PADINI Analysis:-

Excel – http://1drv.ms/1AWoYBY

My View:-

- Fair value/Marketing Timing
  – 5Y DCF:
    – 2.51 – 2.87 (MOS: 25% – 34%)
    – The current price 1.89 assumed 3.8% growth of FCF in 5 years.
  – Absolute EY%:
    – Trailing:   
      – FY14 (EPS: 0.138) – Buy below 1.55, fair value 1.86 (MOS: -1.4%)
      – R4Q (EPS: 0.138) – Buy below 1.55, fair value 1.86 (MOS: -1.4%)
    – Forward:   
      – FY14 (EPS: 0.147) – Buy below 1.65, fair value 1.98 (MOS: 4.4%)
      – FY15 (EPS: 0.165) – Buy below 1.85, fair value 2.23 (MOS: 15.1%)
    – EPS applied to reach the current stock price (1.89): 0.14
- In my opinion, at 1.89, I think PADINI valuation is attractive due to
i) attractive dividend yield of 6%
ii) commendable top line growth backed by aggressive expansion
iii) BO stores targeting the value-for-money segment which will do well in current economic environment
iv) highly experienced management team with a strong local retail market knowledge
v) Expected to regain its Shariah compliant status in November 2014 – It had addressed the issue by reallocating a portion of its cash into Islamic instruments in order to be in compliant with the requirement of the SC’s List.
- For recent sector analysis, please read http://lcchong.files.wordpress.com/2014/03/apparels-the-busy-weekly-15032014.pdf
- Today, I bought additional shares of PADINI. I will continue to hold and accumulate whenever possible.

Latest Financial – Q4 2014 (Interim FY14) Financial Report (27 Aug 2014) http://www.bursamalaysia.com/market/listed-companies/company-announcements/1722889

At the time of writing, I did not own shares of PADINI.