With reference to Noble Grp 1H FY08 result announced on 14th Aug 08, below is a brief summary of it.
1. Revenue for 1H FY08 up 98% to US$19.928b as compared with 1H FY07 of US$10.06b.
2. Gross Profit for 1H FY08 up 138% to US$778m as compared with 1H FY07 of US$327.3m.
3. Gross Profit Margin for 1H FY08 was 3.9% as compared with 1H FY07 of 3.3%.
4. Net Profit for 1H FY08 up 191% to US$289.6m as compared with 1H FY07 of US$99.5m.
5. Net Profit Margin for 1H FY08 was 1.5% as compared with 1H FY07 of 1.0%.
6. EPS for 1H FY08 up 169% to 9.07 US cents as compared with 1H FY07 of 3.37 US cents.
7. NAV for 1H FY08 up 44% to 56.7 US cents as compared with 1h FY07 of 39.3 US cents.
Noble Grp 1H FY08 revenue and net profit were up 98% and 191% respectively due to strong global commodities demand. It also achieved higher tonnage volumes and selling prices amongst select commodities as well as an increasingly integrated supply chain. Base on the result, analysts' responses were as followed.
1. Macquarie maintains outperform, target price $2.88
2. OCBC buy rating, target price $2.99
3. Citigroup buy rating, target price $2.92
4. Merrill Lynch buy rating, target price $3.15
With commodity prices falling and assuming Noble Grp is able to maintain its performance for rest of the year despite that, a conservative estimation of FY08 EPS would be 18.14 US cents ( approx 25.396 S cents ). At 15th Aug 08 price of $1.97, this translates to 7.8x FY08 PE. Below is a list of valuation base on FY08 EPS of 25.396 S cents
15x FY08 PE -- $3.81
14x FY08 PE -- $3.56
13x FY08 PE -- $3.30
12x FY08 PE -- $3.05
11x FY08 PE -- $2.79
10x FY08 PE -- $2.54
9x FY08 PE -- $2.29
8x FY08 PE -- $2.03
7x FY08 PE -- $1.78
6x FY08 PE -- $1.52
5x FY08 PE -- $1.27
For investors who are interested in Noble Grp for long term and to cater for falling commodity prices, a good safety of margin to buy into would be at 7x FY08 PE and lower; ie price $1.78 or lower. Technically, Noble Grp is currently short-term support is at price level of $1.78 ( lower Bollinger band limit ) and upside capped at $2.21; the upper Bollinger band limit.
