Peer Analysis von eduCBA Global Online Training Experts

Dozent des Vortrages Peer Analysis

eduCBA Global Online Training Experts

EduCorporateBridge is a globally recognized training firm, providing blend of instructor-led and online financial training programs in Excel, Advanced Excel, VBAs, Macros, Equity Research, Wealth Management, Technical Analysis Investment banking, Private Equity, Fundamental Analysis, Investment Research and Credit Research as well as preparatory courses like CFA Level I & II and FRM Level I & II, Campus Placement Trainings etc.

The Corporate Bridge Online training Learning Management System provides access to high end excel videos, valuation tutorials, online tests, downloadable templates and models that are prepared by Research Analysts & Investment Bankers.
www.educorporatebridge.com

Kundenrezensionen

Auszüge aus dem Begleitmaterial

... After quadrupling since our initiation in April-07, RPL now trades at an asset value of $4,129/complex-bpd – 2.4x that of its peers in the US and a 50-70% premium to even the most expensive refinery new-builds quotes. While such a premium recognizes its superior earnings potential because of lower capital costs and taxes, even on earnings-based multiples RPL appears fully priced relative to its peer-group at 10.9x P/CE and tax-benefit-adjusted 9.9 EV/Ebitda calculated on our upgraded top-of-consensus FY10 estimate. Risk reward is unfavourable. U-PF. RPL trading at 2.4x the asset valuations of US peer-group Reliance Petroleum has quadrupled since our initiation in Apr-07 and now implies an asset value of $4,129/complex-bpd ...

... Source: CLSA Asia-Pacific Markets A premium asset with premium profitability. Some of the premium complexity-adjusted asset valuation is justified because of its higher earnings power because of its Lower capital costs ($740/complex-bpd ex of utilities which are in private enteritis) which is reflected in lower interest costs, depreciation; Income tax savings due to its SEZ-unit status which allows it a tax- holiday for five years followed by concessional rates over next ten years;  Savings from substitution of liquid fuels (fuel-oil, naphtha) used for the refinery’s power and steam requirement with lower priced natural gas. Upgrading FY09-12CL estimates by 52-71% In hindsight, our original April-07 earnings estimates now appear too low and we are upgrading FY09-12CL estimates by 51-71% to reflect ...

... Projects in Asia (2.6mbpd) and the Middle East (0.3m) will make up 72% of this additional capacity. Over the next five years, we expect 10.8mbpd of additional capacity to come onstream. Further, with oil prices at US$90/bbl, the risk to global oil demand growth remains on the downside. The IEA, for example, has consistently overstated growth in 2006-7; it has halved its 2007 demand growth estimate to 1.2mbpd since its first estimate, for example. We see a similar pattern evolving for its 2008 estimate (+2.4%) which we find optimistic given the slowdown in OECD and the reasonable, but not explosive, growth in developing economies. Supply addition will exceed demand growth in 2008-9. IEA has consistently overstated demand growth ...

... This may reduce the margin premiums that complex and coking refineries have enjoyed over simpler ones due to lower crack spreads along with narrowing fuel-oil discounts. In addition, while not built into our estimates, global crude pool quality may also improve marginally over the next couple of years (before deteriorating again). The bulk of non-OPEC production growth (in places like West Africa and Sakhalin) is of superior quality crude while growth in OPEC and FSUNGLs is also lightening the mix. This may also reduce the complexity premiums by impacting light-heavy crude differentials. ...

... is Rs158/share based on our explicit GRM profile, a 3% terminal growth an d a 10.8% WACC. A DCF remains the best measure because it factors in the expected near term margin profile as well as the change in fiscal terms for RPL (zero tax ends in five years). Discounted cash flow on static margins: Recalculating the DCF on a static margin profile (in effect assuming that current margins remain to perpetuity, clearly over-optimistic) shows a fair value of Rs212/share. Peer earnings multiples: Despite the rigor of a DCF, the market is more likely to focus on RPL’s earnings and cashflow potential. We see current global refining stocks as overvalued in the context of likely softening GRMs but using the global average multiples (10.8x PE, 8.0x P/CE and 6.5x EV/Ebitda) on RPL’s FY10 earnings estimates indicates a fair value range of Rs173-218/share. ...

... last year with several refining projects delayed or put on hold. Our survey of recent costs indicates that a highest quoted asset cost of $30,000/bpd for Essar’s proposed 300kbpd refinery in Iran (reportedly scrapped now) which is expected to cost US$8-10bn. On a complexity adjusted basis, the 615kbpd Al-Zour refinery in Kuwait which recently received quotes of $15bn and above appears to be the most expensive at $2400/complex- bpd. This would indicate a fair value range of Rs160-178/share. Replacement costs adjusted for interim free cash flow: A more benign valuation indicator would suggest that replacement costs should be adjusted for the free cashflow profile to enable a like-to-like comparison with refineries already in production. ...

... cases (LNG in the 90s, for example) when markets tighten and then recede as cost pressures soften. RPL would trade at 9.6x FY10 EPS (16.6x Normalized EPS) on our target price. The implied asset multiples ($37,000/bpd and $2,647/complex-bpd adjusted for the 900kta PP plant and tax benefits) are also higher than most peer valuations today and well above historical benchmarks and recent M&A. Figure 15 Asset valuations of peers in the US, Europe, AxJ, Japan and India ...

.. it decision which will depend on “commercial issues” and “economics of investment”. Chevron also indicated in its post 3Q-2007 analyst call that it is yet to sign some key agreements (related to crude sale and product purchase) on which its option to buy is contingent. In this context, we see a decision by Chevron to buy into RPL as unlikely in the near term. Further, with RPL at 4.5x the levels at which Chevron bought its initial 5% stake and with RPL trading at an implied value of $56,000/bpd and $4000/complex-bpd, the economic rationale may also have deteriorated significantly from Chevron’s point of view. A buy-in may still be possible should there be a quid-pro-quo between Reliance and Chevron in other segments of the energy chain – for example, a farm-out of Reliance’s up stream blocks to ...

... On static GRM 224 Above but with static GRMs of $16.1/bbl ion horizon period, 3% terminal growth 10.5 18.1 2,901 212 (21) Peer earnings multiples 10.9x PE 230 2008E global average ex India, Japan on FY10 est. 10.8 18.6 2,987 218 (19) 8.0x P/CE 197 2008E global average ex India, Japan on FY10 est. 9.2 15.9 2,523 186 (31) 6.5x EV/Ebitda 183 2008E global average ex India, Japan on FY10 est. 8.6 14.8 2,333 173 (36) Peer asset valuations $2,200/complex-bpd 173 Based on the weighted average of global refinery peer asset multiples 8.1 14.0 2,200 164 (39) $18,200/bpd 108 -do- but complexity adjusted 5.1 8.7 1,300 103 (62) Replacement Cost $2400/complex-bpd 188 Based on highest recent quote (Al-Zour in Kuwait) ...

... such individuals may have one or more conflicts of interests that could affect the objectivity of this report. The Hong Kong Securities and Futures Commission requires disclosure of certain relationships and interests with respect to companies covered in CLSA's research reports and the securities of which are listed on The Stock Exchange of Hong Kong Limited and such details are available at www.clsa.com/member/research_disclosures/. Disclosures therein include the position o f the CLSA Group only and do not reflect those of Calyon and/or its affiliates. ...