KLSE (MYR): AWANTEC (5204)
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sosfinance
1,305 posts
Posted by sosfinance > 2014-04-03 12:52 | Report Abuse
Someone need to come up with a study the following stocks which has very attractive average ROE of 40%, which seldom comes by, Preshld, Inari and DSonic. That means, say they don't pay dividend, every dollar earned, they will produce another 40%.
Assume opening of year 1 its Shareholders' fund is RM100k, and it makes 40k, by year end, its SF is RM140m. Yr 2, it continue to have ROE of 40%, meaning it will make about RM56m, to become RM196m by end of Yr 2, and Y3, it will make RM78m and shareholders's fund will be RM272m. That is a compounding rate of 40% p.a.
A compounding growth of 40% for 3 years, is equivalent to about a CAGR of 10% for 10 years. The question is that can these 3 stocks do 40% CAGR for next 3 years? DSonic FYE profit is RM82m, RHB forecast in 2015 is RM110m, CAGR 2 years of 14%. Using Benjamin formula, the
Dsonic FV is about RM4.40 (assuming 14% p.a. growth from RM82m for next 10 years).
Presbhd = RM7.00 and
Inari = RM4.40 [ all using assumption of 14% CAGR for next 10 years]