PP16832/01/2012 (031128)
Malaysia
Results Review
24 February 2012
Padiberas Nasional
Hold (unchanged)
A good ending to the year
Share price:
Target price:
RM3.14
RM3.40 (unchanged)
Inability to raise prices crimped profits. PATAMI of RM165.7m was
6.7% lower YoY, but there was RM20m one off cost (we estimate)
relating to the disposal of Save More business unit. Excluding this item,
core net income of RM187.7m (+4.6% YoY) was slightly ahead of our
expectations of RM180m. Business outlook is expected to perform well
in 2012 as prices of raw rice has receded and Bernas will no longer
bare loss making unit. Maintain Hold with unchanged target price of
RM3.40/share based on DDM.
Wong Chew Hann, CA
wchewh@maybank-ib.com
(603) 2297 8686
Stock Information
Description: Rice custodian in Malaysia, ensuring sufficient
supply and of acceptable quality and price.
Ticker:
Shares Issued (m):
Market Cap (RM m):
3-mth Avg Daily Volume (m):
KLCI:
Free float (%):
PNL MK
470.4
1,477.1
0.34
1,447.99
27.4
Major Shareholders:
Tradewinds (M) Bhd
%
72.6
Historical Chart
4.0
PNL MK Equity
3.5
3.0
2.5
Save More store ends up being “lose a lot”. Save More is Bernas’
wholly owned community convenience stores. It was experiencing startup losses in the highly competitive retail landscape. But, things got
worse when the Government launched the Kedai Rakyat 1 Malaysia,
whereby it is a direct competitor. Management came to terms that the
business has no commercial future and ceases the operations to stem
losses. We estimate the losses loss incurred for the year is at RM20m.
New rice stock obtained at attractive prices. Bernas’ current rice
stock, procured at USD480/ton, should last until Mar 2012. Thereafter it
will be based on fresh rice procurement which is mainly from Vietnam
and Pakistan. The global supply and stocks of rice is ample and it is
understood that Bernas has managed to procure some at similar prices
to previous contracts. This is a good sign that Bernas will be able to
retain its profit margins.
Hold for dividends. We maintain our earnings forecast for 2012-14.
We like Bernas’ strong cashflow business model and its ability to pay
attractive dividends. The net dividend yields are expected to hover
between 7%-8% in the next 2-3 years.
2.0
1.5
1.0
0.5
0.0
Nov-09 Mar-10
Jul-10
Performance:
52-week High/Low
Absolute (%)
Relative (%)
Account receivables back to normal levels. The Government has
pared down its subsidy reimbursements substantially in 4Q11. It has
pared down RM306m and the account receivables at Bernas are now at
normal levels of RM831m or roughly two months of debtor days. This is
the historical average number which indicates that Bernas’ balance
sheet is in good health.
Nov-10 Mar-11
Jul-11
Bernas: Summary earnings table
RM3.59/RM2.07
1-mth
3-mth
6-mth
1-yr
YTD
(2.2)
1.2
12.1
27.7
15.4
31.4
49.5
64.2
15.9
31.9
FYE Dec (RM m)
Revenue
EBITDA
Net Profit before MI
PATAMI
Recurring Basic EPS
DPS
(Sen)- net (Sen)
PER
EV/EBITDA (x)
Dividend Yield - net (%)
P/BV(x)
Net Gearing (%)
ROE (%)
2010A
3,173.0
281.0
186.2
177.5
37.7
22.5
2011A
3,534.4
317.2
172.6
165.7
35.2
21.3
2012E
3,529.2
332.5
204.6
201.1
42.7
24.3
2013E
3,667.9
350.9
218.0
214.5
45.6
25.9
2014E
3,846.4
374.7
235.5
232.0
49.3
28.0
8.3
7.7
7.2
1.4
8.9
7.6
6.8
1.3
7.3
6.6
7.7
1.2
6.9
6.1
8.3
1.1
6.3
5.4
9.1
1.0
64.3
17.9
85.6
15.9
58.2
17.5
50.3
17.1
38.6
17.1
Source: Maybank IB
Kim Eng Hong Kong is a sub sid iar y of Malayan B anking B erh ad
SEE APPENDIX I FOR IMPORTANT DISCLOSURES AND ANALYST CERTIFICATIONS
Padiberas Nasional
Summary Results Table
Quarterly
Cumulative
FY 31 Dec (RM m)
Revenue
EBITDA
EBIT
Pre-tax profit
Tax
Net Profit
Minorities interest
PATAMI
Once off cost (disposal Save More)
Normalised PATAMI
4Q11
983.5
61.6
47.9
39.5
(17.6)
21.9
(3.6)
18.3
20.0
38.3
4Q10
859.1
68.3
53.6
53.5
(12.9)
40.6
(3.2)
37.4
37.4
% YoY
14.5
(9.8)
(10.5)
(26.1)
36.2
(46.0)
13.5
(51.1)
2.4
3Q11
894.7
62.1
52.8
42.2
(12.1)
30.1
(1.5)
28.6
28.6
% QoQ
9.9
NM
(9.2)
(6.4)
45.6
(27.3)
141.3
(36.2)
33.9
12M2011
3,534.4
317.2
227.9
246.8
(74.3)
172.6
(6.9)
165.7
20.0
185.7
12M2010
3,173.0
281.0
186.6
245.8
(59.6)
186.2
(8.6)
177.5
0
172.9
% YoY
11.4
12.9
22.1
0.4
24.5
(7.3)
(19.8)
(6.7)
n.a
4.6
Cash from Operations
Net Debt / (Cash)
370.4
948.6
73.2
644.5
406.1
47.2
(143.8)
1,200.4
(357.6)
(21.0)
2.3
948.6
95.7
644.5
(97.6)
47.2
4Q11
4Q10
12M2011
12M2010
EBITDA margin (%)
6.3
7.9
+/- ppts
YoY
(1.7)
9.0
8.9
+/- ppts
YoY
0.1
PATAMI margin (%)
Tax rate (%)
1.9
44.6
4.3
24.2
(2.5)
20.4
4.7
30.1
5.4
26.2
(0.8)
3.9
6.9
+/- ppts
QoQ
(0.7)
3.2
28.7
(1.3)
15.9
3Q11
Source: Company, Maybank IB
Raw rice price has receded. The graph below shows the benchmark
Thai raw rice price. The price has receded recently as the market fizzle
on the Thai Government buying raw rice at higher than market prices.
Secondly, world inventories are high with some countries (Vietnam and
India) having record level of inventories. We believe this will enable
Bernas to procure its rice needs at attractive prices in 1H12.
Thailand benchmark B
USD / ton
700
600
500
400
2010
2011
2012
Source: Bloomberg
24 February 2012
Page 2 of 5
Padiberas Nasional
INCOME STATEMENT (RM m)
BALANCE SHEET (RM m)
FY Dec
2011A
2012F
2013F
2014F
3,534.4
317.2
(41.4)
275.8
(57.0)
28.0
0.0
246.8
(74.3)
(6.9)
172.6
165.7
3,529.2
332.5
(54.8)
277.7
(44.9)
37.3
0.0
270.1
(65.5)
(3.5)
204.6
201.1
3,667.9
350.9
(57.3)
293.6
(44.9)
39.2
0.0
287.8
(69.8)
(3.5)
218.0
214.5
3,846.4
374.7
(60.1)
314.7
(44.9)
41.2
1.0
310.9
(75.4)
(3.5)
235.5
232.0
11.4%
12.9%
14.8%
(7.3%)
30.1%
(0.1%)
4.8%
0.7%
18.5%
24.3%
3.9%
5.5%
5.7%
6.6%
24.3%
4.9%
6.8%
7.2%
8.0%
24.3%
2011A
2012F
2013F
2014F
172.6
41.4
(195.9)
(72.7)
2.3
(65.7)
0.7
(82.2)
(147.2)
2,241.6
(1,960.8)
(117.6)
280.8
136.0
204.6
54.8
(52.4)
(57.8)
194.0
(50.0)
0.0
(82.0)
(132.0)
93.9
(114.3)
(114.3)
(20.5)
41.6
218.0
57.3
(54.5)
(58.6)
207.2
(50.0)
0.0
18.0
(32.0)
0.0
(127.9)
(121.9)
(127.9)
47.3
235.5
60.1
(70.1)
(73.6)
196.8
(55.0)
0.0
18.0
(37.0)
0.0
(123.4)
(130.9)
(123.4)
36.4
Revenue
EBITDA
Depreciation & Amortisation
EBIT
Net int (exp)/ Inc
Associates & JV
Exceptional gain/ (loss)
Pretax profit
Tax
Minority interest
Net profit
Net profit ex EI
Sales growth (%)
EBITDA growth (%)
EBIT growth (%)
Net profit growth (%)
Effective Tax Rate (%)
CASH FLOW (RM m)
2011A
2012F
2013F
2014F
Net Fixed Assets
Other LT Assets
Cash & ST Invts
Other Current Assets
Total Assets
400.2
416.1
377.7
1,650.2
2,844.2
482.0
299.2
571.3
1,635.1
2,987.6
478.7
299.2
619.7
1,699.4
3,097.0
477.6
299.2
734.6
1,782.0
3,293.7
ST Debt
Other Current Liab
LT Debt
Other LT Liab
Shareholders Equity
Minority Interest
Total Cap. & Liab
556.4
221.0
769.9
99.4
1,108.2
89.3
2,844.2
515.4
283.8
771.2
97.8
1,228.7
90.7
2,987.6
515.4
293.6
771.2
97.8
1,324.8
94.2
3,097.0
515.4
306.2
771.2
97.8
1,428.4
97.7
3,216.7
Share Capital (m)
Gross Debt/(Cash)
Net Debt/(Cash)
Working Capital
470.4
1,326.3
948.6
1,250.5
470.4
1,286.6
715.3
1,407.3
470.4
1,286.6
666.9
1,510.2
470.4
1,286.6
552.0
1,695.1
FY Dec
2011A
2012F
2013F
2014F
EBITDA Margin (%)
EBIT Margin (%)
Net Profit Margin (%)
Core Net Profit Margin (%)
ROE (%)
ROA (%)
Dividend Cover (x)
Interest Cover (x)
Debtors Turn (days)
Creditors Turn (days)
Inventory Turn (days)
Current Ratio (x)
Quick Ratio (x)
Net Debt/Equity (X)
Capex to Debt (%)
N.Cash/(Debt)PS (sen)
Opg CFPS (sen)
Free CFPS (sen)
9.0%
7.8%
4.9%
4.7%
15.9%
6.6%
0.6
4.8
101.9
27.6
71.9
2.6
1.9
0.9
5.0%
2.0
0.0
0.2
9.4%
7.9%
5.8%
5.7%
17.5%
7.0%
0.6
6.2
101.9
27.7
72.2
2.8
1.9
0.6
3.9%
1.5
0.4
0.5
9.6%
8.0%
5.9%
5.8%
17.1%
7.2%
0.6
6.5
101.9
27.7
72.3
2.9
2.0
0.5
3.9%
1.4
0.4
0.5
9.7%
8.2%
6.1%
6.0%
17.1%
7.4%
0.6
7.0
101.9
27.8
72.5
3.1
2.2
0.4
4.3%
1.2
0.4
0.5
RATES & RATIOS
FY Dec
Net Profit
Dep. & amort
Chg. In wkg cap
Other ope. CF
Operating CF
Net capex
Disposal/(purchase)
Others
Investment CF
Net chg in debt
Chg in other LT liab.
Oth. Financing CF
Financing cash flow
Net cash flow
FY Dec
Sources: Company, Maybank-IB
24 February 2012
Page 3 of 5
Padiberas Nasional
APPENDIX 1
Definition of Ratings
Maybank Investment Bank Research uses the following rating system:
BUY
HOLD
SELL
Total return is expected to be above 15% in the next 12 months
Total return is expected to be between -15% to 15% in the next 12 months
Total return is expected to be below -15% in the next 12 months
Applicability of Ratings
The respective analyst maintains a coverage universe of stocks, the list of which may be adjusted according to needs. Investm ent ratings are
only applicable to the stocks which form part of the coverage universe. Reports on companies which are not part of the coverage do not
carry investment ratings as we do not actively follow developments in these companies.
Some common terms abbreviated in this report (where they appear):
Adex = Advertising Expenditure
BV = Book Value
CAGR = Compounded Annual Growth Rate
Capex = Capital Expenditure
CY = Calendar Year
DCF = Discounted Cashflow
DPS = Dividend Per Share
EBIT = Earnings Before Interest And Tax
EBITDA = EBIT, Depreciation And Amortisation
EPS = Earnings Per Share
EV = Enterprise Value
FCF = Free Cashflow
FV = Fair Value
FY = Financial Year
FYE = Financial Year End
MoM = Month-On-Month
NAV = Net Asset Value
NTA = Net Tangible Asset
P = Price
P.A. = Per Annum
PAT = Profit After Tax
PBT = Profit Before Tax
PE = Price Earnings
PEG = PE Ratio To Growth
PER = PE Ratio
QoQ = Quarter-On-Quarter
ROA = Return On Asset
ROE = Return On Equity
ROSF = Return On Shareholders’ Funds
WACC = Weighted Average Cost Of Capital
YoY = Year-On-Year
YTD = Year-To-Date
Disclaimer
This report is for information purposes only and under no circumstances is it to be considered or intended as an offer to sell or a solicitation
of an offer to buy the securities referred to herein. Investors should note that income from such securities, if any, may fluctuate and that each
security’s price or value may rise or fall. Opinions or recommendations contained herein are in form of technical ratings and fundamental
ratings. Technical ratings may differ from fundamental ratings as technical valuations apply different methodologies and are purely based on
price and volume-related information extracted from Bursa Malaysia Securities Berhad in the equity analysis.Accordingly, investors may
receive back less than originally invested. Past performance is not necessarily a guide to future performance. This report is not intended to
provide personal investment advice and does not take into account the specific investment objectives, the financial situation and the
particular needs of persons who may receive or read this report. Investors should therefore seek financial, legal and other advice regarding
the appropriateness of investing in any securities or the investment strategies discussed or recommended in this report.
The information contained herein has been obtained from sources believed to be reliable but such sources have not been indepe ndently
verified by Maybank Investment Bank Berhad and consequently no representation is made as to the accuracy or completeness of this report
by Maybank Investment Bank Berhad and it should not be relied upon as such. Accordingly, no liability can be accepted for any direct,
indirect or consequential losses or damages that may arise from the use or reliance of this report. Maybank Investment Bank Berhad, its
affiliates and related companies and their officers, directors, associates, connected parties and/or employees may from time to time have
positions or be materially interested in the securities referred to herein and may further act as market maker or may have assumed an
underwriting commitment or deal with such securities and may also perform or seek to perform investment banking services, advisory and
other services for or relating to those companies. Any information, opinions or recommendations contained herein are subject to change at
any time, without prior notice.
This report may contain forward looking statements which are often but not always identified by the use of words such as “anticipate”,
“believe”, “estimate”, “intend”, “plan”, “expect”, “forecast”, “predict” and “project” and statements that an event or result “may”, “will”, “can”,
“should”, “could” or “might” occur or be achieved and other similar expressions. Such forward looking statements are based on assumptions
made and information currently available to us and are subject to certain risks and uncertainties that could cause the actual results to differ
materially from those expressed in any forward looking statements. Readers are cautioned not to place undue relevance on these forwardlooking statements. Maybank Investment Bank Berhad expressly disclaims any obligation to update or revise any such forward looking
statements to reflect new information, events or circumstances after the date of this publication or to reflect the occurrence of unanticipated
events.
This report is prepared for the use of Maybank Investment Bank Berhad's clients and may not be reproduced, altered in any way, transmitted
to, copied or distributed to any other party in whole or in part in any form or manner without the prior express written consent of Maybank
Investment Bank Berhad and Maybank Investment Bank Berhad accepts no liability whatsoever for the actions of third parties in this respect.
This report is not directed to or intended for distribution to or use by any person or entity who is a citizen or resident of or located in any
locality, state, country or other jurisdiction where such distribution, publication, availability or use would be contrary to law or regulation.
24 February 2012
Page 4 of 5
Padiberas Nasional
APPENDIX 1
Additional Disclaimer (for purpose of distribution in Singapore)
This report has been produced as of the date hereof and the information herein maybe subject to change. Kim Eng Research Pte Ltd
("KERPL") in Singapore has no obligation to update such information for any recipient. Recipients of this report are to contact KERPL in
Singapore in respect of any matters arising from, or in connection with, this report. If the recipient of this report is not an accredited investor,
expert investor or institutional investor (as defined under Section 4A of the Singapore Securities and Futures Act), KERPL sh all be legally
liable for the contents of this report, with such liability being limited to the extent (if any) as permitted by law.
As of 24 February 2012, KERPL does not have an interest in the said company/companies.
Additional Disclaimer (for purpose of distribution in the United States)
This research report prepared by Maybank Investment Bank Berhad is distributed in the United States (“US”) to Major US Institutional
Investors (as defined in Rule 15a-6 under the Securities Exchange Act of 1934, as amended) only by Kim Eng Securities USA, a brokerdealer registered in the US (registered under Section 15 of the Securities Exchange Act of 1934, as amended).
All responsibility for the distribution of this report by Kim Eng Securities USA in the US shall be borne by Kim Eng. All resulting transactions
by a US person or entity should be effected through a registered broker-dealer in the US.
This report is for distribution only under such circumstances as may be permitted by applicable law. The securities described herein may not
be eligible for sale in all jurisdictions or to certain categories of investors. This report is not directed at you if Kim Eng Securities is prohibited
or restricted by any legislation or regulation in any jurisdiction from making it available to you. You should satisfy yourself before reading it
that Kim Eng Securities is permitted to provide research material concerning investments to you under relevant legislation and reg ulations.
Without prejudice to the foregoing, the reader is to note that additional disclaimers, warnings or qualifications may app ly if the reader is
receiving or accessing this report in or from other than Malaysia.
As of 24 February 2012, Maybank Investment Bank Berhad and the covering analyst does not have any interest in in any companies
recommended in this Market themes report.
Analyst Certification:
The views expressed in this research report accurately reflect the analyst's personal views about any and all of the subject securities or
issuers; and no part of the research analyst's compensation was, is, or will be, directly or indirectly, related to the specific recommendations
or views expressed in the report.
Additional Disclaimer (for purpose of distribution in the United Kingdom)
This document is being distributed by Kim Eng Securities Limited, which is authorised and regulated by the Financial Services Authority and
is for Informational Purposes only.This document is not intended for distribution to anyone defined as a Retail Client under the Financial
Services and Markets Act 2000 within the UK. Any inclusion of a third party link is for the recipients convenience only, and that the firm does
not take any responsibility for its comments or accuracy, and that access to such links is at the individuals own risk. Nothing in this report
should be considered as constituting legal, accounting or tax advice, and that for accurate guidance recipients should consult with their own
independent tax advisers.
Published / Printed by
Maybank Investment Bank Berhad (15938-H)
(A Participating Organisation of Bursa Malaysia Securities Berhad)
33rd Floor, Menara Maybank, 100 Jalan Tun Perak, 50050 Kuala Lumpur
Tel: (603) 2059 1888; Fax: (603) 2078 4194
Stockbroking Business:
Level 8, Tower C, Dataran Maybank, No.1, Jalan Maarof 59000 Kuala Lumpur
Tel: (603) 2297 8888; Fax: (603) 2282 5136
http://www.maybank-ib.com
24 February 2012
Page 5 of 5