FJ Benjamin    Last:0.01   -

Powering up

FJ BENJAMIN, gs remains a BUY with target price $1.10
- FY2007 net profit of S$21.5mn was 9% ahead of our forecast, 2% ahead of Bloomberg consensus. The company also announced a proposed capital repayment of S$0.13/share and a cash dividend of S$0.02/share (less 18% tax). We estimate that the proposed capital repayment will enhance 2008E ROE to 22% (from current 14.8%). We see the recent sell-down as a buying opportunity and reiterate our Buy rating on the stock.
1) Capital repayment ¨C This exercise is subject to EGM and High Court approval, and the company expects the repayment to be completed by 31 Dec 2007. Combined with the cash dividend of S$0.02/share (S$0.016 net of tax) targeted for payment on 30 Nov 2007, this offers a total yield of 19% for a 3-4 month holding period.
2) Strong earnings growth ¨C FJB¡¯s earnings turnaround is on track, and our forecasts indicate 2 year FY2007-2009E core net profit CAGR of 47% driven by store expansions and also better operating margins as new stores mature.
- Our 12 month SOTP-based target price of S$1.10 is unchanged. We have made minor adjustments to our earnings forecasts post the results.
1) Earnings risk from an Asian economic slowdown, given the discretionary nature of FJB¡¯s fashion and timepiece products; 2) Franchise agreements could potentially be re-called by brand owners, but this is unlikely as brand owners focus on larger Asian markets like China.

 

hi shplayer,

i thought the dividend is 3.5 cents per share less tax?

 

shplayer, thanks for ur analysis.

For FJ, it's my long term holdings (together with ST engine, singpost)...which means...I won't sell in a long long while (yrs ?)

Will accumulate more if it gets cheaper...

 

 

cheers jack james! maybe next time... :)

too all bros who bought in yesterday and liquidated this morning at 0.83-0.85.. congrats! handsome 20% profit...

 

zujzuj,

With the market volitility and uncertainty over the marco problems, Perhaps the price of FJB may not perform as well as it should.

However, From the FY YE results, it confirms my assessment of the fundamentals of the company. Co. is targeting to grow its retail floor space by 56% in FY 08. They have not fully realised the potential of their new brand Banana Republic as the spore store was only opened in mid July.

With the increase in tourism expected from 2008 (F1) and then in 2009 from the IRs, retail business expect to get better in spore.

Regionally, growth is also growth is also expected to be strong....except for one or two countries facing some political uncertainties.

Co. is cash rich with the sale of its HQ and the exercise of warrants....so it can self finance its expansion.

A longer term view for investment of FJB will yield higher rewards........just my opinion.

 

eurostaR, you are right. Should listen to you yesterday.... today too late to buy.

 

The wait is over !!

 

Divvy 2.0 cts less tax + 13.0 cts cap reduction.....total 14.64 cts net of tax.

 

FJ released its FY07 results today.  Net Profit more than doubles to $21.5M.

 

For those who wants to buy and hold better do it soon!!! suspension for announcement going to be within the next hour or so.... :)

 

confirmed on 23rd aug...

looking at the economic market. i think their profit announcement will be quite substantial....

prob good to buy and hold for the next couple of weeks.

 

FY07 result out on 23 Aug.

 

That's Great news. The shares might look demaged, but the Company is definitely not.

Lets follow the BBs. Vested. Confirm result will be out 28Aug?

 

http://www.lloydgeorge.com/

dig up some information on the fund buying into FJ...

They can buy at 0.838, so that should be the support

 

Lloyd George Investments increased its stake in FJB.

http://info.sgx.com/webcorannc.nsf/ef3ba6cb188613ea482571b2003641d3/011849011d1d25494825732b0039bd85?OpenDocument

 

watch this stock.. now trading at 0.84. should hit the $1 by end this mth... :)

 

dinola,

NAV should increase with conversion of warrants.

NAV @ 31 Mar 07 was 35.52 c. Conversion price @ ratio of 1:1 is 45c. This 45c is higher than the NAV. So, as long as NAV is less than 45c, NAV should increase with conversion.

zujzuj,

Yes, Bollies very tight....but better leave it to TA experts to read the charting 'tea leaves'.

As for me, I think 4Q 07 should be good. Also bear in mind that FJB have been adding new brands recently.....Gap, Banana Republic and Celine.

Further down the road, tourism is improving.....watch out for 2009 when IR will come on stream. 2008, F1 debuts in Spore.

Regional economy is doing well, employment is strong and consumer confidence is updeat. All this  bodes well for the consumer retail business.

Personnal opinion...caveat emptor.

 

The price of FJ has not been moving at all for nearly 4 weeks. Trapped in a very tight range...waiting for breakout. I expected the results for this quarter to be good as shown by the recent retail figures for the month of May.

Any views ?

 

 

Hi shplayer, Thanks!

Summarise:  EPS decrease, NAV increase and cash position improve.

If i m not wrong, I'll take it that NA per share will decrease as well, along with EPS.

 

dinola,

Yes, you are right. Conversion of warrants will have dilutive effect on eps.

However, it is anti dilutive for NAV and it improves its cashflow trememdously.

                                                              1Q07                     2Q07                      3Q07

eps for period  cts                                      0.96                      3.21                       0.87

eps fully diluted cts                                     0.53                     1.92                        0.65

NAV cts                                                    31.46                   33.59                      35.52

Cash or near cash @ end of period  $m      14.4                     52.3                        60.4

2Q07 had the benefit of the sale of their Orange Grove property.

 

The cash position at the end of 3Q 07 translates to about 16c per sh. With more conversion expected in 4Q07, the cash position and NAV would have improved further.