fair Value Uncertainty: LOW)
    – Good Scenario: 4.58 (Fair Value Uncertainty: LOW)
    – Bad Scenario: 3.87 (Fair Value Uncertainty: LOW)
    – Ugly Scenario: 3.56 (Fair Value Uncertainty: LOW)
    Absolute PE:
    FY14 (EPS: 0.189) – Fair value 2.31 (Fair Value Uncertainty: HIGH)
    R4Q (EPS: 0.274) – Fair value 3.34 (Fair Value Uncertainty: MEDIUM)
      – Absolute EY%:
    Trailing:
    FY14 (EPS: 0.189) – Fair value 7.08 (Fair Value Uncertainty: LOW)
    R4Q (EPS: 0.274) – Fair value 10.25 (Fair Value Uncertainty: LOW)
    Forward:
    FY15 (EPS: 0.239) – Fair value 8.95 (Fair Value Uncertainty: LOW)
    FY16 (EPS: 0.255) – Fair value 9.57 (Fair Value Uncertainty: LOW)
    EPS applied to reach the current stock price (2.45): 0.065
    I won’t use Absolute EY% for this case because the valuation is too optimistic. 3-Y DCF and Absolute PE indicates that SKPETRO is undervalued.
    –  I am positive on SapuraKencana for its strong quality and well diversified orderbook, healthy earnings and consistent job wins.
    Many people asked me whether we should buy O&G counters now. I consider SKPETRO as part of my value investing portfolio. In my opinion, I think this is good time to accumulate O&G counters. Remember the Warren Buffett’s most famous investment sayings: “Be fearful when others are greedy. Be greedy when others are fearful.”

Latest Financial – Q3 2015 Financial Report (9 Dec 2014) http://www.bursamalaysia.com/market/listed-companies/company-announcements/1820653

At the time of writing, I owned shares of SKPETRO.

http://lcchong.wordpress.com