Indain broker report:10 Jul 2011 14:57
Not very up to date but the only thing that has changed is the huge growth in turnover and profit.
This broker put a value of many times todays share price on the company.
So do i.!!
From a broker in India putting a value on Prime Focus London.!!
Value of PF UK not in the price.
We have used sum-of-parts to value PF • PE-based valuation for PF India, which is still in the hyper growth mode • DCF-based valuation for PF UK, which can be deemed to be relatively steady state. We believe PF's current price does not factor in PF UK, which we currently value at Rs103 per share. Adjusting for the same, the stock is trading at an attractive PE of 12x FY08E and 8x FY09E. PE-based valuation of PF India: As PF does not have a long listed track record and is an emerging business, we have chosen to value it only on one-year forward earnings for now. We have assigned a target PE of 20x, considering the following positives• Market leadership in Indian ET/ETS sector • High 40% earnings CAGR FY07-09 • Room for significant earnings upside from PF UK • Cash-rich, zero net-debt company • Core RoE (excluding investments in PF UK) at 19.5% for FY08E and 25% for FY09E • Estimated payout of at least 20% from FY08. At 20x FY08E EPS of Rs22, our fair value for core PF India works out to Rs440 per share. DCF-based valuation for PF UK: We have assumed very low positive swing in PF UK's performance. Even in the terminal year FY17, our DCF model factors in negative EBIT for the company. However, cash flow remains strongly positive due to aggressive depreciation policy. Considering PF India's 55% claim on PF UK's cash flows, our one-year forward value works out to Rs115 per share.
PF UK - Rs115 based on DCF PF India - Rs440 @20x FY08E EPS