Research and Analytics
Research and Analytics
Dangote Sugar Refinery PLC (DANGSUGAR) recently released its H1-22 financial performance, showing top line and bottom line growth of 40.5% y/y and 60.6% y/y, respectively. In this report, one of our trainees at the GA Academy 2.0 analysed the company’s financial performance and update our outlook for the rest of the year.
It is important that you see yourself as a company with a structure from earning money, to saving it, to budgeting for expenses and then investing. There should be room for liquidity first. The first step of creating an emergency fund is to try to estimate what your monthly expenses are. Your yearly rent should be factored too, divided into 12 and added to that estimated monthly expense, if you want to go overboard, you can assume you would be leaving the current place you stay in and add expenses for an agent fee or other house expenses associated with getting a new place. Divide this by twelve too and add it to the initially estimated expense.
We value Seplat at #1,706 per share, representing a 21% upside from its current selling price of #1,430, hence, we issue a BUY recommendation.
Our valuation is based on three methodologies which include;
Discounted Cash Flow, Exit Ebitda Multiple and Dividend Discounted Model.
We arrived at a target price of N24.6 per share on Transcorp hotel PLC based on a mix of two valuations metrics- the DCF model with an intrinsic share value of N27, and the DDM with an intrinsic share value of N22. We attributed a weight of 60% and 40% to each methodology, respectively, to arrive at our target price.
The global economy is off to a rough start in 2022, with the Russia-Ukraine conflict, China’s lockdown,
supply chain chaos, decades-high inflation, soaring oil prices, and increased global market uncertainty all
playing a role. This year has seen billions of dollars wiped off NVIDIA’s market capitalization, just like
other tech giants (down 48 percent YTD). Is NVIDIA well-equipped to weather the current bear market?
NETFLIX started the year on a rough note as the platform reportedly lost 200k subscribers in Q1-22, the first time in over a decade. The streaming giant is also expected to lose 2 million more subscribers in the second quarter of 2022. Can NETFLIX make a rebound from this trajectory? How will NETFLIX fare during the post-lockdown era?
All forecasted indices highlighted on Dangote Cement Plc. pointed towards growth as it had been since its commencement of business. Though the major risk the company is exposed to are exchange rate fluctuations and interest rates which are beyond the control of the company, a BUY is highly recommended for Dangote Cement Plc. as it has been indicated and believed that the company will continue to grow into the foreseeable future. Our blended target price of N312/share points to a 13% upside compared to the last closing price of N277/share (7th June 2022).
We issue a sell recommendation on BUA Cement PLC(BUACEMENT.NSE) Based on a target price of ₦58.6k representing a 13% downside on the closing price of ₦70.75 as of march 30th, 2022. Our valuation is based on a methodology mix of Discounted cash flow model (70%), Dividend discount model (10%) and Multiples valuation (20%).
Flour Mill of Nigeria Plc is one of the leading FMCG and a top market player in the flour-based product market. It is the first company to have constructed Nigeria’s first
wheat mill plant. With 60 years of success celebration, the firm has been able to diversify its core business of food through backward integration into other three revenue-generating segments which include Agro-allied, Sugar, and support services. Growth in these three classes of revenue has been impressive at a CAGR of 23.58%
over the past five years. These three segments reported total revenue of N293 billion (or 38.01% of total revenue) in FY-2021 compared to the N102 billion (or 19.4% of
total revenue) in FY-2017. The firm’s ability to expand its portfolio size with an explosive growth of this 23.58% CAGR validates its capacity to provide long-term value creation to shareholders while pursuing a de-risk business opportunity.
The valuation was estimated given a WACC of 16% in line with a cheap cost of debt in Nigeria and a perpetuity growth rate of 8%. Besides, the NOPAT doubled within the past five years and is expected to grow by over 50% within the next five years. Accordingly, a weighted average as shown in appendix 4 gives us our target price valuation of N352 per share for DANGCEM.
