₦airaland Forum

Sunrisepebble:
Pls explain your position with the bank recapitalization and the dilution effect. Maybe there’s something I’m missing in my own view also.
Personally I feel these banks are still very cheap on FA terms, even with dilution effect, the PEs are not high at all.

I agree with you that the PEs are not high.
Historically also, the banking sector has very low PEs

emmanuelewumi:
I got negative 157 days for 2023 and negative 22 days for 2024

I got negative 138 days for 2023 and negative 31 days for 2024.

I think it is still within the band, error of -20 days and - 9 days.

Finchat got negative 92 days for 2023.

Hello House,
Please have been trying to upload my kids passport photo in the DS-160 but it is not accepting it.
What can i do? what is the special requirement for acceptance?

emmanuelewumi:
@ Emmadet, kindly assist with their Cash Conversion Cycle.
I got negative figures
This is too good to be true,

Avg Inventory = 2024 inventory + 2023 inventory /2 = 2.1b
Avg Receivable = 2024 Receivable + 2023 receivable / 2 = 222b
Avg Receivable = 2024 Payable + 2023 Payable / 2 = 136b
Change in Inventory = 2024 inventory - 2023 Inventory = 607m

DIO = Avg Inventory /COS x days = 2.1b/164b x 365 = 5 days
DSO = Avg Acct. Receivables / Revenue x days = 222b /306b x 365 = 265 days
DPO = Avg. Payable / (COS + change in inventory) x days = 136b / (306b +607m) x 365 = 301 days
It takes only 5 days for transpower to sell their generated power supply
265 days / roughly 9 months to get paid by either govt. or distribution companies
301 days / 10 months to pay contractors or their bills
CCC = DIO + DSO - DPO = 5 + 265 - 301 = -31 days

[b]A cash conversion cycle (CCC) of -31 days indicates a very efficient working capital management scenario.
A negative cash conversion cycle suggests that a company receives cash from sales before it has to pay its suppliers for the inventory used to create those sales. In other words, the company is generating cash quickly and delaying cash outflows.
The negative number means the company is essentially being paid by customers before it has to pay its own suppliers.
This typically occurs in business models with rapid inventory turnover and favorable payment terms.
The business is highly efficient in managing its working capital
This is generally considered a very positive financial characteristic, as it means the company:
Has strong bargaining power with suppliers
Can delay cash outflows
Generates cash quickly from its operations
Potentially reinvests this cash flow into growth or other business opportunities
The negative number represents the number of days the company can operate without requiring additional cash injection, effectively creating a self-funding business model. [/b]
At bolded is from Claudia

Note -
Cash conversion cycle is mostly used for businesses in business cycle stage 3 -
Companies that just breakeven from losses to net profits so as to asses the company, how much profit and how fast are they converting their profits to cash for expansion or growth.
Companies into production or Manufacuring to know how fast they sell their goods and convert it to cash

ositadima1:
Are the "several million units" you own in Oando affecting your judgment? How can the same person criticize Oando for hyping irrelevant news to boost prices in one post and then accuse them of suppressing news in another? If you ask me, I’d say it’s time for you to chill, do some relaxation exercises, and take your mind off Oando for a while.

At this point, you might be a hazard to others, especially if you drive or engage in sensitive work.

drlaykay:
It's the fee, he stated it.
He wants to stop the USA's big brother role.
No more USA subsidizing things for the rest of the world.
He will rejoin at the appropriate price.
He is a strict business man.

It comes with a price because nothing is actually free in the world.
He who pays the piper dictates the tune, reason why US had always been influencing UN, IMF, World bank and co to subdue others and invade other countries.
Let them stop the funding of these organizations instead of cherry picking and china with Russia would fill the void and start using the same organizations to stifle and starve US economy until she fully bleeds out

Nazgul:
No company in Nigeria can pay you such amount monthly unless your business is recording a tremendous amount of success or you're earning in USD.

That's the only way you can hit the 1m mark monthly.

Average salary for maritime officers and oil and gas staff is 1m and above.
When I was working in Nigeria, mine was around 1.5m per month and it was a common salary in the industry

maak400:
Is the 60k a one time payment? How does it work pls?

You can pay it 4 times a year (quarterly) or twice or once

djon78:
Ok Nations cup in Morocco
That's Great

I personally will plan towards 2026 world cup and it will be in Yankee

My US Visa will be readily available then
In sha Allah!!

God go do am bro.
All na planning.
I don secure my US and Canada visa down since last year sef to avoid stories that touches like denying.
US, Canada and Mexico are the 3 countries hosting it. So it will be a nice time to see these countries

Bobodee09:
He was a well to do man . He had those kids when things were good.

We could ever imagine things will go this bad 10yrs ago.

You came blame anyone who got married 2010 who has 3-4kids. Things was good then

Even if things are good and the government is performing well, doing their duties - good road, electricity, housing, education, jobs etc is the best thing and the best thank you to the government chains of kids? Why give a government extra headaches for doing something right.
Why is it that the best thank you is more headaches to government.
Then we hear all so familiar story of how things were better during their time and never knew things will get this bad. It still boils down to bad decision making.
If the government is trying to make the economy good and better just like you agree to prior 2010, the best thing the reasonable citizens to do is not to have more kids now

Bobodee09:
Is so bad that has a married man you can't even buy yourself new wears.

Throughout last year I couldn't get myself a new set of jeans trouser even tho I needed it badly despite having the money.
All the money I made last year 90% when into paying bills and household expenses.
It so crazy how you has a man you will have over 200k in your acc and you be scared to even buy yourself something of 10k cos of fear of the unknown.
In all of this my wife and kids still has many clothes they haven't worn I paid for you.

Last weekend my wife bought herself over 10 new shirt and when I saw it I reminded her how I couldn't even buy myself new jean....she told me nah me no wan buy nah.
It really hurt me cos whatever money I make the family expenses come first before my own personal needs but it isn't same for women.

I just feel marriage is design for men to suffer honestly.
People just taking from you and no one really care about what you need.

This was me years back but I changed it. Started looking out for myself first.
My wife and in-laws said I was. Selfish but I love the selfish side of me.
I make sure I buy things for myself like clothes or perfs or sneakers on monthly basis.
Whatever is left is what we use to solve whatever problem on ground.
I sleep better now, dress better and smell better.
I see my ladies and married women look at me in admiration and I love it. Far better than when I was a slave to others and was invincible to other gender.
Watch out for yourself bro.
If you die today, your wife, children and family will miraculously adjust to new reality and solve their problems themselves

Bobodee09:
Most times I don't like arguing this things cos it like you women never be accountable for anything.

So having those kids was actually only the man decision The woman didn't want them to be 4 ,the man was constantly raping her.

They just gave birth to the children last night and since he went broke due to the economy he should killed 2 out of those kids so he can take of wife and the remaining 2 according to you.


It very easy to know someone like you isn't married.


No this fact today, left to most men just having 1 or 2 kids is enough but it is women who clamor for more kids in marriage.

A woman clamouring for more kids is one thing, a man accepting it makes him a fool.
When the going gets tough, who is always the one worried? The man
Who won't sleep and be worried when others are sleeping and snoring? Man
Who will be in a tight corner without help? Call friends and family for loan, na so so stories and blocking your line and WhatsApp? Na man go face the heat. So why become the fool?

highchief1:
no born more than two kids.and don’t over upgrade your life.i drive a 2014 car I can buy a 2024.Most of the time we start what we can’t finish.life no to hard na we Dey stress ourselves.i refuse to put my kids in the most expensive school even though I can afford it.i no Dey do pass myself and this have saved me from pressure a great deal.

We are the same bro.
One of the common traps of men is over upgrading their life.
Before I moved to my personal house, I was staying in a reasonable and decent 3 bedroom flat when my mates where staying in 750k to 2m apartments. It helped me free up cash for other purposes.
I can buy a brand new car too but have been using tokunbo Honda Cross tour.
Kids school fees is reasonable instead of swallowing up needed cash for other purposes.
You will be hearing - I want the best for my kids, reason why I am sending my kids to this expensive school.
I like comfort and no traffic residential area, reason why am staying in this expensive location etc

Bobodee09:
My actual problem is fear of the unknown and unforseen expenses.

For instance last year March my daughter just came back from school and by night she got really sick.
In just 6days we spent over 200k on hospital bills.

I don't have people to run to for help, infact I hardly even ask anyone for help...so I can't afford to be financially stranded.

So that my fear which limits me alot but I think I need to put it aside now.

I think what you need is insurance.
Do health insurance for your kids. 60k per kid with axa mansard, that way, you won't be scared of a child been sick.
You spent 200k on your kid within a week when 60k would have covered that.
You can also think of doing education insurance for your kids and life insurance for yourself

djon78:
Actually I understand you
But this doesn't stop you from buying like 2/3 trousers or appareals/ clothes

It's great you are shouldering your responsibilities, I salute you.
But don't neglect yourself.

I used to be like you. Couple of years back I made a bit good money. But my madam, my home expenses, almost chop everything except the ones I invested back in my business.

Only for my madam, to ask me when we were quarrelling wetin I use the money do? Because I told her about the money. When I reminded her all the money I gave her, she no fit talk again.

That taught me a very big lesson. Now all my earnings, I still take good care of my family, but I don't neglect taking care of myself. I buy good clothes, shoes, etc. This year in Sha Allah I go take better vacation abroad even if na Rwanda or Qatar etc cause I no come this Life to watch others enjoy themselves. I work very hard and play harder

We are in spirit. I started looking out for myself too when I realized I was always worried about family and bills while my wife doesn't.
No matter the problem, she doesn't neglect her dressing, buying clothes or her appearance.
I copied the strategy too and started buying good clothes, perfumes, sneakers etc, going to cinemas, swimming, gym etc.
Na wetin remain we go use solve problems.
I also plan going to morrocco by this year ending for African cup of nation whether Nigeria qualifies or not. Next year world cup too, I will be there by God grace

emmanuelewumi:
At N97.6 EPS it should get to N900 or thereabout. I don't use average 5 years PE.

I use justified PE based on the return on equity, earning growth and the spread between the Return on Invested Capital and risk free yield of about 20% on FGN bond

What ROE did you use?
Roic is about 10% thereby leaving a negative spread if you intend to use cost of equity of 20%.
Earnings growth of over 100% between 2023 and 2024 is not sustainable, I think 15-20% looks better

Ades1:
Bros, can you please drop a similar analysis for TOTAL? 2025 is the year of portfolio consolidation, Trying to reduce all holding to 10-12.

Total -

They are into blending of lubricants, sales and marketing of refined petroleum products and solar products.
Petroleum revenue inceased from 326.4b to 634.1b in Q3/24
lubricants and others from 96.2b to 159.8b
There is a legal action against the company (contigent liability) of 1.26 trillion naira and no provision has been made yet for it in the financial report.
loan increased by 16b to 101.5b, cash and cash equiv. from 88.2b to 99.6b. Net debt is 2.2b
Revenue increased yearly by 53% from 2020 to 794b in Q3/2024, FY 24 to be 1 trillion plus
Net income increased by 103% from 2020 to 27.4b Q3/24
Net margin has been decreasing by 17% from 2021 to 2024 to 3.2%
EPS reducing from 49.7 in 2021 to 38.03 in 2023 but increased to 80.8 in Q3/24
FCF reduced from 52.5b in 2021 to -15.8b in Q3/2024
Equity increased from 42b in 2021 to 75b in Q3/24
Retained earnings increasing YoY
current receivables increased to 226.7b from 152.1b, current payable from 214b to 324b
Inventory from 74b to 141b
Using Cap Oil, Mrs, Conoil and Eterna as benchmarks for industry- Finchat as reference point
Industry highest Gross margin for LTM - 12.8% which is Total
Industry highest Operatin margin for LTM - 8.3%, Total is 6.6%
Industry highest Net margin for LTM - 5.96%, Total is 3.2%
Industry P/E - Highest 23.2, Lowest 7.4
Using a forward P/E of 7.4 / 10, implied price will be between #720 to #1000

NettyNelly:
Can you kindly share or Unpack how you use this Justified PE, Sir. Use any example you are very comfortable with

Understand how to calculate justified P/E (Price-to-Earnings) ratio using these fundamental factors.

The justified P/E ratio is a fundamental valuation metric that helps determine if a stock is fairly valued based on its growth prospects and returns. Here's how it works:

Let's use a company with these characteristics:
- Return on Equity (ROE) = 15%
- Expected Growth Rate = 8%
- Return on Invested Capital (ROIC) = 12%
- Risk-free rate = 4%
- Equity Risk Premium = 6% (market standard)

The calculation involves several steps:

1. Cost of Equity Calculation:
- Cost of Equity = Risk-free rate + Equity Risk Premium
- In our example: 4% + 6% = 10%

2. Retention Ratio:
- This is how much the company needs to retain to achieve its growth
- Retention Ratio = Growth Rate / ROE
- In our example: 8% / 15% = 53.3%

3. Payout Ratio:
- This is what's left for shareholders
- Payout Ratio = 1 - Retention Ratio
- In our example: 1 - 0.533 = 46.7%

4. Value Spread:
- This shows how much value the company creates above its cost of capital
- Value Spread = ROIC - Cost of Equity
- In our example: 12% - 10% = 2%

5. Final Justified P/E Formula:
```
Justified P/E = Payout Ratio × (1 + Growth Rate) / (Cost of Equity - Growth Rate)
```

Using our numbers:
```
Justified P/E = 0.467 × (1 + 0.08) / (0.10 - 0.08)
= 0.467 × 1.08 / 0.02
= 25.2
```

This means:
- The company's stock can justify trading at 25.2 times earnings
- If the actual P/E is below 25.2, the stock might be undervalued
- If the actual P/E is above 25.2, the stock might be overvalued

The higher justified P/E in this case is supported by:
- Healthy ROE (15%)
- Sustainable growth rate (8%)
- Positive value spread (2%)
- Reasonable payout ratio (46.7%)

As copied from Claudia

Sunrisepebble:
I think you can ignore their forecasts, its usually very conservative. I checked their previous 2024 forecast with some of the results and they have massively outperformed each and every one. I think they can make atlas a N20 EPS for Q4.

That will make eps of around #100
Anyway, I don't feel comfortable with the stock and other stocks in the industry as benchmark - Capoil, Eterna, Conoil, MRS.
They all have low profit margin which speaks volumes about that sector - petroleum and lubricant selling and distribution

emmanuelewumi:
Total Energy should make EPS of about N120 in 2024, don't be surprised if the stock price gets close to N1000

Total 9M/24 eps is #80.8, PAT is 27.4b
Q4/24 PAT forecast is 5.7b, so eps will be #16.8
FYI 2024 eps will be #97.6.
Average 5 years P/E is 7.4
Therefore, I see a price of #722
That is a %7.8 upside to the current price of 670

emmanuelewumi:
Total Energy should make EPS of about N120 in 2024, don't be surprised if the stock price gets close to N1000

.

Ades1:
Bros, can you please drop a similar analysis for TOTAL? 2025 is the year of portfolio consolidation, Trying to reduce all holding to 10-12.

I will check it and get back by Tuesday bro

emmanuelewumi:
Emmadet will definitely do a better and an indepth analysis.

I love short cuts

emmanuelewumi:
2025 forecast for the Oil Plantation in Ghana

Revenue GHC 752 million (N78 billion)
Gross profit GHC 377 million (N39 billion)
Operating profit GHC 376 million (N29 billion)


2025 forecast for Presco.
Revenue grew at a compounded annualized growth rate of 52% from 2019 to date, it actually grew by 88% between 2023 and 2024. For the purpose of this forecast I will use 40% revenue growth,.
Gross margin for 2024 was 76% but I will use 70%, Operating margin for 2024 was 62.5% but I will use 55%

Revenue N224 billion
Gross profit N157 billion
Operating profit N123 billion.

Combined 2025 Operating profit of Presco and that of the business in Ghana will be
N123 billion+N 29 billion = N152 billion which is a conservative estimate

Presco currently has a debt of N58 billion the corporate bond will increase it to N158 billion. The total debt will about the same value with the estimated operating profit for 2025

With this there is a very high probability that the corporate bond will be liquidated between 3 and 4 years

Thanks for the breakdown.
With this calculation, I will add more shares of presco

NettyNelly:
I did it with Microsoft Excel. Was once a Graphic Designer and a Data Analyst

Ohhh, I see.
Nice one

emmanuelewumi:
Will share my thoughts on why it should not sell for less than N800 by the end of August 2025

#800 or #80?

thesilentone:
Technical analysis for BETAGLASS:

Weeklies:
Resistance 67
Major Resistance: 75.40
Above all relevant MAs
MAs rising
Volume spike in December
Significant changes of board members including new CEO (Catalyst might be earnings results like NAHCO?)

Negatives
Lack of Liquidity is an issue.
Volume increase not commensurate with price increase
Breakout already happened - pullback necessary for best entry
No insider trading

Verdict: Imperative that it closes above 67 for trend confirmation. A pullback after this, a digestion and then a push for 75.40 would be ideal. Volume needs to be significantly improved.

Not on my radar.

Nice one

NettyNelly:
Since my thesis is that the market has yet to recognize the company's recently improved earnings, I chose to value the stock purely from an earnings perspective, based on how much the market has historically paid for such earnings.


Beta Glass reported an improved EPS of ₦2.4, ₦4.78, and ₦6.68 in Q1, Q2, and Q3 2024, respectively. This sums up to a 9-month EPS of ₦13.86. I forecast a full-year (FY) annualized EPS of ₦18.46, which assumes the company will earn an EPS of ₦4.6 in Q4. At the Current ₦ 49 share price, this projection translates to a forward P/E ratio of 2.65, which is remarkably low for a company with a 5-year average P/E of 5.

If we multiply the average P/E of 5 by our forecasted FY EPS of ₦18.46, we arrive at a target price of ₦92, representing an 88% upside from the current price of ₦49 per share.

Alternatively, if we take a more conservative approach and assume the company will earn just ₦2 in Q4, the FY EPS would be ₦15.86. Multiplying the same average P/E of 5 yields a target price of ₦79, representing a 62% upside from the current price of ₦49.

My assumption of ₦2 EPS for Q4 2024 is highly conservative. Post-COVID, the only instance where the company earned less than c.₦2 was in Q3 2022, with an EPS of ₦1.46. Apart from that, the business has consistently earned at least ₦2 per share over the last 16 quarters. I believe my target price would be met as the market reprices to 5x earnings or more on the back of strong full-year results, that it is yet to recognize.



Below is a chart I created to illustrate the market doesn't reflect current earnings.

Nice breakdown.
Do you have a software for the chart you created?

chidiebere1999:
Happy Sunday, I have done some technical analysis on BETA GLASS and I believe that the stock price can rally to as high as 105. Below is my analysis. Does anyone have any criticisms

It will get there, probably in a year or two provided it sustains the current growth

emmanuelewumi:
Nahco

Revenue growth

2019 N9.9 billion
2020 7.1 billion
2021 N10.2 billion
2022 N16.7 billion
2023 N28.4 billion
2024 N42 billion ( forecast based on N33.9 billion achieved in Q3 2024)



PAT growth

2019 N718 million
2020 N302 million
2021 N771 million
2022 N2.7 billion
2023 N5.5 billion
2024 N12.2 billion ( forecast based on N9.17 billion achieved in Q3 2024)


Shareholders fund growth

2019 N6.6 billion
2020 N6.4 billion
2021 N7 billion
2022 N9 billion
2023 N12.1 billion
2024 N16.3 billion



Return on Equity growth

2019 11%
2020 5%
2021 11%
2022 30%
2023 45%
2024 73% ( forecast based on Q3 2024 accounts)


Net profit margin growth

2019 7%
2020 4%
2021 7.5%
2022 16%
2023 19.5%
2024 29%.

When return on equity is growing and margin is improving, you should be sure of bumper harvest

Reason why i had to take the ucee loan to buy more because waiting to get cash to do that in 2/3 months may be kinda late

bastardson:
No one is saying anything about Ellah Lakes.. All so quiet about it.

.....Continued .....
What is the chances of a bear base or bull occurring?
From my observation, i will give a bear case 55%, base 45% and bull 5%
a) Bear condition = $0.05b x 0.5% = $0.0275b
b) Base condition = $0.75b x 0.45% = $0.3375b
c) Bull condition = $3.8b x 0.05% = #0.19b
Weighted avg. condition Future Market Cap = a + b + c = $0.52b x #1,600/$1 = #830b future market cap.
Can Ellah Lake really make this? and what year?
Current Ellah Lakes Market Cap is #8.4 b so from calculation above, this is roughly %5000 upside, meaning a #1m invested in Ellah lakes now, if it meets our target will give us #50m excluding dividends and bonuses.
The next question is, how many years will it take ellah lakes to achieve this target?
I will give a ellah lakes a 10 year period, that is 2035 with a moratorium of 3 years which means they won't generate revenue or profit from now till 2027 ending allowing their crops to mature and ready for harvesting and generating income.
Then from 2028 till 2035, ellah lakes must generate revenue and profit and grow their market cap on yearly basis by atleast 64% till 2035 from 2028 - can the management make this? is it achievable?
Let's do the survival Analysis of Ellah Lakes -

Their negative FCF from 2024 - 2021 = 498m - 508m - none - 3380m. This is what they have been burning into investment on yearly basis
Cash and cash equivalent from 2024 to 2021 = 230m - 916m - 237m - 323m. So they only have 6 months cash left to survive 2024, in other wodrs they need to raise loan or dilute more shares to raise capital to keep surviving.
Digging deeper, i noticed they did RI in 2024 and also did a private placement to raise more cash. Probably will be a convertible loan to equity in future.
Since we expect ellah lakes to not generate anything meaningful until 2028 and burning an average of 500m per year, we expect her to raise capital mostly through stock issuance that will last her for atleast 3 years = #1.5b worth of stocks
At #3/share of ellah lakes, an extra 750m shares would be issued to the OS of 2.75b = 3.5b by 2028
Debt raised from 2024 to 2021 = none -38m - 29m -940m
Issuance of stocks from 2024 - 2021 = 2186m - 1187m - 100m - 2200m
From our above calculation, Future Market cap by 2035 = 830b
OS by 2028 - 2035 = 3.5b
Implied price by 2035 when a venture capitalist wants to sell his shares and pull out = #237 / shares.
Can they really make it?
A #1m invested now in ellah lakes to worth 237m by 2035? 10 years from now
a 100k invested now to get 24m in 2035, is it possible?

bastardson:
No one is saying anything about Ellah Lakes.. All so quiet about it.

Valuation of your Ellah Lakes -
Many stock traders and even short/medium term investors mostly shy away from stocks like ellah lakes because it is hard to value or measure due to little or no revenue and profit but the good news is that anything and EVERYTHING has value and can be measured.....ANYTHING .. from accidental cars, scraps, rags, feaces / human waste....anything, just anything.
Ellah Lakes falls into stage 1 or 2 of corporate/business cycle and the characteristics are - little or no revenue, no gross profit down to negative or expanding operation loss and loss after tax plus expanding/diluting outstanding shares.
This is the terrain of Venture Capitalist and not traders or investors until it starts declaring revenue and profit.
So how do we value a non-profitable company/stock? or a stock not generating income? One out of the best valuation tools in our valuation box that fits this class of stock is TAM - Total Addressable Market
According to the picture attached below, Ellah Lakes management goal and objective is to capture 20% of nigeria government annual import bill of $10b 20% of which is $2b through palm oil plantation and processing, maize, soyabeans, cassava and rice
See ellah lakes as a business introduced to you by a friend to run together and won't generate income for some years before becoming profitable - first 1 - 5 years will be burning money on wages, building, planting etc without any income coming in, so it is an investment for mostly people with patient fund or reserved funds while they use bult of their money to do other things or investment.
Future market Cap of Ellah Lakes = TAM x Estimated Market share x Estimated Profit Margin x Estimated Future P/E
TAM = $10b annual nigeria goverment import bill
Estimated market share = while Ellah Lakes manage says they can achieve 20% of TAM which is $2b, i think they can only achieve 5% of TAM = $500m
Est. PM = using Presco (40) and Okomu (24) as reference, i will keep my PM low to 15
Future P/E = Okomu (15.5), Presco (8.4), avg. NGX ASI (10) as reference, i will pick 10
So
(a) Future Mkt Cap = $10b x 5% x15% x 10 = $750m and this is under normal condition (100% base Market Cap)
Assuming we are wrong with our calculations and then we have a bear market 50% of market cap
Then
(b) Future Market Cap (50% bear) = $5b x 2.5% x 7.5% x 5 = $50m
If we experience a bull market of 50% more market cap,
Then
(c) Future market Cap (150% bull) = $15b x 7.5% x 22.5% x 15 = $3.8b

To be continued to avoid long write-up