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Watch MADU

+9
innam
RDS
mono
maalinda
optimistic
Meta Trader
marketsee
dhamm
Leader
13 posters

Go down  Message [Page 2 of 1]

21Watch MADU - Page 2 Empty Re: Watch MADU Tue Feb 08, 2011 3:20 pm

cse.alpha


Senior Manager - Equity Analytics
Senior Manager - Equity Analytics

From an earnings and dividends perspective, MADU surely is one of the worst performing plantation stocks - no dividends during past decade (although management fees have been charged - at reduced levels recently), and it has been bleeding heavily the past few years. It is a pure tea plantation company, with serious working capital constraints, and the impending wage hike from April 2011 will hurt it badly.

In a good period for most plantations, MADU reported a net loss of Rs98 mn for the 9m ended 30th Sept 2010, and its book value per share was Rs9

The timber revaluation, if brought into its books, will boost book value per share to around Rs83, but is book value the most useful or realistic way to evaluate a plantation company? Earnings, cash flow and dividends based methods, together with crop mix analysis, are surely more important. And remember that MADU is likely to continue to report losses during the next few quarters, which will bring down its book value continuously.

Monetising the book value of timber may also prove to be challenging and long term, and conversion of its book value into cash will hold the key.

Book value is much more important from a takeover perspective though, and perhaps DIST and Stassens, who jointly control 66% of company, may consider an exit - using the discount to book value as the key selling point. Group company SPEN recently exited from its investment in TPL incidentally.

In the meantime, the share's relatively low absolute share price and the fact that only 30,000 shares were needed to be among the largest 20 shareholders as at 30th Sept 2010 should keep the traders interested.

22Watch MADU - Page 2 Empty Re: Watch MADU Tue Feb 08, 2011 3:58 pm

salt


Vice President - Equity Analytics
Vice President - Equity Analytics

ELPL has a foresty. But, they ahve not revalued yet.

23Watch MADU - Page 2 Empty Re: Watch MADU Tue Feb 08, 2011 4:23 pm

mono


Vice President - Equity Analytics
Vice President - Equity Analytics

salt wrote:ELPL has a foresty. But, they ahve not revalued yet.

great! that's exactly what we need these days. everyone going around cutting trees.

Very Happy

P.S: salt, are u a guy or a girl

24Watch MADU - Page 2 Empty Re: Watch MADU Tue Feb 08, 2011 5:00 pm

salt


Vice President - Equity Analytics
Vice President - Equity Analytics

a boy Very Happy

I'm sorry for the previous post. It not clear whether they have revalued or not. first impression was that it's not revlaued, but when i repeat the reading , looks not clear.

However, at the end, there is segment reporting. It is mentined- segmant assets value of Oil Palm & Other crop Rs 102 mn. It is unlikely that foresty is revalued


This is extract from the MD's review
http://www.cse.lk/cmt/upload_report_file/707_1280743048066.pdf

Another valuable asset in the company is its timber and forestry base in the upcountry (UC) estates. This asset is significantly growing in value each year and will be a good cashflow provider to EPP in future years. Together with expanding tea, rubber and palm oil land, the company expects to accelerate its expansion on hydropower and commercial forestry to take the company to a stronger footing. The JV rubber wood furniture factory – Elpitiya Lifestyle Solutions (Pvt) Ltd (ELS) and the branded tea operation Harrow Ceylon Choice (HCC) has unfortunately not come upto expectations. The rising cost of rubber wood affected the cost of
the end product in ELS, which affected viability in the early years. However, with the rise in international price of rubber wood, we see this situation gradually changing with greater participation and involvement from the JV partner. We have already seen an increase in orders for rubber wood for exports at the tail end of the year.

25Watch MADU - Page 2 Empty at malinda Wed Feb 09, 2011 8:42 am

marketanalyst


Equity Analytic
Equity Analytic

no analyst would have Thought that valuation of 2.2 billion be justifiable. Now it has bcome real. Analysts who havn't figure out dis thing, seems trying to make adverse comment to cover their inability.

26Watch MADU - Page 2 Empty Re: Watch MADU Mon Feb 14, 2011 12:28 am

million


Senior Equity Analytic
Senior Equity Analytic

do you still think madu will hit 70. it seems the buying has reduced

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