Company Analysis Pt 1

I thought I'll share my my analysis of one locally listed company in this post. For the purpose of objectivity, I shall leave out the name of the company until the end of the analysis.

This company is in the retail and property business.

Revenue

• Majority of Revenue derived from Retail business. Retail revenue dropped in FY2010 (Mar 2009- Mar 2010) possibly due to financial crisis. This revenue stream might further come under pressure due to popularity of e-commerce
• Property revenue is growing even during the financial crisis in 2008-2009 and 2011

d    Gross Profit

• Due to the lower Gross Profit Margin (GPM), Retail makes up about 18% of the Gross Profit despite contributing close to 66% of total Revenue in latest FY

Earnings

• Exceptional items include disposal of assets and revaluation of existing properties
• In FY2006, there is a one-off disposal of interest in associated company,  together with its properties revaluation, amounts to $102 million 
• In FY2009, a drop in valuation of $44.6 million of its properties’ value led to a drop in EBT. In FY2010, its properties’ value increased by around $50 million
• In FY2014, the disposal of a freehold building increased Earnings by  $29 million, and its properties valuation also increased by another $20 million 
• Stripping off disposal gains and earnings from properties revaluation, EBT has an average of about $75 million over the past 10 years.