The 3 Dollar Party is coming very soon, as the 2017 Half Yearly Report will be released on 15th Feb.
Will the SP hit A$3 on 15th? We shall wait and see, as only 7 trading sessions remaining...
My rational for A$3 this time is as follows:
Half year revenue number is
NZ$272.6m, as calculated below:
4M16 revenue: 79.3m
1, monthly average: 19.83m(79.3/4);
1H16 revenue: 139.2m
2;
Nov & Dec 2016 revenue: 59.9m(139.2-79.3), monthly average: 30m;
The monthly average for Nov & Dec is 51.3% higher than that for 4M16(30/19.83).
4M17 revenue: 155.2m
3, monthly average: 38.8m(155.2/4);
Apply the same growth rate of 51.3%, we get a monthly average of 58.7m(38.8x1.513) for Nov & Dec 2017.
Therefore, the total 1H17 revenue would be NZ$272.6m(155.2+58.7x2).
Assuming that 2H17 revenue is 5% higher than 1H17,
the total annual avenue of 2017 would be $558.8m (272.6+272.6x1.05).
The growth rate of 5% is reasonable and conservative, as 2H16 revenue was 53.6% higher than 1H16 (total annual revenue of 2016 was 352.8m, 1H16 was 139.1m and 2H16 was 213.7m).
Assuming that full year NPAT margin is 15%, the
NPAT would be $83.8m.
The full year margin of 15% is reasonable, as the margin was already 14.2% (22m/155.2m) for the 4M17 (see Annual meeting presentation 2016, p.18), and conservative as slc4me expects the full year margin would be at least 16%
4.
Then, the
EPS would be 11.7 cents (83.8m/715.87m of shares outstanding
5).
And give a PE of 28x,
the fair value of A2M would be NZ$3.28 (0.117x28), or A$3.12.
Again, the PE of 28x is reasonable, as the median PE is currently 25.58x for the sector of food beverage and tobacco industry
6, and conservative as slc4me expects a PE of 35x
7.
1. Annual meeting presentation 2016, p.18
https://thea2milkcompany.com/wp-con...al-Meeting-Presentation_presentation-only.pdf
2. Half yearly results presentation 2016, p.6
https://thea2milkcompany.com/wp-content/uploads/ATM-A2M-FY16-first-half-results-presentation1.pdf
3. Annual meeting presentation 2016, p.18
4.
https://hotcopper.com.au/threads/some-musings.3154280/?post_id=21762632#.WJOj1eh97IV
5.
https://www.bloomberg.com/quote/A2M:AU
6. From nabtrade
7.
https://hotcopper.com.au/threads/some-musings.3154280/?post_id=21762632#.WJOj1eh97IV
Cheers!
(20min delay)