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As per the 30.09.2014 financial statements below factors need to be considered.
(1). Profit before tax for 06 moths ended 30.09.2014 is 1,009.2 Millions :
Means this company came as 1 Billion Profitable company with in 1st six months 2014/15. CFVF never reach this target in their history. 2014/15 financial year is not ended yet & what will be the earnings by next six month. I believe by 31.12.2014 PBT will be 1.5 Billion & by 31.03.2015 above 2.0 Billion. What are the other companies in CSE reach 1 Billion with in six month?
(2).Quarter on Quarter Profit after Tax Growth :
03 months ended 31.03.2014 = 58.5 Million (Earnings per Share 0.71)
03 months ended 30.06.2014 = 252.3 Million (Earnings per Share 2.07)
03 months ended 30.09.2014 = 678.7 Million (Earnings per Share 6.05)
(3). Year on Year Profit after Tax Growth :
F/Y 2013/14 – 12 months ended 31.03.2014 = 298.3 Million (Earnings per Share 3.17)
F/Y 2014/15 – 06 months ended 30.09.2014 = 931.0 Million (Earnings per Share 8.12) *What will be the year end EPS?
(4). Balance Sheet – Financial Investments held for trading :
As at 30.06.2014 held 16.3 Billion (Rs.16,396,986,000/-)
But, As at 30.09.2014 held 13.4 Billion (Rs.13,488,199,000/-)
Only reduced/realized 2.9 Billion. As per the report CEO mentioned
“We are pleased with our performance to date, but expect profits from the primary dealer arm to moderate in the second half of the year” – Seems to be EPS will be 18 for 2014/15.
“……our focus will be on managing risk and maintaining acceptable income levels”
“In our other businesses the Group will continue to build on the current growth momentum”
“Due to its strong capitalization, stable earnings and strengthened risk management framework, First Capital Treasuries Limited was rated ‘A-’ by Lanka Rating Agency Limited and is currently the highest rated standalone Primary Dealer appointed by Central Bank of Sri Lanka”
(5). Cash Flow :
What happen to their earnings?
Interest receipts and gains realised = Rs.1,698 Million
They settled Short term borrowings = Rs.(623) Million (As at 31.03.2014 it was 1,052.4 Mn & now 428.6 Mn)
Cash payments to employees and suppliers = Rs. (253) Million (May be good Bonus to employees/Admin cost has increased)
***(Increase) in financial investments Held for trading = Rs.(928) Million
(6). Net Assets per Share stood with 25.97 compare to previous report increase by Rs.4/-.
(7). Trailing EPS & PE :
Now, Net Profit Last 4 Quarters stood = 1,308 Million
Current Price = Rs.53/-
Trailing EPS = 13
So, Trailing PER = 53/4 = PE 4
Compare to sector This is clearly undervalued. I think this need to adjust to PE above 7 or 8. I remember in 2009/10 at the maximum point CFVF traded at PER of 9.5.
What will be the Share Price = EPS 13 X PER 9 = Rs.117/-
If you consider by next year 31.03.2015, We can assume another at least 700 Mn Profits & say assumed share Price Rs.55/- by that time, What Then Trailing EPS of 20 with Trailing PE will be 2.5. Can this happen?
What will be the end? Then, At the current level trailing PE 4 with trailing EPS 20 = Share price will be above Rs.80/-
So, I can say clearly CFVF price is massively undervalued now. I am not going to reverse my earlier target Rs.120/-. I strongly believe by 31.03.2015 CFVF price will be EPS 15 X PER 8 = Rs.120/- or above Rs.100/-.
*This is CFVF earnings year. They will have this opportunity once in 3-4 years period.
“The continueddecline in secondary market interest rates coupled with favorable macro-economic factors, especially high market liquidity and low inflation created significant trading opportunities in Government Securities”
So, chance for CFVF investors to grab their golden opportunity. CFVF players will active by next month once they fulfill their capacity. Sometimes share price will drop until 48/-. But, I think finally they will achieve my targets.
We can see, So many shares in CSE running without earnings or without reasons. Now CFVF given more than expected. Why Market players & brokers hut cannot play with billion Profit Company. This is time to think. I am sure CFVF will have mega run. Most people will exit 60 – 70 range. But I guess above is possible.
(
. Dividends :
Parent company shares hoding
1 Dunamis Capital PLC - 45,626,756
2 Seylan Bank PLC/ Dunamis Capital PLC - 25,400,000
3 Commercial Bank of Ceylon PLC/ Dunamis Capital PLC - 4,891,692
4 HSBC International Nominees Ltd- SSBT Deustche Bank AG Singapore A/C No. 1 - 2,416,310
5 Seylan Bank PLC/ Janashakthi Limited - 1,967,000
6 HSBC International Nominees Limited - UBS AG Singapore Branch (EX SBC) - 1,100,000
7 Janashakthi Insurance PLC (Shareholders) - 1,000,000
8 Commercial Bank of Ceylon PLC/ Janashakthi Limited - 300,703
Total holding by Parent company = 82,702,461 (83%)
Balance for Others = 18,547,539 (17%)
Normally their dividend yield is above 75%. Most people expecting Rs.6/- dividend for 2014/15. But I strongly believe (I don’t know, but I am sure) it is Rs.10/- for this financial year. With the expected earnings for Q3 & Q4, They will pay this next year March.(83% to holding company).
*In 2009/10 when CFVF announce EPS 17.41, paid Rs.15/- as dividend.
*So, guess the Dividend for 2014/15. I strongly belive CFVF will produce EPS 18 for 2014/15 financial year.
(9). EPS morethan 5 for the quarter :
What happen when REXP announce EPS above 5 for the quarter. Share price rocket from 60/- to now 150/- range.
Also remember earlier BFL, TAFL, HAYC when they announce good results price stood in sky. When results down, their prices automatically came down. Don’t you think this can happen to CFVF also?
So, EPS 5 for the quarter is golden opportunity to investors. Defa coming month, they will play with CFVF.
(10). 2009/10 CFVF Financials :
http://www.cse.lk/cmt/upload_report_file/698_1273145306772.pdf
Earnings per share = 17.41
Q1 EPS = 3.0
Q2 EPS = 5.0
Q3 EPS = 7.5 (Maximum reported in Q3)
Q4 EPS = 1.5
Dividend per share = Rs.15/-
Market price per share
Highest market price recorded = Rs.100.00
Lowest market price recorded = Rs.26.50
Closing market price recorded = Rs.58.00
Net assets per share = Rs.15.85
--------------------------------------------------------------------------------------------------
Finally, I am not going to reverse my targets. CFVF investors will have golden era in coming six months. Investors, Market Players & Brokers are having a reason for play with CFVF. I believe CFVF will trade above Rs.100/- by 31.03.2015.
CFVF Share Price by 31.03.2015 = EPS 15 X PER 8 = Rs.120/- ?
(1). Profit before tax for 06 moths ended 30.09.2014 is 1,009.2 Millions :
Means this company came as 1 Billion Profitable company with in 1st six months 2014/15. CFVF never reach this target in their history. 2014/15 financial year is not ended yet & what will be the earnings by next six month. I believe by 31.12.2014 PBT will be 1.5 Billion & by 31.03.2015 above 2.0 Billion. What are the other companies in CSE reach 1 Billion with in six month?
(2).Quarter on Quarter Profit after Tax Growth :
03 months ended 31.03.2014 = 58.5 Million (Earnings per Share 0.71)
03 months ended 30.06.2014 = 252.3 Million (Earnings per Share 2.07)
03 months ended 30.09.2014 = 678.7 Million (Earnings per Share 6.05)
(3). Year on Year Profit after Tax Growth :
F/Y 2013/14 – 12 months ended 31.03.2014 = 298.3 Million (Earnings per Share 3.17)
F/Y 2014/15 – 06 months ended 30.09.2014 = 931.0 Million (Earnings per Share 8.12) *What will be the year end EPS?
(4). Balance Sheet – Financial Investments held for trading :
As at 30.06.2014 held 16.3 Billion (Rs.16,396,986,000/-)
But, As at 30.09.2014 held 13.4 Billion (Rs.13,488,199,000/-)
Only reduced/realized 2.9 Billion. As per the report CEO mentioned
“We are pleased with our performance to date, but expect profits from the primary dealer arm to moderate in the second half of the year” – Seems to be EPS will be 18 for 2014/15.
“……our focus will be on managing risk and maintaining acceptable income levels”
“In our other businesses the Group will continue to build on the current growth momentum”
“Due to its strong capitalization, stable earnings and strengthened risk management framework, First Capital Treasuries Limited was rated ‘A-’ by Lanka Rating Agency Limited and is currently the highest rated standalone Primary Dealer appointed by Central Bank of Sri Lanka”
(5). Cash Flow :
What happen to their earnings?
Interest receipts and gains realised = Rs.1,698 Million
They settled Short term borrowings = Rs.(623) Million (As at 31.03.2014 it was 1,052.4 Mn & now 428.6 Mn)
Cash payments to employees and suppliers = Rs. (253) Million (May be good Bonus to employees/Admin cost has increased)
***(Increase) in financial investments Held for trading = Rs.(928) Million
(6). Net Assets per Share stood with 25.97 compare to previous report increase by Rs.4/-.
(7). Trailing EPS & PE :
Now, Net Profit Last 4 Quarters stood = 1,308 Million
Current Price = Rs.53/-
Trailing EPS = 13
So, Trailing PER = 53/4 = PE 4
Compare to sector This is clearly undervalued. I think this need to adjust to PE above 7 or 8. I remember in 2009/10 at the maximum point CFVF traded at PER of 9.5.
What will be the Share Price = EPS 13 X PER 9 = Rs.117/-
If you consider by next year 31.03.2015, We can assume another at least 700 Mn Profits & say assumed share Price Rs.55/- by that time, What Then Trailing EPS of 20 with Trailing PE will be 2.5. Can this happen?
What will be the end? Then, At the current level trailing PE 4 with trailing EPS 20 = Share price will be above Rs.80/-
So, I can say clearly CFVF price is massively undervalued now. I am not going to reverse my earlier target Rs.120/-. I strongly believe by 31.03.2015 CFVF price will be EPS 15 X PER 8 = Rs.120/- or above Rs.100/-.
*This is CFVF earnings year. They will have this opportunity once in 3-4 years period.
“The continueddecline in secondary market interest rates coupled with favorable macro-economic factors, especially high market liquidity and low inflation created significant trading opportunities in Government Securities”
So, chance for CFVF investors to grab their golden opportunity. CFVF players will active by next month once they fulfill their capacity. Sometimes share price will drop until 48/-. But, I think finally they will achieve my targets.
We can see, So many shares in CSE running without earnings or without reasons. Now CFVF given more than expected. Why Market players & brokers hut cannot play with billion Profit Company. This is time to think. I am sure CFVF will have mega run. Most people will exit 60 – 70 range. But I guess above is possible.
(
. Dividends :Parent company shares hoding
1 Dunamis Capital PLC - 45,626,756
2 Seylan Bank PLC/ Dunamis Capital PLC - 25,400,000
3 Commercial Bank of Ceylon PLC/ Dunamis Capital PLC - 4,891,692
4 HSBC International Nominees Ltd- SSBT Deustche Bank AG Singapore A/C No. 1 - 2,416,310
5 Seylan Bank PLC/ Janashakthi Limited - 1,967,000
6 HSBC International Nominees Limited - UBS AG Singapore Branch (EX SBC) - 1,100,000
7 Janashakthi Insurance PLC (Shareholders) - 1,000,000
8 Commercial Bank of Ceylon PLC/ Janashakthi Limited - 300,703
Total holding by Parent company = 82,702,461 (83%)
Balance for Others = 18,547,539 (17%)
Normally their dividend yield is above 75%. Most people expecting Rs.6/- dividend for 2014/15. But I strongly believe (I don’t know, but I am sure) it is Rs.10/- for this financial year. With the expected earnings for Q3 & Q4, They will pay this next year March.(83% to holding company).
*In 2009/10 when CFVF announce EPS 17.41, paid Rs.15/- as dividend.
*So, guess the Dividend for 2014/15. I strongly belive CFVF will produce EPS 18 for 2014/15 financial year.
(9). EPS morethan 5 for the quarter :
What happen when REXP announce EPS above 5 for the quarter. Share price rocket from 60/- to now 150/- range.
Also remember earlier BFL, TAFL, HAYC when they announce good results price stood in sky. When results down, their prices automatically came down. Don’t you think this can happen to CFVF also?
So, EPS 5 for the quarter is golden opportunity to investors. Defa coming month, they will play with CFVF.
(10). 2009/10 CFVF Financials :
http://www.cse.lk/cmt/upload_report_file/698_1273145306772.pdf
Earnings per share = 17.41
Q1 EPS = 3.0
Q2 EPS = 5.0
Q3 EPS = 7.5 (Maximum reported in Q3)
Q4 EPS = 1.5
Dividend per share = Rs.15/-
Market price per share
Highest market price recorded = Rs.100.00
Lowest market price recorded = Rs.26.50
Closing market price recorded = Rs.58.00
Net assets per share = Rs.15.85
--------------------------------------------------------------------------------------------------
Finally, I am not going to reverse my targets. CFVF investors will have golden era in coming six months. Investors, Market Players & Brokers are having a reason for play with CFVF. I believe CFVF will trade above Rs.100/- by 31.03.2015.
CFVF Share Price by 31.03.2015 = EPS 15 X PER 8 = Rs.120/- ?
well done EPS
