Sunday, March 8, 2015

HLFinance, Petra and Super Group financial results

Hong Leong Finance

Interest on loans increased 7.7% to SGD 197 million but earnings to shareholder fell 10.4% to SGD 63 million. This is due to an increase in general provision made on its loan portfolio. 

PE ratio remains stable year-on-year at around 17-18.5 times. PB fell slightly to 0.7 times from 0.72 times in 2013. Yield has however fallen to 1.9% from about 3.0% a year ago.

The softening Singapore property market as well as the Singapore economy will weigh heavily on the future prospects of the company. While the stock is priced right, I am placing Hong Leong Finance on my watchlist of stocks to dispose.

Petra Foods

Revenue fell 0.9% to USD 504 million due largely to weaker sales in the regional markets (ex Indonesia). earnings and profit from continuing operations fell 17.8% due to the weakness of local currencies against the US dollar.

PE ratio improved to 38 times from an astronomical 87 in 2013. PB remained almost unchanged at 6.2 times. Yield fell from 2.2% to 1.9%.

The sale of its ingredients division has entered into arbitration as the buyer has sought price reductions. I like the company because it is in the basic foods segment with exposure to the Indonesian market. I will hold on to this stock until there is a big special dividend.

Super Group

Revenue fell 3% to SGD 539 million due to lower branded consumer and food ingredients sales. Profit fell by a much sharper 31% to SGD 69 million due to higher depreciation charges and higher raw material costs. 

PE ratio worsened from 19.6 times to 28.4 times but PB improved from 4.2 times to 3.9 times. Yield fell from 5.1% to 1.8% although the 1-for-1 bonus share issue should be accounted for. 

Too many challenges ahead for this stock in the form of weaker key markets and higher raw material costs. I am placing the stock on my watchlist of stocks to dispose.

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