₦airaland Forum

You have to admit, though, that such high-frequency trading is a little unusual. Can you enlighten us on why you trade so frequently? Or are you managing other people's money and getting paid by trading? What are we missing?

awesomeJ:
It's not an attack.
It's a clarification that his proposed analysis is completely useless to me.

If I couldn't assess my performances, I wouldn't be trading N1bn, paying N12m in fees every quarter without going back to the village.

Somebody failed at trading, but somehow he thinks he's the one who can help me assess my performance, you sef think am.

Lol. Or price manipulation in advance of a large, follow-on private placement or debt raise. Who knows which?

No disrespect, but you are too optimistic about this stock. A little cynicism is a good trait for an investor.

SonofElElyonRet:
I think it's logical to assume that Ellah's PO was fully subscribed until the contrary is proven. The price action shows confidence in the stock by the "more informed" and "privileged insiders"

Why not try to justify your optimism? Markets rise and markets fall, doesn't mean your "calculations" were correct. When do you expect DS to turn positive, and what's your EPS projection for 26/27?

aj8:
DS, first target hit. Hold on till the second target of 89. We are well within our 6 months target. As long as a company’s statement of account is accurate and recognizes it's losses in her return to profit, the targets based on the calculations will hit if no significant negative economic down turn.

... I guess it's making some sense even if not a lot of sense.

So if Obi doesn't win, you go retire from trading be dat. Nwanna.

Streetinvestor2:
No new money into ngx till 2027 based on my political belief. I am only out to sell at any good opportunity and play game with the money to pull it out or put it in defensive stocks back as I don't plan to pay shishi as cgt to this present government..lo.Those stocks will save as my bank till 2027.They say thr yeye file is six months into next yr so it is a goal because may 29 go don pass too

Let's see the public offer performance first na.

SonofElElyonRet:
Still looking for Ellah at N6?

@EDUECO

No harm, no foul. Do your thing. You're clearly a sophisticated investor.

Sometimes when we respond, we do so for the benefit of others who lack market knowledge and don't have your experience. Make dem no follow you jump blindly into the abyss without backup parachute.

nosa2:
I understand your points but I don't agree. Anyway let's focus on making money

"Paper profit" is a loose term. Better to say that non-fee bank profits are more subject to revisions than those of other operating companies. It's the nature of the business. All things being equal, N1 in Nestle profit is worth more than N1 in Zenith profit, and their shares are valued accordingly.

Look elsewhere if you still dey vex: JP Morgan, a too-big-to-fail commercial bank in the US, also trades at a discount to the S&P 500.

But me too I bought some bank shares when they dipped last year sha...

nosa2:
Lets be watching.

Virtually every reason I have heard is based on historical conditions that no longer exist. EVERY SINGLE ONE!!!!

Oh then there is the asinine reason that banks make paper profit. Na that one off me pass

Abeg, how do you model EBITDA for VFD?

crownprince2017:
If VFD group was able to raise the full 50b via the right issue and used the money as planned 2026 will be a banger.
Their ebitda tell an interesting story.
It's going to be more juicy if the interest rate cut happens steadily or aggressively.


This is my second call this year after fidson as they both faced similar problems in 2025.

DD please.

Sunrisepebble any hint on any company 2025 fy report. I'm waiting eagerly.


Agba, should we still wait for ASI at 1300 or goal post don shift..

Realized capital gains only, right? Do you have an annual filing requirement if you don't sell?

pluto09:
Your tax is an annual event.
You will declare what you invest and what is your profit at the end of the year.
Then tax will be calculated based on your annual profit.

Ha. This. Thanks.

chimex38:
from the NGX notice.
It seems they've already gotten the approval of shareholders as at May 2024.

Therefore, this current ₦10bn capital raise is included in the $750million capital raise approved by shareholders as at May 2024.
Method: RI, PO, PP, etc

The Board has just been executing this $750m raise in tranches.
1st and 2nd tranche was securing GTBank's capital raise from the same $750m lump sum using combination of methods.

Also, methods and Equivalent currencies can also be used to raise the total $750m approved capital.
In this latest tranche 3 raise, it's Private placement and Naira respectively.

The ₦10bn raise is capital requirement for financial holding companies(FHCO).
in this case GTCO.

It doesn't seem like a new proposed offer from no where.

It stinks, but shareholders approved private placement as one vehicle for capital raise. Maybe we need more shareholder activism in the NGX.

Streetinvestor2:
It is absolutely wrong. Let the person buy at market price of the floor if 10 billion is small money. That means they are discounting it for an insider.
Why should it be so.Is it not on the floor otedola has been buying FBNH

Earnings quality. I don't know about the 30-50% haircut, but true true a lot of bank earnings are paper earnings subject to revisions, impairments, etc. So it's not a surprise they trade at a discount to the general market.

nosa2:
Why?

Lol. The rich don't care about the stupid ethnicity and religion they use to divide and conquer the poor. Only cold hold $$$ matters.

Raider76:
An unusual South to North switch

There's a comment in the Notes that says other products have similar margins/risk profiles, so if they're growing into new lines at same margins, yes it'd mean volume expansion.

awesomeJ:
Yes sir.

Looks more like volume growth though. From what people are saying.

You're right. I should've hedged a bit. It means either volume growth or inflation passthrough. Both still good, though, and indicate scaling, as bottom line is growing faster than top.

awesomeJ:
Constant gross margins doesn't imply volume growth. Do you mind elaborating on why you think it is?


I I bought something at 700k and sold for 1m, I would have sold with a 30% gross margin.

If that same thing now costs me 1.4m, and I sell for 2m. I would have had higher revenue and constant margin, but the higher revenue would be due to price hike wouldn't it?

There must be a different perspective you have to this. Please share.

Not if it keeps growing topline at 30+% at constant gross margins.

This indicates pure volume expansion and true scaling of the business. I don't get how it's doing this and how sustainable the growth is, so I'm not buying now. But I imagine people don't buy mattresses and pillows on the spur of the moment. There's something fundamental about this business that we're missing.

nosa2:
I am not saying the company is bad but the stock price reflects all that has been said. Buying at these levels is unwise

.

Great business. But I'm scratching my head wondering how the company is growing sales an astonishing 35% per year (with flat gross margins, meaning it's volume growth, not just price increases) in this challenging consumer environment.

The population is not growing that fast, so are we in a cyclical restocking of mattresses (say, every 10 years)?

emmanuelewumi:
Summary of Vitaform Nigeria Plc performance.

Looking at certain indices


Revenue N111 billion

Gross Profit N41 billion

Operating Profit N27 billion

NOPAT N21.4 billion

EBIT N27.8 billion

Profit after tax N14.5 billion

Equity N35.5 billion

Cash N9 billion

Debt N8.4 billion

Net debt: Cash is more than debt at an excess of N600 million

Invested Capital N43.9 billion

Capital employed N44.8 billion

Total Asset N65.3 billion

Operating cash flow N15.2 billion

Free Cash Flow N14.1 billion

Capital expenses N1.1 billion

Return on Capital Employed 62%

Return on Invested Capital 48.7%

Return on Equity 40.8%

Cash Flow Return on Investment 34%

Cash Return on Invested Capital 32.8%

Working Capital N36.5 billion

Net profit margin 13%

Operating Profit margin 24.3%

Gross margin 37%

Operating cash flow margin 13.7%

Free Cash Flow margin 12.7%

Capex/Sales 1%

Capex/OCF 7.2%

Gross Profit/ Total Asset 62.7%.


Vitaform is a well managed business

Emotional volatility? Because she's female? Chai, women haf suffered. Her objective analysis of subpar returns over 10+ years wasn't enough for you?

Mankind2024:
Watch the video. You'll notice that Madam Flo sold her FIRSTHOLDCO due to emotional volatility. She quit just as compounding was about to kick in, ultimately becoming a cautionary tale of letting emotions dictate decisions(Stupid Grit). If she'd overcome her fears, she might've emerged as a true example of resilience(Authentic Grit). I'll revisit this story in 18 months with a piece on "Lessons from Pa Emma's Disinvestment from ACCESS CORP" - a case study in patience and perseverance."

The problem is that people often use ChatGPT like a drunken man uses a lamppost: more for support than for illumination. You need to engage with the substantive issues and the logic of the discussion.

ositadima1:
Maybe it’s ChatGPT, maybe it’s me, it doesn’t change the substance of the points made in my post. We’re not here to compete, and this isn’t an exam where using tools is considered cheating. What matters are the reasons presented and what they translate to in your portfolio.

So, once again, it doesn’t matter what you think of me or the source of my post. As long as the reasoning is sound, that’s what should be addressed.

It would be nice if he had an informed opinion. The guy is known to post whatever ChatGPT spits out -- sometimes without relevant context or business intelligence (although, this time, I fear he's it's right).

Shalom428:
It is good to balance optimism with pessimism, so I welcome your opinion .

However, I did a lot of research before stating my 300+ , and double digits dividends in 5 years, all things being equal. Let's leave the rest to Mr. TIME.

Aren't you jumping the gun a little? Don't we first have to see how well the public offer went?

Princkez:
It will shock them...I still remembered that year FBNH was trading @#3, some were making fun of it but we were busy accumulating,see FBNH today....watch out for ELLAHLAKES next year.

I don't know about paying "any amount" as tax, but you will get no argument from me about the real challenge of official corruption in Nigeria. Personally, I think we're too docile as citizens; those crooks who steal our money and distract us with silly social issues should be looking over their shoulders when they go their village to display their ill-gotten wealth, or send their children to London and Switzerland on our dime.

But we are mixing the issues of how to collect taxes and how to use them.

mikeapollo:
And the revenue generated is then squandered by govt officials on lavish lifestyles in those modern economies?
Nigerians would be more than happy to pay any amount or percentage of their income as tax if there is proper use and accountability

100% agree on the bolded. I guess the challenge they're having is that not all NINs pay tax, and many TINs are associated with no or multiple NINs. Welcome to a crash course on how government functions across multiple administrations and between multiple layers of government (state vs federal).

deathwing:
There is BVN and NIN. These things are linked to biodata that is stored somewhere. Why do you even need another TaxID? Why is the BVN not the tax ID? Why is the BVN not the same as the NIN? Asking people to begin linking another number is bad user experience, bad planning and just shows that they are irresponsible with the previous numbers that we lined up to get years ago

Honestly, this is how it works in every modern economy. Even in the US, where privacy rights and suspicion of government are taken to an extreme.

You cannot tax what you cannot track.

mikeapollo:
That Taiwo guy should just stop talking; the more he talks, the more confused he sounds.
What is the essence of saying that all owners of bank accounts must provide and link their TIN to accounts?

Tell us more. Insurance is understandable given new law, recapitalization, but why pharma?

presiade:
Take pharma and insurance positions. NEIM, AII, MANS ...

Nacho's toll-booth-like business and high investor return are to be admired, but I think the question is whether their forecast to quadruple revenue in four years is credible.

Maybe someone who knows the industry well can throw some light.

emmanuelewumi:
This is management revenue projection.

Although the revenue in the first 9 months of the year is N47 billion, if we annualize it that will give us a full year revenue of N63.5 billion, the last quarter revenue is always the highest as per revenue or profit so it is possible to meet management forecast for 2025

Of course. See below. It's been a minute, so unfortunately I can't pinpoint the specific timestamps. Ellah also has an extensive video (I think it was on Spaces) where they also discuss some yield and pricing metrics, but I don't have it now.

https://www.youtube.com/live/QkhkypbU3Qg?si=dMbhCNTgv5hQhGDP

Here are some of my notes on oil palm economics from the events:

Cultivation
Harvested year round: Highest yielding oil, 5-10x more than rapeseed, sunflower, soy
- 4-5 years to cash flow
- 9 years to peak production
- 25 years to maturity
- Replant at year 30
- Spacing 9m on center

Yield
• Fresh Fruit Bunches (FFB): 20-25 tons per ha
(Presco currently at 12.8 tons, going to 14 tons)
• Crude Palm Oil (CPO): 3.74 metric tons per ha

Price
• FFB: ~N200k per ton
• CPO: ~$900 per metric ton

NettyNelly:
Please can you share the YT video link

Last comment on this. You're the one asking for quantitative support. You've argued so much you've forgotten the initial issue: whether the ARPN acquisition was good value. We've demonstrated that it was priced at a premium to Presco, and that Ellah has few ways to recoup that premium at its current scale.

Except by marketing the transformational nature of the transaction to a willing audience of investors. And guess which agrobusiness CEO is always in the news?

ositadima1:
So you’re putting the burden of proof on me? You must be joking. Defend your own position and stand up to scrutiny, or let it rest.

Do some leg work. I've shown you how to do easy implied valuation. You can even prompt ChatGPT:

Assume the common commercially planted varieties and cultivation practices of oil palm. Quantify the difference in per-hectare yield between a plantation age 4 years and one age 8 years.

Do same for price differences in FFB vs crude palm oil.

ositadima1:
Can you stop going in circles and making the same points without any quantitative evidence, even rough assumptions? You haven’t provided any solid justification for your claim of a premium. You keep repeating the same arguments while avoiding the questions raised.

At the very least, Pa Emma would show his workings and numbers. You’ve successfully avoided doing that. Either present a quantitative case, even if it’s rough or half-baked, or let it rest.

Lol. ChatGPT will be the end of humanity.

Take some time to learn about the business. There's a YT video online where Presco's CFO discusses the economics of oil palm plantations. The differences in yield based on plantation age, and in margin based on revenue mix, are not qualitative. They're real money, and massive numbers at that.

ositadima1:
I agree that using comparables makes sense when we don’t have detailed cash flow data, but only if the differences are actually quantified. Right now, your claim of a “premium” is based on qualitative points like plantation age, yield, and processing capacity, without showing how those differences affect cash flow timing, required capex, or returns.

A younger plantation with lower current yields is not automatically worth less on a DCF basis. Its value depends on how quickly yields ramp up and on the buyer’s cost of capital. Also, this is a control acquisition, not a minority investment, so it shouldn’t be priced the same way as a liquid public share like Presco.

The real issue isn’t whether ARPN looks expensive compared to Presco at a glance, but whether reasonable assumptions about yield growth and capital costs make the deal value-creating for Ellah. Without even a rough framework for those assumptions, calling it “overpayment” is still an assumption, not a conclusion.

It was not intended as an insult like that, but if that's how you took it, I apologize. I thought this was a settled matter, and you were just being argumentative.

You're right that we can't run a DCF on this because we're not privy to the cash flow numbers. That's why we use alternative analyses like implied valuation using publicly traded comparables.

You calculated (assuming you'd used the correct plantation size) that ARPN was valued at a similar price per hectare as Presco -- but we know qualitatively that ARPN has a much lower plantation yield (lower average plantation age) and no value-adding post-harvest processing. That implies a premium valuation to Presco -- just like we'd conclude if we ran a DCF. If you really care, we can quantify that premium, but it'd be a premium nonetheless.

That conclusion is hardly surprising. Business intuition tells us that oil palm assets are now hot-ticket ones, so it'd actually be surprising if a large plantation did not command a price premium today.

So the question now is, how does Ellah make up that premium over fair value? Another way to look at this is to ask: Why would a rational investor buy ARPN at the same price as Presco's shares today given the implied valuation? Illiquid ARPN should actually trade at a discount to Presco. Why not just buy Presco?

Does that make sense?

ositadima1:
Once you start with insults, you signal that you lack the numbers to let the data speak for itself. The only relevant question is whether the discounted future cash flows of ARPN exceed the acquisition price at Ellah’s cost of capital. Without numbers, claims of “overpayment” are nothing more than baseless opinions.

You implicitly admitted with presco that price alone does not determine value; execution and capital structure do. The same standard must therefore be applied to Ellah.

Until then, this debate is not about valuation, it is about emotional bias.