Wednesday, April 19, 2017

QAF (Q01)

Date: 4/19/2017, Price S$1.36, Market Cap: S$775m, PB:~1.45, Yield: 3+%
Source: QAF 2016 AR

QAF's most known brand to me is Gardenia bread. It focuses on:
Bakery  Manufacture and distribution of bread, confectionery and bakery products
Primary production  Production, processing and marketing of meat; feedmilling and sale of animal feeds and related ingredients
Trading and logistics  Trading and distribution of food and beverage products and provision for warehousing logistics for food items
Investments and others  Investment holding and other activities

A few things puzzled me after reading QAF's 2016 Annual Report, which I think QAF can improve in its report in the future:
  • Pg44, many different brands, why not consolidate into a few well known ones to leverage marketing power?

  • Pg 47, Independence of Mr. Didi Dawis, Chairman who is holding 8+% shares, is considered by Nominating committee as independent because of the % is below 10%, Really independent? (in comparison, it is considered significant shareholder for >5% in CN)
  • Pg 84, Advance payment to subsidiaries with no plan of repayment, why would group provision Adv. payment without a plan/expectation for return term, is that causing (at least the concern of) money to be siphoned out of the Group (if such subsidiary is not 100% owned)? The details of this Loan arrangement is surprisingly scarce.

  • Segment reporting, only until Note 41. then I found such info I'm long looking for, and it is not really format friendly. Seems QAF is trying to leave it less noticed in AR.

By sectors:

Too little cost details per sector.

By regions:

It is an Australia company?!?.

There is an one-time profit(divestment of  20% of  Gardenia Bakeries KL in 2016, and remaining 50% of joint-venture's fair value gain), if to normalize it by removing ~60m exceptional item, the PAT will be ~56m(or more, considering the tax impact); ROE 11~12%.

My Plan: to be updated.

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