OML has upgraded its FY08F cash earnings by ~30% to $22.7m or 12.3 cps. We have followed suit with sales upgrades to FY09 and FY10 assumptions of ~24% that essentially tracked the yoy growth forecasts previously in place. This means OML is forecasting sales of 930 ha in FY09, a more challenging forecast, but one we feel is within TFC’s reach with expectations of expanding the distribution base further and the quality of the project shining through with financial planning groups �� EPS upgrades of ~27% and ~23% in FY09 and FY10 mean that TFC is now trading on forward cash earnings multiples of <9x and <8x respectively. TFC is trading at a 23% discount to the Small Industrials with approximately double the expected earnings growth �� OML has upgraded its DCF valuation by ~18% to $2.27 based on the earnings upgrades and an upwards adjustment in land acquisition assumptions. This valuation assumes a WACC of ~17%, to allow for the forecast time frame of 20 years. This revised valuation is now at ~81% premium to market. A further upgrade is likely when we roll over our five project forecasting model to cater for an MIS project in FY13....
Sounds great, if you want the full doc (8 pages) send me email [email protected]
TFC Price at posting:
0.0¢ Sentiment: LT Buy Disclosure: Held
