GRAN & TAFL - 1Q2011 results out on cse website

GRAN & TAFL - 1Q2011 results out on cse website

GRAN - profit of Rs94 m, 1Q EPS = Rs1.6

TAFL - profit of Rs41 m, 1Q EPS = Rs1.7

Why then both are not moving up!?

@Belgrade: Please explain why, with quarterly EPS of Rs 1.60 ~ Rs 1.70, you think GRAN & TAFL should move up.

What is an appropriate PE ratio for the sector?

revenue has come down marginally & cost of sales has gone up substantially. i guess that explains everything.

i guess portfolio challenge is not going to look good for many people after this week.

GRAN http://www.cse.lk/cmt/upload_report_file/671_1305023400346.pdf
TAFL http://www.cse.lk/cmt/upload_report_file/671_1305023400346.pdf

Woah! TAFL has a huge QoQ drop 5.29 in the last quarter to 1.79
in case of GRAN QoQ has changed from 3.42 to 1.57

The whole problem with the chicken run was that last few quarter these companies had astonishing bottom line growth with out corresponding top line growth. Several people warned that it's dangerous to expect that such growth can be sustained. Such warnings were poo-poohed laughed at and massive dozes of negative reps were dished out.

It would not be a big surprise if the same trend is observed with BFL

The loss of profits are primarily because of the higher costs. the whole maize situation could be a major factor in this.
http://www.indexmundi.com/commodities/?commodity=corn&months=12

this is compounded by the flooding. I remember that around march there was an article about the government being asked to drop the tax on maize imports. that should have been the first warning sign.

This is a good lesson for the newcomers.
Lesson of the day:- Investing is easy when you buy high cap stocks, when they are going up. Insider trading is the key. Since most of us do not have that privilege, your only hope is analyzing the price and volume. The fundamental analysis alone is lagging.

PS: Just updated my virtual portfolio

We can not compare 4th quarter to 1st quarter in a year for food related stocks. 4th quarter is a festive season and demand for foods are extreamly higher. infact both GRAN and TAFL has increased revenue and profit significantly compare with 2010 1st quarter..

Revenue 2010(Q1) 2011(Q1) Growth
GRAN 1.8 b 2.2 b 26%
TAFL 240m 331m 38%

Profit 2010(Q1) 2011(Q1) Growth
GRAN 57m 94m 64%
TAFL 0.5m 41m NM

This will give you a broader view for current situation of TAFL. You can clearly see that still company in a good shape. Even for this EPS, current price level is well supporting.

Thats very bad after the world cup and tourist season.. qtr EPS of 1.7 is unacceptable for chicks ...the results would've been more than this
Qtr increases are ok compared to the same qtr previous year.. but expectations are still there for a growth in coming qtrs..
Lets see wat BFL has to say..

smallville wrote:Thats very bad after the world cup and tourist season.. qtr EPS of 1.7 is unacceptable for chicks ...the results would've been more than this
Qtr increases are ok compared to the same qtr previous year.. but expectations are still there for a growth in coming qtrs..
Lets see wat BFL has to say..

Agreed my friend....

econ wrote:We can not compare 4th quarter to 1st quarter in a year for food related stocks. 4th quarter is a festive season and demand for foods are extreamly higher. infact both GRAN and TAFL has increased revenue and profit significantly compare with 2010 1st quarter..

Revenue 2010(Q1) 2011(Q1) Growth
GRAN 1.8 b 2.2 b 26%
TAFL 240m 331m 38%

Profit 2010(Q1) 2011(Q1) Growth
GRAN 57m 94m 64%
TAFL 0.5m 41m NM

You mean people don't eat when there are no festivals? That's funny because I don't remember people saying things like that when they multiplied the december quarters EPS by 4 to come up with ridiculous forecast annual EPS figures.

Anyway from December quarter to the March quarter, TAFL revenue has dropped by only 22 million that's only about 6% on the other hand EPS has dropped by 66%

tubal wrote:

econ wrote:We can not compare 4th quarter to 1st quarter in a year for food related stocks. 4th quarter is a festive season and demand for foods are extreamly higher. infact both GRAN and TAFL has increased revenue and profit significantly compare with 2010 1st quarter..

Revenue 2010(Q1) 2011(Q1) Growth
GRAN 1.8 b 2.2 b 26%
TAFL 240m 331m 38%

Profit 2010(Q1) 2011(Q1) Growth
GRAN 57m 94m 64%
TAFL 0.5m 41m NM

You mean people don't eat when there are no festivals? That's funny because I don't remember people saying things like that when they multiplied the december quarters EPS by 4 to come up with ridiculous forecast annual EPS figures.

Anyway from December quarter to the March quarter, TAFL revenue has dropped by only 22 million that's only about 6% on the other hand EPS has dropped by 66%

you know that in Sri Lanka festive season are filled with many people in the streat. usually food,appreal companies are having most profits in the April and December quarters.
any way that 22 million reduction of income can be represented for festive season. EPS down because supply side impacts such as weather and government imports of chicken.
government imported chiken on end of december but it has arrived after the december festive season. it has created over supply of chickent stocks. but government has stopped imports of chicken after that. so we can get a clear picture of tafl profit in next (Apr-june) quarter.

econ wrote:

tubal wrote:

econ wrote:We can not compare 4th quarter to 1st quarter in a year for food related stocks. 4th quarter is a festive season and demand for foods are extreamly higher. infact both GRAN and TAFL has increased revenue and profit significantly compare with 2010 1st quarter..

Revenue 2010(Q1) 2011(Q1) Growth
GRAN 1.8 b 2.2 b 26%
TAFL 240m 331m 38%

Profit 2010(Q1) 2011(Q1) Growth
GRAN 57m 94m 64%
TAFL 0.5m 41m NM

You mean people don't eat when there are no festivals? That's funny because I don't remember people saying things like that when they multiplied the december quarters EPS by 4 to come up with ridiculous forecast annual EPS figures.

Anyway from December quarter to the March quarter, TAFL revenue has dropped by only 22 million that's only about 6% on the other hand EPS has dropped by 66%

you know that in Sri Lanka festive season are filled with many people in the streat. usually food,appreal companies are having most profits in the April and December quarters.
any way that 22 million reduction of income can be represented for festive season. EPS down because supply side impacts such as weather and government imports of chicken.
government imported chiken on end of december but it has arrived after the december festive season. it has created over supply of chickent stocks. but government has stopped imports of chicken after that. so we can get a clear picture of tafl profit in next (Apr-june) quarter.

We said those things will happen but you and others said they will not happen. So why are you using these arguments to defend the poor result?

For an example about how people were annualizing EPS by multiplying by 4 : see this google cached link to a forum page: (for example : http://www.google.lk/url?sa=t&source=web&cd=1&ved=0CBsQIDAA&url=http%3A%2F%2Fwebcache.googleusercontent.com%2Fsearch%3Fq%3Dcache%3ARSf87GGSZucJ%3Aforum.srilankaequity.com%2Ft131-still-chance-for-bfl-tafl-and-gran%2Bhttp%3A%2F%2Fforum.srilankaequity.com%2Ft131-still-chance-for-bfl-tafl-and-gran%26cd%3D1%26hl%3Den%26ct%3Dclnk%26gl%3Dlk%26source%3Dwww.google.lk&ei=cDjJTa6iPMu38QP2lJXVBg&usg=AFQjCNGnZ9ezvX7WqNhXRkP0u-QMPt7QEQ )

Argument seems to be heating up between Pro-Chicks and Anti-Chicks..

Keep up your good work guys..

if people were expecting an eps of 1.75 for GRAN this quarter this share should be closer to 100. not very many people were expecting such a low EPS for the quarter except for the people who were dumping en masse at the 200 & 170 levels. that much is pretty obvious.

My guess is that the higher cost is primarily because of the steeping price of Maize and that doesn't seem to be slowing down. so unless these guys grow their maize they're not going to make stellar profits anytime soon.

Which brings us to BFL, which hasn't released their report yet. BFL might fare much better than these two because they get a portion of their maize from their own farms. But i don't know the extent to which the floods effected their farms. So those of you who have BFL in their portfolio should try and figure out asap what the maize situation was like for BFL. even more so than GRAN & TAFL, BFL is highly volatile. when things start going down hill it will go down hill fast. but one thing though. BFL hasn't been crashing like GRAN so thier news might be better.

tubal wrote:

econ wrote:

tubal wrote:

econ wrote:We can not compare 4th quarter to 1st quarter in a year for food related stocks. 4th quarter is a festive season and demand for foods are extreamly higher. infact both GRAN and TAFL has increased revenue and profit significantly compare with 2010 1st quarter..

Revenue 2010(Q1) 2011(Q1) Growth
GRAN 1.8 b 2.2 b 26%
TAFL 240m 331m 38%

Profit 2010(Q1) 2011(Q1) Growth
GRAN 57m 94m 64%
TAFL 0.5m 41m NM

You mean people don't eat when there are no festivals? That's funny because I don't remember people saying things like that when they multiplied the december quarters EPS by 4 to come up with ridiculous forecast annual EPS figures.

Anyway from December quarter to the March quarter, TAFL revenue has dropped by only 22 million that's only about 6% on the other hand EPS has dropped by 66%

you know that in Sri Lanka festive season are filled with many people in the streat. usually food,appreal companies are having most profits in the April and December quarters.
any way that 22 million reduction of income can be represented for festive season. EPS down because supply side impacts such as weather and government imports of chicken.
government imported chiken on end of december but it has arrived after the december festive season. it has created over supply of chickent stocks. but government has stopped imports of chicken after that. so we can get a clear picture of tafl profit in next (Apr-june) quarter.

We said those things will happen but you and others said they will not happen. So why are you saying they will happen now?

For an example about how people were annualizing EPS by multiplying by 4 : see this google cached link to a forum page: (for example : http://www.google.lk/url?sa=t&source=web&cd=1&ved=0CBsQIDAA&url=http%3A%2F%2Fwebcache.googleusercontent.com%2Fsearch%3Fq%3Dcache%3ARSf87GGSZucJ%3Aforum.srilankaequity.com%2Ft131-still-chance-for-bfl-tafl-and-gran%2Bhttp%3A%2F%2Fforum.srilankaequity.com%2Ft131-still-chance-for-bfl-tafl-and-gran%26cd%3D1%26hl%3Den%26ct%3Dclnk%26gl%3Dlk%26source%3Dwww.google.lk&ei=cDjJTa6iPMu38QP2lJXVBg&usg=AFQjCNGnZ9ezvX7WqNhXRkP0u-QMPt7QEQ )

by the way I have not said anything about supply side constraints. I only said that demand for poultry increase with next few years.Because I belive per capita income will increase next few years and therefore the chicken consumption will also increase.
I still say that demand for poultry will increase with next few years. there may be short term volatility based on weather and other policy issues. that can happen for any compnay in food/agriculture industry. no argument of that for instance poultry sector was really affected by bird flu in two years ago.

And anyway reports are leaked before the annoucments as usuall thats why prices of poultry has down considerably in last few weeks to match up with current reports.

For those who are clinging on steadfastly to yesterday's winners, there's a word for this: 'Rationalizing'.

People anyway believe what they want to. They find it convenient to cling on to arguements that support their point of view and disregard those that don't; that's a human tendency. Guard against such emotional traps. What if the other guy is right?

Remember: The human mind is like a parachute; it works best when it is open!

Antonym wrote:For those who are clinging on steadfastly to yesterday's winners, there's a word for this: 'Rationalizing'.

People anyway believe what they want to. They find it convenient to cling on to arguements that support their point of view and disregard those that don't; that's a human tendency. Guard against such emotional traps. What if the other guy is right?

Remember: The human mind is like a parachute; it works best when it is open!

Good statement, we've been hoping high for chicks and when it has shown us the not so promising results only thing we could go for is stick into our expectations or turn away and move to some thing else.. When we look for a greater scope in time for the chickens to come up good, the short term falls could be tolerated but in general it hurts to see the shares going down day by day..

I think its time to move on to some future winners..
Also if you can hold on to another 2 qtrs atleast to see the direction, I think chicks can even show some good profits..

As some one calculated before GRAN forward yearly earnings = 1.57*4 = 6.28!
Current PE ratio = 145.50/6.28 = 23.18
According to some one when first run take it past 300 PE ratio = Over 50!

econ wrote:We can not compare 4th quarter to 1st quarter in a year for food related stocks. 4th quarter is a festive season and demand for foods are extreamly higher. infact both GRAN and TAFL has increased revenue and profit significantly compare with 2010 1st quarter..

Revenue 2010(Q1) 2011(Q1) Growth
GRAN 1.8 b 2.2 b 26%
TAFL 240m 331m 38%

Profit 2010(Q1) 2011(Q1) Growth
GRAN 57m 94m 64%
TAFL 0.5m 41m NM

Are you not the guy who forcasted EPS of Rs 4 for this quarter and annualized it to Rs 16 EPS for year! Then ou went on to multiply it by PE ratios of over 20 if I remember just a day or 2 ago!

Ps:- Reguarding http://webcache.googleusercontent.com/search?q=cache:RSf87GGSZucJ:forum.srilankaequity.com/t131-still-chance-for-bfl-tafl-and-gran+http://forum.srilankaequity.com/t131-still-chance-for-bfl-tafl-and-gran&cd=1&hl=en&ct=clnk&gl=lk&source=www.google.lk
Nice to know I actually cared those days to explain so humbly to people who are too stubborn to learn!

Antonym wrote:For those who are clinging on steadfastly to yesterday's winners, there's a word for this: 'Rationalizing'.

People anyway believe what they want to. They find it convenient to cling on to arguements that support their point of view and disregard those that don't; that's a human tendency. Guard against such emotional traps. What if the other guy is right?

Remember: The human mind is like a parachute; it works best when it is open!

+ from me what you said.
It is extremely funny to see pessimistic and optimistic view of the people and try to defend their views. Some people have extreme pessimism of the market - Taking lot about manipulation of the market. But missing good opportunities. Others are so optimistic putting so many facts and figures to prove their views. I think to be successful trader person have to undone all those external biases and analyses what you own.

Rajitha wrote:

econ wrote:We can not compare 4th quarter to 1st quarter in a year for food related stocks. 4th quarter is a festive season and demand for foods are extreamly higher. infact both GRAN and TAFL has increased revenue and profit significantly compare with 2010 1st quarter..

Revenue 2010(Q1) 2011(Q1) Growth
GRAN 1.8 b 2.2 b 26%
TAFL 240m 331m 38%

Profit 2010(Q1) 2011(Q1) Growth
GRAN 57m 94m 64%
TAFL 0.5m 41m NM

Are you not the guy who forcasted EPS of Rs 4 for this quarter and annualized it to Rs 16 EPS for year! Then ou went on to multiply it by PE ratios of over 20 if I remember just a day or 2 ago!

Ps:- Reguarding http://webcache.googleusercontent.com/search?q=cache:RSf87GGSZucJ:forum.srilankaequity.com/t131-still-chance-for-bfl-tafl-and-gran+http://forum.srilankaequity.com/t131-still-chance-for-bfl-tafl-and-gran&cd=1&hl=en&ct=clnk&gl=lk&source=www.google.lk
Nice to know I actually cared those days to explain so humbly to people who are too stubborn to learn!

Rajitha> I have never said in this quarter they will report 4 EPS. I said it can report around 4 EPS in next few quarters assming increased demand for poultry products. I have always talked about the long term value of poultry sector. but in this quarter poultry sector seem to affect by high maize price and government imports of chicks from india which I belive are short term effects.

Perpetual (Perpetual Capital and Perpetual Assest Management) has sold more than 2.5 Mn shares of GRAN

As at 30th Dec 2010 - 5.59%
As at 31st March 2011 - 1.67%

I expect the share price of GRAN to stagnate for few qurarters till better eps show.