MORGAN STANLEY DOWNGRADES BAP TO EQUAL-WEIGHT FROM OVERWEIGHT, page-42

Its an interesting one isn't it @peejay2. Its got me scratching my head too as to why SP hasn't bounced.

The Share price is still 19% down on where it was a couple of months ago, with Daryl Abotomey's retirement being the catalyst for the drop. It has not recovered yet but it inevitably has to. The CEO in a company as well established as BAP is a figurehead, not much more. The BAP foundations were layed long ago, it's the board who steer the ship and the masses of Leadership teams, EGM's, Senior Managers, Regional Managers who execute the results.

The table below shows where BAP is deriving FY21's $280m EDITDA from. Whilst BAP Financial's are super impressive, when broken down to individually it's obvious that once their aggresive growth strategy takes effect, BAP will be a money making machine.

Obvious areas of opportunity lie in Bapcor NZ and Specialist Wholesale - FY21 Specialist wholesale EBITDA didn't include Truckline or Diesel Drive which will also be a big contributor FY22 and beyond.

Bapcor Asia is still very early stages and i dont this we will see benefits from this in the short term, but long term maybe.

	Column 1	Column 2	Column 3	Column 4	Column 5
0		Brands	Locations	EBITDA	Earnings per store
1	Burson Trade		200	$115,000,000	$575,000
2	Bapcor NZ		222	$33,000,000	$148,649
3	Specialist Wholesale	Wano, Truckline, Diesel Drive	191	$90,000,000	$471,204
4	Bapcor Retail	Autobarn, AutoPro, Midas, ABS	341	$65,000,000	$190,616
5	Bapcor Asia	Burson Thailand, Tye Soon (25%),	67	-$23,000,000
6	Totals			$280,000,000

Strong Financials- $39m in cash, only $205m in debt and a futher $315 undrawn if needed.

Revenue -26% CAGR from FY14 to FY21
EPS- 18% CAGR from FY14 to FY21
EBITDA - 34% CAGR from FY14 to FY21
NPAT - 31% CAGR from FY14 to FY21
Divendends- 15% CAGR from FY14 to FY21

Yet at today's SP, the SP has "only" risen by a CAGR of 16.89% (exluding divedends).

Then there's the obvious financial benefits and operational synergies of closing down 13 individual warehouses and moving into one centralised Distribution Centre estimated to add approx $15m benefit in lease liabilities to the bottom line.

Add to this the further 400 added locations in the next 36 months i think there will be a profound re-rate.

I originally bought BAP as a trading stock but the more i look into it the more i like it.

All in my opinion of course