"Hi, I found out abt ur blog thru Remove Sabana Mgr fb grp. Thks for sharing CNY video from Gardenia. I din know abt QAF. What is ur ave price? Do u think this $1.41 is gd to enter?"
"What is my average price for QAF Limited? Is $1.41 a good entry price? Alamak! I am not a guru and I just anyhow do valuation. You have been warned. Er, I anyhow talk to myself in my blog later."
OK, I start talking to myself now.
What is my average price? I don't know. I have never bothered to find out. I could but I just don't bother. AK is lazy. Regular readers know I don't care about average prices.
I do know I have been a QAF shareholder for many years and I first bought some shares at 60+ cents a share donkey years ago because I wanted to eat free bread. Mental? Must be.
Is $1.41 a good price to enter? I don't know about price but I probably can say something about value.
|QAF 3Q 2016.|
Q1 2016 EPS was 2.9c.
(Hyperlinked. Click on above links to read quarterly announcements.)
So, for first 9 months of 2016, total EPS was 11.4c.
To put things in perspective, full year 2015 EPS was 9.4c.
So, buying more at $1.03 a share in 1H 2016 meant paying a PER of under 11x. Yes, that was the last time I bought more QAF shares.
Now, with only 9 months worth of earnings in 2016 (i.e. 11.4c a share), assuming Q4 does not turn in a loss and we have zero earnings in Q4, 11x PER would give me a price of $1.25 a share or so.
If Q4 were to turn in pretty decent earnings which I think it would, of course, based on 11x PER, the price should be higher. If Q4 turns in an EPS of 3c, I would get a price of $1.58, for example.
Now, for a dash of excitement, if I remember correctly, when Mr. Market was feeling a bit happier in the past, QAF Limited was valued at about 14x PER which would give us a share price of almost $1.60 a share based on EPS of 11.4c (i.e. with no contribution in Q4).
What if we were to add EPS from Q4? 3c EPS in Q4 maybe? That would give us $2.02 a share at 14x PER.
OK, I am beginning to talk nonsense. What? Will it happen? Alamak, don't ask me things about the future. I don't know.
I will say that getting in at $1.41 a share with the thought that share price is probably going higher in the next few weeks or months has a strong speculative flavour. There is nothing wrong with a bit of speculation, I always say, if sized properly.
Now, seriously, go read the quarterly reports for yourself and see why earnings went up as much as they did. Don't just eavesdrop.
AK is mental. Remember?
Added 7.55PM (31 Jan 17):
Bad AK! Bad AK!
Breadtalk, Old Chang Kee and QAF Limited.
Watch CNY video clip from Gardenia: HERE.