Felicia Sharing
Top Glove (TOPGLOV): How To Play The 4Q Result?
FeliciaWong
Publish date: Wed, 16 Sep 2020, 06:12 PM
1. Sifu told me to watchout for tomorrow 4Q result for Top Glove.
2. He said anything below RM700m is bad for share price - it should decline to below RM7.50 if this happen
3. But if it increase above RM800m - share price should increase above RM8.60
The value of a company depends on the profit that it makes.
He gave me this whole table to refer to.
| 4Q profit in RM million | Annualized | PE | Market Cap | No Of Shares | TP |
| 400 | 1600 | 22 | 35200 | 8170 | 4.31 |
| 500 | 2000 | 22 | 44000 | 8170 | 5.39 |
| 600 | 2400 | 22 | 52800 | 8170 | 6.46 |
| 700 | 2800 | 22 | 61600 | 8170 | 7.54 |
| 800 | 3200 | 22 | 70400 | 8170 | 8.62 |
| 900 | 3600 | 22 | 79200 | 8170 | 9.69 |
| 1000 | 4000 | 22 | 88000 | 8170 | 10.77 |
| 1100 | 4400 | 22 | 96800 | 8170 | 11.85 |
Currently the market price is telling everyone that the number should be between RM700m to RM800m profit.
This is because the share price of RM8.43 falls within the range of RM7.54 to RM8.62.
So anything below RM700m means share price will drop a lot by more than 10%.
So anything above RM800m means share price will increase a lot by more than 10%.
Why 22x PE? Because average 10 years earnings growth is minimum 22%. Especially this year it can easily achieve 100% and next year another 100% so 22% in 10 years can achieve.
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Discussions
4 people like this. Showing 12 of 12 comments
The table looks familiar.
Your uncle copied the format from DaMaCai winning prize?
2020-09-16 22:23
how about RM1.5 billion profit? doesn't seem like you have considered this. also lets bet that it will not limit up even if it reports RM1.5 billion profit or more. Judging by your valuation, it should limit up today...
2020-09-17 07:22
Eh, if i would do it.....maybe
NPV = Sum of net profits = NP 2020 + NP 2021 adjusted + NP 2022 adjusted + ....
to do it properly, maybe 3 stages better. Pandemic stage (ASP USD100++), normal grow stage (yearly 10% growth stage) and terminal stage (5% growth, beyond 2040 maybe)
NPV (roughly) = 2b (F20) + 8b(F21)/1.04 + 8b (F22)/(1.04)sq + 1.5b sqsq (F23-40)/(1.04)sqsqsq + terminal value.
NPV = 100.47b (roughly)
say rate of return is 4%.
2020-09-17 10:00
my rookie tip: minus RM2 for all legit-looking TP for the most conservative TP for personal calibration.
2020-09-17 11:13
cincaila, lets make a good joke here. so if we use macquarie's TP of RM5.40, it will be RM5.40 - RM2 = RM3.40. and then let say there's dividends of RM3 in the next 2 years, then TP ex-dividends will be 40sen. haha
2020-09-17 11:23
market is emotional thats why its unpredictable...ur calculation makes sense but not in share market..haha
2020-09-17 16:28
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i was hoping the share price to POP at RM12 noon time tomorrow !!! :D
2020-09-16 21:19