03-03-2012, 03:03 PM
(03-03-2012, 01:25 PM)valuehunter Wrote: Perhaps an important question to ask is whether the share price is still undervalued, bearing in mind the underlying business is still poised to grow further and that the coffee drinking culture in china is still not fully fledged yet.
Based on Viz Branz's last done (2Mar12) share price of $0.365 and latest 355.0m outstanding issued shares, market cap. now stands at $129.6m. When I compare this number against Viz Branz's current annual revenue of aprox. $182.4m (2x of 1H-FY11's $91.175m) and NP of approx. $18.6m (2x of 1H-FY11's $9.275m), I feel this is still quite an acute under-pricing situation by Mr Market. The derived current-year PER of approx. 7x is simply still too low for an established FMCG business which is growing its revenue steadily at a rate of approx. 10%p.a. and its NP at an even faster rate. IMHO, a current-year PER of 10x appears more appropriate.
A comparison with Super Group or other companies engaged in similar lines of business may throw out some useful pointers on my above guess.