KINDLY REFER TO THE LAST PAGE OF THIS PUBLICATION FOR IMPORTANT DISCLOSURES
22 April 2015 | Initiate Coverage
PPB Group Bhd Initiate NEUTRAL
A giant in the consumer staple space Target Price (TP): RM15.30 INVESTMENT HIGHLIGHTS
• A Syariah-compliant ‘consumer products’ company and a
constituent of FTSE Bursa Malaysia 30
• Wide range of business segments with strategic fit to obtain
synergistic benefits
• Sizeable exposure to the agribusiness through 18.3% stake
in Wilmar, Asia’s leading agribusiness group
• We are initiating coverage on PPB with a NEUTRAL
recommendation, attaching a fair value of RM15.30 based
on sum-of-parts valuation methodology
One of the leading ‘consumer products’ company under FBM30.
PPB Group Bhd (PPB) has an array of core businesses under ‘consumer
products’ category. On the local bourse, it is listed as one of the 30
constituent companies of the FBMKLCI. Among PPB’s key business
segments are: i) Flour and feed milling, and grains trading; ii)
Marketing, distribution and manufacturing of consumer products; iii)
Film exhibition and distribution; iv) Environmental engineering, waste
management and utilities; v) Property investment and development; and
vi) Chemicals livestock, investments and other operations.
Synergistic business structure. PPB’s integrated business model
revolves mainly around the consumer product segments. This strategy
enables the company’s core business segments to complement each
other, thus, creating synergistic benefits. Among the benefits of having
such structure are economies of scale and marketing and distribution
advantages. However, any hiccup in one of segments might affect the
wellbeing of other segments and the group as a whole.
Sizeable exposure to Wilmar. Besides the six core businesses, PPB
also involved in agribusiness via its associate, Wilmar International
Limited (Wilmar). The exposure to Wilmar further strengthens their
presence in the food and agribusiness. However, its shareholding in
Wilmar would also heighten PPB exposure to the volatilities in
commodity price movements as well as foreign exchange rate, in
particular the US Dollar. On average, contribution from PPB made up
more than 70% to PPB’s pretax profit (PBT).
Initiate with NEUTRAL recommendation. We are initiating
coverage of PPB with a Neutral recommendation. We value PPB with a
target price of RM15.30 per share based on sum-of-part valuation
methodology. Our target price translates into an implied FY16 forward
PER of 16.5x based on FY16 forecasted EPS of 92.7sen.
RETURN STATS
Price (20 April 2015) RM15.80
Target Price RM15.30
Expected Share Price
Return -3.16%
Expected Dividend Yield +1.90%
Expected Total
Return -1.26%
STOCK INFO
KLCI 1,862.80
Bursa / Bloomberg 4065 / PEP MK
Board / Sector
Main/
Consumer
Products
Syariah Compliant Yes
Issued shares (mil) 1,185.50
Par Value (RM) 2.00
Market cap. (RM’m) 18,944.3
Price over NA (x) 1.13
52-wk price Range RM13.42 –
RM16.52
3-mth Avg Daily Vol (m) 0.35
3-mth Avg Daily Value RM5.24m
Major Shareholders (%)
Kuok Brothers S/B 50.81
EPF 7.64
Nai Seng S/B 4.16
KWAP 3.00
MIDF EQUITY BEAT Wednesday, 22 April 2015
2
COMPANY BACKGROUND
One of the leading ‘consumer products’ company. As one of the top ‘consumer products’ companies in
Malaysia, PPB Group Berhad (PPB) manufactures and distributes wide range of fast-moving consumer goods (FMCG)
products under its own brand names as well as other local and international brands. Being a conglomerate, PPB is
also actively involved in grains trading, flour and animal feed milling together with a host of other downstream
activities such as livestock farming, food processing, bakery and marketing and distribution of consumer products.
Besides food manufacturing, the company owns Golden Screen Cinemas Sdn Bhd which involves in the entertainment
business. It has also successfully diversified into environmental engineering and waste management, contract
manufacturing, chemicals manufacturing, property development and management as well as packaging operations.
Main Business Segments
i. Flour & Feed Milling, & Grains Trading
PPB is involved in the flour milling business through its 80%-owned subsidiary FFM Bhd. FFM is currently the largest
flour miller in Malaysia which owned five flour mills with a combined milling capacity of 2,550-mt per day. Apart from
this, FFM also has milling factories across South East Asia, some of which is through its business associates. On
aggregate, FFM has access to milling capacity of more than 20,150-mt per day.
Table 1: Group milling capacities
Subsidiary / associate Milling capacity (mt per day) Location
80%-subsidiary FFM Bhd 2,250 Malaysia
80%-subsidiary FFM Bhd 550 Vietnam
80%-subsidiary FFM Bhd 2,000 Indonesia
43.4%-associate Kerry Flour Mills Ltd 400 Thailand
20% interest in nine associates in China 14,950 China
Total 20,150
Source: Company, MIDFR
FFM is also one of the leading feed millers in Malaysia. It has a combined feed milling capacity of 1,500-mt per day.
The group marketed its feed product unders the “Friendship” brand, bearing the logo of five rings. FFM’s feed is
available in form of mash, crumble and pellets. All in, the segment contributed approximately 61% and 57% of PPB’s
revenue and total segment profits in 2014.
ii. Marketing, Distribution & Manufacturing of Consumer Products
FFM Marketing Sdn Bhd (FMSB) was initially set up to market and to distribute consumer goods produced by the FFM
Group. Over the course of more than 20 years, it has established a strong distribution network for its own brand as
well as a healthy mix of other international and local brands. At present, it has 12 warehouses located across
Peninsular and East Malaysia boasting a total warehousing capacity of 300,000 sqft.
PPB also has a 38.5% effective stake in Products Manufacturing Sdn Bhd (PMSB) who provides contract-
manufacturing services for the cosmetic, toiletry and household product industries. One of its noteworthy customers
includes the Diversey Group. PMSB produces an assortment of products such as creams, cold and hot mix liquids,
lotions, gels, powders and pastes for the hair care, skin care, baby care, body care and household care items.
MIDF EQUITY BEAT Wednesday, 22 April 2015
3
Table 2: Product portfolio
Own brands/products External agency product portfolio
Brand Product description Brand Product description
Anchor Packaged flour Johnson & Johnson Baby care / personal care
Blue Key Packaged flour Clorox Liquid bleach
Muhibah Packaged flour (East Malaysia) Bluebell Household care and floor care
Masimo Loaves and buns Glads Wraps and bags
Blue Team Shortening and margarine Jordan AS Toothbrushes & oral care
products
Neptune Blended cooking oil Blacktop Insecticide / mosquito coils
Seri Murni Palm-based cooking oil Softex Personal care products (East
Malaysia)
Krystal Corn oil / sunflower oil / canola
oil Star Brand
Culinary flavouring and
colouring
Marina Canned foods Lingham Chilli sauces
Marina Frozen foods V-soy / Vita Milk Soyabean milk
Seri Murni Standard eggs Orang Kampung Herbal energy drink
Shamu Canned fruits S&P Herbal soup spices, coconut
milk, cream powder and ketupat
Snow Brand Milk powder and vegetable oil
spread
Eversweett 3-in-1 Beverages / natural sweetener
Kart Food Frozen food
Source: Company, MIDFR
iii. Film Exhibition & Distribution
To better serve the consumer market, PPB diversifies further its business into cinema exhibitor and distributor. It is
the sole owner of the Golden Screen Cinemas (GSC) chain in Malaysia. GSC operates the largest cinema chain in the
country boasting 284 screens in 31 locations across Peninsular and East Malaysia. PPB also extends its reach into the
Vietnam market through its 25%-associate, Galaxy Studio Joint Stock Company which operates 18 screens in 4
locations in Vietnam.
Besides operating cinemas in Malaysia and Vietnam, GSC also acquires and distributes film to cinemas and sub-
licences movie content to video, television (Pay TV and Free TV) and hotel operators. Aside from movies, GSC halls
also cater for events such as gala premieres, press conferences, product launches and seminars. GSC cinemas provide
comfortable seating with facilities such as wide screen projection, Digital and LCD projector for full audio-visual
presentation for event organizers.
Table 3: GSC cinema experiences
D- Box GSC MAXX Gold Class THX
Dolby Atmos GSC Lite Premiere Class Twin Seats
GSC Signature Glitters Digital Halls
Source: GSC’ website, MIDFR
MIDF EQUITY BEAT Wednesday, 22 April 2015
4
iv. Environmental Engineering, Waste management & Utilities
Another contributor to PPB’s revenue and earnings is the environmental engineering and waste management
segment. The division which operates by CWM Group Sdn Bhd provides innovative solutions, advance technologies
and professional management in the water, sewage, solid waste and drainage industries. CWM Group’s track record
comprises of more than 100 water, sewage and drainage projects with a combined contract value in excess of RM1b.
The Group also provides solid waste collection as well as disposal services for the industrial and commercial sectors in
the Central Region of Peninsular Malaysia. With its established track record, CWM group has been successful in
securing the tenders of sewage infrastructure projects under the Greater KL Scheme premised on the design and
build concept.
v. Property Investment & Development
PPB’s earnings are also supported by the contribution from its Property Investment and Development arms. Currently,
PPB Group owns and manages four retail/commercial properties namely; (i) New World Park, (ii) The Whiteaways
Arcade – both in GeorgeTown, Penang, (iii) Cheras LeisureMall and (iv) an office building, Cheras Plaza in Taman
Segar, Kuala Lumpur. To expand its property business, PPB acquired an effective 28% interest in Southern Marina
Development Sdn Bhd (SM) in 2013. The latter has acquired about 12.5 acres of land in Puteri Harbour, Nusajaya,
Iskandar Malaysia for the proposed development of a mixed residential – commercial property project. Under its
wholly-owned subsidiary, PPB Hartabina Sdn Bhd, PPB also received the Developmet Order for 14 high-end bungalows
at Taman Tanah Aman in Seberang Prai.
Figure 1: Artist impression of Southern Marina
Source: Online website
vi. Chemicals, Livestock, Investments & Others
Another core business segment of PPB is the combined business of chemicals trading & manufacturing, livestock
farming, bakery and others. The chemicals manufacturing activities is operated by 55%-owned Chemquest Group. It
is involved in the trading, distributing and manufacturing of chemicals. The trading division imports and distributes a
wide range of chemicals, petroleum solvents, refrigerated gases and filter aids from principals in the United States
and Europe. Meanwhile, the Malaysian Adhesives & Chemicals Sdn Bhd (MAC) – a subsidiary of Chemquest,
manufactures chemical intermediate for a range of industries. The products of the chemicals business are marketed to
domestic wood-based industries for use in the production of plywood, medium-density fibreboards and particleboards.
MIDF EQUITY BEAT Wednesday, 22 April 2015
5
Another division under this category is the livestock farming. This business complements PPB’s animal feed milling
and grains trading operations. It operates a table-egg layer farm and two broiler-breeder farms. The breeder farms
are located in Sua Betong, Negari Sembilan and Gurun, Kedah. The combined production capacity of the farms is
3.25m broiler chicks a month. For the layer farm, the production capacity is 20m eggs, which then marketed as ‘Seri
Murni Fresh Eggs’. Due to its complementary business functions, the management intends to reclassify this division
under the “Flour & Feed Milling, & Grains Trading”.
As for the bakery business, the contribution by this division to the group’s total segment profit is very small, circa 1%.
Bakery business is operates by The Italian Baker Sdn Bhd (TIB), a wholly-owned subsidiary of FFM Berhad. Currently,
it has two production lines comprising a 10,000 loaves-per-hour bread line and a 24,000 roll-per-hour roll line. Among
TIB’s products are Massimo Sandwich loaf with Wheat Germ, Massimo White Sandwich loaf, Massimo Favourite Cream
Roll and few others.
ASSOCIATE – WILMAR INTERNATIONAL LIMITED
Single largest shareholder of Wilmar at 18.3%. Through a series of M&A exercises, PPB currently is the single
largest shareholder of Wilmar. Wilmar is one of Asia's largest integrated agribusiness groups with operations in more
than 20 countries across the globe and has over 450 manufacturing plants. Wilmar has an extensive distribution
network for its products, which are sold in more than 50 countries globally.
Entry into Wilmar. In 2007, the PPB Group merged its oil palm plantation and edible oils trading and refining
businesses with Wilmar International Limited (Wilmar) in exchange for shares in Wilmar. As one of Asia's largest
integrated agribusiness groups with worldwide operations, Wilmar's business activities include oil palm cultivation,
oilseeds crushing, edible oils refining, sugar milling and refining, specialty fats, oleochemicals, biodiesel and fertilisers
manufacturing, and grains processing. PPB is presently the largest shareholder in Wilmar with an equity interest of
18.3%. Despite being an associate company, Wilmar’s contribution to PPB Group is significant. For the past five years,
Wilmar contributed more than 70% to PPB’s PBT. This indirectly exposes PPB’s earnings to the volatility in agricultural
commodity prices such as palm oil and soybean.
KEY ATTRIBUTES
Synergistic structure. The conglomerate structure enables PPB to create synergy from the integration of its various
core activities, i.e. flour milling to animal feed milling to livestock and food business to movie business. The structure
also allows PPB to gain a better control over the value chain and enable them to control costs throughout the
distribution process. This consequently helps PPB to improve efficiency and maintain the quality of their products.
Stable earnings growth… Apart from the operational improvement, the conglomerate structure also provide stable
earnings stream to the Group as the downside risk of one business can be counterbalanced by other businesses. The
earnings stability will also be supported by the involvement of the company in food businesses, personal care and
household item. The performance of consumer products companies is generally less sensitive to changes in the
economy and tends to be resistant to economic downturns. Excluding the gain and loss arising from the corporate
exercises, PPB has recorded consistent earnings stream of more than RM800m over the past 5 years. This is
comparable to Kuala Lumpur Kepong, its peer in the FBM KLCI 30, which has a market cap of RM24.2b.
MIDF EQUITY BEAT Wednesday, 22 April 2015
6
Source: Company, Bloomberg, MIDFR
KEY RISKS
…but indirectly exposed to the volatility in commodity prices. However, its bottom line might be affected by
the fluctuation of Wilmar’s earnings. As Asia’s leading agribusiness company, Wilmar’s earnings are susceptible to
price fluctuations in the commodities markets. The
ownership of Wimar’s shares has indirectly influence
the financial performance of PPB. For the past five
years, Wilmar has contributed about 70-80% to PPB’s
PBT.
Exposure to FOREX movements. Besides the
volatility of the commodities market, PPB is also highly
exposed to the variation in foreign exchange rate – the
translation effect on the consolidation of Wilmar’s
earnings (in USD) to PPB’s accounts. This situation has
not only affected PPB’s bottom-line, but also influenced
the dividend payout pattern of the company, i.e.
dividend received from Wilmar has partly determined
the capability of PPB to pay dividend to its shareholders.
FINANCIAL PERFORMANCE OVERVIEW
Revenue. As one of the leading consumer products companies, PPB’s revenue growth was generally in tandem with
the growth of Malaysian income per capita. The year-on-year sequential improvement in revenue was also
underpinned by a healthy business environment, which helped PPB to achieve higher sales especially from its grains
trading and flour business, the largest contributor to PPB’s revenue. On top of that, better cinema ticket collections
and higher contribution from the environmental engineering, waste management, and utilities division also
contributed to the increase in revenue.
Chart 2: PPB's revenue Chart 3: FY14 revenue breakdown
*Chemical trading & manufacturing (3%), Livestock farming (3%), Bakery (3%), Frozen food (1%), & Others (2%)
Source: Annual Report, MIDFR
Chart 1: Wilmar’s contribution to PPB’s PBT and the relationship with commodity prices
MIDF EQUITY BEAT Wednesday, 22 April 2015
7
Earnings. Over the past five years, PPB has recorded stable earnings in the range of RM840m to RM1,046m. This
was mainly due to its nature of business as well as its status of a conglomerate where it is exposed to the risks from
various types of business. The major contributor to PPB’s earnings is the Flour & Feed Milling & Grains Trading
division. In 2014, this segment contributed about 57% to PPB’s earnings before interest and tax (EBIT). The margins
from these businesses are nonetheless not very compelling. However, as the largest flour producer in Malaysia, PPB
managed to gain higher market share compared to the other flour manufacturers. The average EBIT margin of this
division for the past five years was only circa 8%.
Unlike the flour and feed milling and grains trading division, the property division as well as film exhibition and
distribution have recorded commendable EBIT margins. For the past 5-years, the property division as well as film
exhibition and distribution contributed to double-digit margins with an average of 38% and 14% respectively.
Chart 4: PPB's earnings
Chart 5: Contribution by segment in FY14 (EBIT)
*Chemical trading & manufacturing (1%), Livestock farming (5%), Investment Income (3), Bakery (3%) & Others (-9%)
Source: Annual Report, Company
Dividends. As one of the constituents of FBM30, PPB has consistently rewarded their shareholder through dividends.
Over the past five years, PPB paid about 15% to 30% of their earnings to the shareholders. Besides the operational
performance, PPB’s dividend payout was also associated with the dividend income received from Wilmar. Willmar has
on average paid about USD75m (approximately RM248m) to PPB between the years of 2010-2014.
OUTLOOK
Stronger growth from property and cinema businesses. Moving forward, we are expecting the property and
the film exhibition and distribution divisions to continue to grow and help to further elevate PPB’s earnings. The
sluggishness in the current property market could be advantageous to PPB as they may be able to acquire lands at
competitive price for the expansion of their property’s business. Meanwhile, for the cinema business, we are
anticipating a stronger growth in 2015. This will be supported by strong line-up of film title releases, which will drive
higher admissions. On the other note, in the light of volatile commodity markets and the implementation of the Goods
and Services Tax (GST), the consumer sentiment in Malaysia is likely to be cautious. However, the stable rise in
income and employment are expected to support household spending. Hence, we are expecting the performance of
the PPB’s flour, feed and food-related businesses to continue to be sustained.
MIDF EQUITY BEAT Wednesday, 22 April 2015
8
Expecting modest contribution from Wilmar. We believe that lower commodity prices, particularly palm oil,
crude oil and sugar, will negatively impact Wilmar’s upstream businesses. However, we are expecting Wilmar’s
downstream operations to benefit from the lower feedstock costs and help to partly offset the downturn in its
upstream segment. Additionally, we also expect that Wilmar’s biodiesel business to benefit from the recently
announced biodiesel policy in Indonesia. Overall, we are anticipating Wilmar’s earnings to be moderate.
VALUATION
Undemanding valuation. We are valuing PPB with a target price of RM15.30 per share. We are applying sum-of-
part valuation methodology to reflect the different business segments of the group as well as to take into
consideration the proportionate value of Wilmar which accrue to the group. Our target price translates into an implied
FY16 forward PER of 16.5x imputed based on FY16 forecasted EPS of 92.7sen. This is slightly below the seven-year
historical average PER of 17.1x.
Table 4: Sum-of-parts valuation table
Segments Target PER (x)
FY 16 Segment value (RMm)
Remarks
Flour & feed milling & grains trading 13 1,540.1 Average sector forward PER
Marketing, distribution & manufacturing of consumer products
16 354.0 Average sector forward PER
Film exhibition & distribution 20 1,082.4 Average sector forward PER
Environmental engineering, waste management & utilities
132.9 Book value
Property investment & development 9 235.1 Property mid cap forward PER
Chemicals, livestock, investment and other
operations 7.3 Book value
18.3% stake in Wilmar International Ltd 16 13,875.4 Five years historical average
PER
14% stake in Malaysian Bulk Carriers Bhd 183.4 Sum-of-part valuation
Net (debts)/cash (Holdings co.)
722.3
Equity value (RMm)
18,132.9
Share capital (m)
1,185.5
SOP/share (RM)
15.30
Figure 2: PPB’s Forward PER Band
5
7
9
11
13
15
17
19
21
23
25
2010 2011 2012 2013 2014 2015
15x
18x
21x
RM
25x
Source: Bloomberg,MIDFR
MIDF EQUITY BEAT Wednesday, 22 April 2015
9
INVESTMENT STATISTICS
FYE 31st Dec (RMm) 2013 2014 2015F 2016F 2017F
Revenue 3,312.9 3,701.0 3,911.5 4,150.4 4,400.8
EBIT 259.2 296.1 331.1 351.3 385.1
Finance income 28.4 29.2 30.1 31.0 31.9
Share of Associates 785.7 719.5 830.4 890.4 809.8
Share of Joint Venture 3.9 4.6 4.7 4.8 4.9
Finance costs -13.6 -21.3 -23.6 -20.9 -17.9
Profit before tax 1,063.4 1,028.1 1,142.6 1,225.5 1,182.0
Taxation -72.5 -89.2 -90.3 -96.9 -107.6
Profit after tax 990.9 938.9 1,052.4 1,128.6 1,074.4
Non-controlling interest -8.4 -22.1 -26.1 -29.3 -29.3
Profit attributable to the owner 982.6 916.8 1,026.3 1,099.3 1,045.0
EPS (sen) 82.9 77.3 86.6 92.7 88.2
EPS growth (%) 16.7 -6.7 11.9 7.1 -4.9
PER (x) 19.3 20.7 18.5 17.2 18.1
DPS (sen) 25.0 23.0 28.3 30.3 28.8
Dividend yield (%) 1.6 1.4 1.8 1.9 1.8
Source: Company, MIDFR estimates
DAILY PRICE CHART
Nadia Kamil
[email protected] 03-2772 1669
MIDF EQUITY BEAT Wednesday, 22 April 2015
10
FINANCIAL STATEMENTS Income Statement (RM m) 2013 2014 2015F 2016F 2017F Balance Sheet (RM m) 2013 2014 2015F 2016F 2017F
Revenue 3,312.9 3,701.0 3,911.5 4,150.4 4,400.8 Property, plant & equipment 1,196.0 1,264.3 1,317.0 1,365.8 1,410.8
EBIT 259.2 296.1 331.1 351.3 385.1 Investment properties 204.1 195.6 203.8 211.3 218.3
PBT 1,063.4 1,028.1 1,142.6 1,225.5 1,182.0 Biological assets 2.9 3.2 3.3 3.4 3.5
PATAMI 982.6 916.8 1,026.3 1,099.3 1,045.0 Other intangible assets 2.7 3.0 3.1 3.2 3.3
EPS (sen) 82.9 77.3 86.6 92.7 88.2 Investment in associates 12,628.2 13,801.2 14,299.5 14,833.7 15,319.6
DPS (sen) 25.0 23.0 28.3 30.3 28.8 Investment in joint venture 57.4 58.5 63.2 68.0 73.0
EBIT margin (%) 7.8 8.0 8.5 8.5 8.8 Others 760.1 612.6 612.6 612.6 612.6
PATAMI margin (%) 29.7 24.8 26.2 26.5 23.7 Non-current assets 14,851.3 15,938.3 16,502.5 17,098.0 17,641.1
Cash Flow Statement (RM m) 2013 2014 2015F 2016F 2017F Inventory 508.5 718.6 759.5 805.9 854.5
PBT 1,063.4 1,028.1 1,142.6 1,225.5 1,182.0 Receivables 645.7 801.0 846.5 898.2 952.4
Amortization & Depreciation 109.0 112.4 117.2 121.8 126.1 Others 95.0 68.0 68.0 68.0 68.0
Interest expense 13.6 21.3 23.6 20.9 17.9 Deposits 498.3 423.1 437.4 449.7 466.4
Share of associates -785.7 -719.5 -830.4 -890.4 -809.8 Short-term fund placements 296.5 401.7 328.1 337.3 349.8
Share of joint venture -3.9 -4.6 -4.7 -4.8 -4.9 Cash and bank balances 170.2 254.5 328.3 337.6 350.1
Interest income -25.4 -17.8 -30.1 -31.0 -31.9 Current assets 2,214.1 2,666.8 2,767.8 2,896.7 3,041.2
Others -1.2 -0.1 0.0 0.0 0.0
OP before ∆ in WC 369.9 419.8 418.2 442.1 479.3 TOTAL ASSETS 17,065.4 18,605.2 19,270.2 19,994.7 20,682.3
∆ in current assets -118.2 -293.5 -86.4 -98.1 -102.8
∆ in current liabilities 35.4 169.0 28.5 35.5 35.1 Share capital 1,185.5 1,185.5 1,185.5 1,185.5 1,185.5
Cash from operations 287.1 295.3 360.2 379.4 411.6 Share premium 6.7 6.7 6.7 6.7 6.7
Tax paid -62.2 -76.7 -90.3 -96.9 -107.6 Retained Earnings 14,461.1 15,628.3 16,318.8 17,058.5 17,761.7
Net cash from Operations 224.9 218.6 269.9 282.6 304.0 Shareholder funds 15,653.3 16,820.5 17,511.1 18,250.7 18,953.9
Non-controlling interests 538.6 560.8 586.9 616.2 645.5
Purchase of PPE -207.7 -182.5 -178.3 -178.3 -178.3 TOTAL EQUITY 16,191.9 17,381.3 18,097.9 18,866.9 19,599.4
Associates' dividend received 184.7 244.3 332.2 356.1 323.9
Interest received 25.9 17.8 30.1 31.0 31.9 Long-term borrowings 89.7 62.0 53.0 44.1 35.1
Others -132.7 -12.8 0.0 0.0 0.0 Others 80.0 85.3 85.3 85.3 85.3
Net cash from Investments -129.9 66.9 183.9 208.8 177.5 Non-current liabilities 169.7 147.3 138.3 129.4 120.4
Bank term loans -21.9 118.7 -80.0 -80.0 -80.0 Payables 348.5 552.2 580.7 616.1 651.2
Dividend paid -249.0 -292.6 -335.8 -359.6 -341.9 Short-term borrowings 329.1 491.3 420.3 349.2 278.2
Interest paid -16.4 -21.5 -23.6 -20.9 -17.9 Bank overdrafts 0.74 0.27 0.27 0.27 0.27
Others 106.5 18.4 0.0 0.0 0.0 Others 25.6 32.8 32.8 32.8 32.8
Net cash from Financing -180.7 -177.0 -439.4 -460.6 -439.8 Current Liabilities 703.9 1,076.6 1,034.0 998.4 962.5
Net movement in cash -85.7 108.5 14.5 30.8 41.7 TOTAL LIABILITIES 873.5 1,223.9 1,172.3 1,127.8 1,082.9
Beginning cash balance 1,049.7 964.3 1,079.0 1,093.5 1,124.4
Effect of exchange rate ∆ 0.3 6.3 0.0 0.0 0.0 TOTAL EQUITY & LIABILITIES 17,065.4 18,605.2 19,270.2 19,994.7 20,682.3
Ending cash balance 964.3 1,079.0 1,093.5 1,124.4 1,166.1
Key Ratios 2013 2014 2015F 2016F 2017F
Cash Flow Statement Reconciliation Return on Equity (%) 6.3 5.5 5.9 6.0 5.5
Cash and bank balances 170.2 254.5 328.3 337.6 350.1 Return on Assets (%) 5.8 4.9 5.3 5.5 5.1
Deposits 498.3 423.1 437.4 449.7 466.4 Current ratio (x) 3.1 2.5 2.7 2.9 3.2
Short-term fund placements 296.5 401.7 328.1 337.3 349.8 Quick ratio (x) 2.4 1.8 1.9 2.1 2.3
Bank overdrafts -0.7 -0.3 -0.3 -0.3 -0.3 BV per share (sen) 13.7 14.7 15.3 15.9 16.5
Ending cash balance 964.3 1,079.0 1,093.5 1,124.4 1,166.1 Debt-to-equity (x) 0.03 0.03 0.03 0.02 `
Source: Company, MIDFR
MIDF EQUITY BEAT Wednesday, 22 April 2015
KINDLY REFER TO THE LAST PAGE OF THIS PUBLICATION FOR IMPORTANT DISCLOSURES
APPENDIX
i) PPB ORGANISATION STRUCTURE
Source: Company
MIDF EQUITY BEAT Wednesday, 22 April 2015
12
ii) Wilmar’s global presence
Source: Company
KINDLY REFER TO THE LAST PAGE OF THIS PUBLICATION FOR IMPORTANT DISCLOSURES
MIDF RESEARCH is part of MIDF Amanah Investment Bank Berhad (23878 - X).
(Bank Pelaburan)
(A Participating Organisation of Bursa Malaysia Securities Berhad)
DISCLOSURES AND DISCLAIMER
This report has been prepared by MIDF AMANAH INVESTMENT BANK BERHAD (23878-X). It is for distribution only under such circumstances as may be permitted by applicable law.
Readers should be fully aware that this report is for information purposes only. The opinions contained in this report are based on information obtained or derived from sources that we believe are reliable. MIDF AMANAH INVESTMENT
BANK BERHAD makes no representation or warranty, expressed or implied, as to the accuracy, completeness or
reliability of the information contained therein and it should not be relied upon as such.
This report is not, and should not be construed as, an offer to buy or sell any securities or other financial
instruments. The analysis contained herein is based on numerous assumptions. Different assumptions could result in materially different results. All opinions and estimates are subject to change without notice. The research analysts
will initiate, update and cease coverage solely at the discretion of MIDF AMANAH INVESTMENT BANK BERHAD.
The directors, employees and representatives of MIDF AMANAH INVESTMENT BANK BERHAD may have interest in
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MIDF AMANAH INVESTMENT BANK : GUIDE TO RECOMMENDATIONS
STOCK RECOMMENDATIONS
BUY Total return is expected to be >15% over the next 12 months.
TRADING BUY Stock price is expected to rise by >15% within 3-months after a Trading Buy rating has
been assigned due to positive newsflow.
NEUTRAL Total return is expected to be between -15% and +15% over the next 12 months.
SELL Negative total return is expected, by -15% or more, over the next 12 months.
TRADING SELL Stock price is expected to fall by >15% within 3-months after a Trading Sell rating has
been assigned due to negative newsflow.
SECTOR RECOMMENDATIONS
POSITIVE The sector is expected to outperform the overall market over the next 12 months.
NEUTRAL The sector is to perform in line with the overall market over the next 12 months.
NEGATIVE The sector is expected to underperform the overall market over the next 12 months.
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