₦airaland Forum

Please could you explain how to get justified PB ratio from ROE?

emmanuelewumi:
Based on the latest market update sent to me by United Capital the average

Price Book ratio on NGX is 2.2

Average Price Earning ratio is 11.1


Based on Graham's model, at a price book ratio of 2.2 the average return on equity should be 16%.

Based on an average return on equity of 16% the justified average Price Earning ratio on NGX should be 13.75.


With the current average PE of 11.1 the ASI will need to increase by 24% to have an average Price Earning ratio of 13.75 or ASI of 78,000.

Considering the current yield in the bond market, the expected increase of 24% will be discounted to 20.5% by using the average yield on a 10 year bond and the current yield on a 10 year bond.

So we should be looking at ASI of 75,000 for the NGX to actualize its intrinsic value.






I will advise people to look into stocks whose unleveraged return on equity is more than 16% although 20% and above is preferable and currently have a Price Earning ratio of 12 and below.




My opinion though.



Please do your due diligence

Mankindman:
Only stock that defiled and resist Tinubull is INTBREW
This stock destroy sentiment, TA, FA.
Corruption at it's peak. Yearly Red flags.
About 3 years ago, INTBREW was able to raise N165 billion through the sale of 18.3 billion units of ordinary shares of 50 kobo each at N9.00 per share to its existing shareholders in December 2019, thereafter, the share has been plummeting and sometimes inertia. Nothing to show for the minority shareholders that participated in the rights issue, rather the company report losses upon losses 📉 😢 🤣 😔 😪 😤 📉. Loss + loss=net loss. Year in, year out. No wonder Soludo says The Peter Obi investment in INTBREW worth next to Nothing.
The 18.3 B units that was fully subscribed in Dec 2019 @N9 per unit now worth N72.3B from N165B.
I can beat 💓 my chest and conclude that Mr Time is not in favour of this badly manage company.
Very shameless company, coming out yearly to announce net loss.
Make the majority owners surrender this company to people wey Sabi run brewery business.
Net loss is anti TA, anti FA, anti SA.
I do not know if investors ever read about the company they are putting their money on!
For FTNCOCOA, the news has been there since 2017/18 that some foreign investors wanted to take over the company, this eventually happened.
For JAPAUL, the news has always been there that the majority owner wanted to diversify to mining and bring in foreign partners and investors, For CHAMS, most conservative analysts put the trailing and forward PE above the current Market price.
The graph of INTBREW is nauseating, always return a bad candle and stick patterns.
I haven't seen 2 out of 10 TA experts agreeing on buy, sell, hold.
It looks as if the company doesn't have a product they are selling, while in reality most of their products compete favorably with Guiness and NB products.

Insightful. Can't agree less. However, if this bull run continues unbridled till end of this year, don't be surprised to see IB, NOTORE and others just begin to move too on general market traction, though not very far.

Wonderful posts this weekend. But I just dey imagine wetin go happen to fbnh tomorrow.
Mind you, due to the closed period, the directors and some other stakeholders cannot buy until results are out.
Will they use shadow companies to do so?
Hmmmm wahala dey oh.
Disclaimer: I am available to be used by any director(at a small fee sha)

DANGCEM
Share buy-back tranch 1..
- Commencement date: July 17, 2023
- Duration: 2 days (17th & 18th July)
- Tranche size: 168.73 million (representing 1% of total fully paid up ordinary shares)

https://doclib.ngxgroup.com/Financial_NewsDocs/38933_DANGOTE_CEMENT_PLC-DANGOTE_CEMENT_PLC_SHARE_BUY-BACK_PROGRAMME_-_TRANCHE_I_CORPORATE_ACTIONS_JULY_2023.pdf


* World bank to boost Nigeria's electrification with $750M..
https://guardian.ng/business-services/world-bank-to-boost-nigerias-electrification-with-750-million/


* FBNH: Notification of acquisition of substantial shareholding by Barbican Capital......A company owned by Oba Otudeko's children...
https://doclib.ngxgroup.com/Financial_NewsDocs/Notification_on_Substantial_Shareholdings_Barbican_Capital_Ltd.pdf

MeezPat:
Please could you explain how to get justified PB ratio from ROE?

ROE-sustainable growth rate/ Required return - sustainable growth rate.

I use 16% as my required return or the current yield on a long term FGN bond, whichever is higher. In a situation whereby the sustainable growth rate is higher than the required return. I will simply divide the difference between the ROE and sustainable growth rate by 5

If only you could keep out politics from your post, Maybe, just maybe, you would be taken more seriously. For you who came out a couple of days ago and praised the holders of TRANSCOHOTEL for being steadfast, You have come out to rubbish a company that has an affiliation with the biggest brewer in the world Ab Inbev Nigeria Holdings Bv. I had to go through most of your posts and realized there was so much emotional analysis in your write-up because of your political affiliation. You went further trying to justify your write-ups with some moribund companies that have experienced the so-called "Tinubu Bounce." At the end of the everyone here is the CEO of his/her portfolio. I am not invested in IB, but I think it's very disingenuous to bring political analysis to rubbish a company. I may not post here regularly, but I am as old as this thread. There are over 200 companies in the NGX . If you do not have anything nice to say about some of them, say something nice about the one you like and is well-run. At the end of the day, the market will decide. As you have come here to rubbish IB, some other analysts have waxed lyrical about the same company. Time will tell who is right or wrong. In investing, the only right approach, be it FA, TA, SA or CA., is making money and taking your profit.

Mankindman:
Only stock that defiled and resist Tinubull is INTBREW
This stock destroy sentiment, TA, FA.
Corruption at it's peak. Yearly Red flags.
About 3 years ago, INTBREW was able to raise N165 billion through the sale of 18.3 billion units of ordinary shares of 50 kobo each at N9.00 per share to its existing shareholders in December 2019, thereafter, the share has been plummeting and sometimes inertia. Nothing to show for the minority shareholders that participated in the rights issue, rather the company report losses upon losses 📉 😢 🤣 😔 😪 😤 📉. Loss + loss=net loss. Year in, year out. No wonder Soludo says The Peter Obi investment in INTBREW worth next to Nothing.
The 18.3 B units that was fully subscribed in Dec 2019 @N9 per unit now worth N72.3B from N165B.
I can beat 💓 my chest and conclude that Mr Time is not in favour of this badly manage company.
Very shameless company, coming out yearly to announce net loss.
Make the majority owners surrender this company to people wey Sabi run brewery business.
Net loss is anti TA, anti FA, anti SA.
I do not know if investors ever read about the company they are putting their money on!
For FTNCOCOA, the news has been there since 2017/18 that some foreign investors wanted to take over the company, this eventually happened.
For JAPAUL, the news has always been there that the majority owner wanted to diversify to mining and bring in foreign partners and investors, For CHAMS, most conservative analysts put the trailing and forward PE above the current Market price.
The graph of INTBREW is nauseating, always return a bad candle and stick patterns.
I haven't seen 2 out of 10 TA experts agreeing on buy, sell, hold.
It looks as if the company doesn't have a product they are selling, while in reality most of their products compete favorably with Guiness and NB products.

yMcy56:
DANGCEM
Share buy-back tranch 1..
- Commencement date: July 17, 2023
- Duration: 2 days (17th & 18th July)
- Tranche size: 168.73 million (representing 1% of total fully paid up ordinary shares)

https://doclib.ngxgroup.com/Financial_NewsDocs/38933_DANGOTE_CEMENT_PLC-DANGOTE_CEMENT_PLC_SHARE_BUY-BACK_PROGRAMME_-_TRANCHE_I_CORPORATE_ACTIONS_JULY_2023.pdf

1% buyback ... Alhaji spend this moolah now!!!! was expecting higher % considering we have just two quarters before end of fiscal year... half bread is better than kpuff kpuff.. hopefully they get into the market more often to complete the buy back before end of fiscal year...

International Breweries go shock fa, ta and sa soon

Those who know me on this trend knows that I don't buy stocks when they are popular... I started buying ftn, champions at kobokobo chams, Japaul etc when they were all bad mouthed by even the ogas here

UkwuAmu:
If only you could keep out politics from your post, Maybe, just maybe, you would be taken more seriously. For you who came out a couple of days ago and praised the holders of TRANSCOHOTEL for being steadfast, You have come out to rubbish a company that has an affiliation with the biggest brewer in the world Ab Inbev Nigeria Holdings Bv. I had to go through most of your posts and realized there was so much emotional analysis in your write-up because of your political affiliation. You went further trying to justify your write-ups with some moribund companies that have experienced the so-called "Tinubu Bounce." At the end of the everyone here is the CEO of his/her portfolio. I am not invested in IB, but I think it's very disingenuous to bring political analysis to rubbish a company. I may not post here regularly, but I am as old as this thread. There are over 200 companies in the NGX . If you do not have anything nice to say about some of them, say something nice about the one you like and is well-run. At the end of the day, the market will decide. As you have come here to rubbish IB, some other analysts have waxed lyrical about the same company. Time will tell who is right or wrong. In investing, the only right approach, be it FA, TA, SA or CA., is making money and taking your profit.

Mankindman:
@Pa Emma the greatest of the greatest Akokites, I'm proud of you.
Weeks back I proposed ASI of 70,000 by December 2023.
NSEMPA labelled 🏷 me Mr Optimistic.
What work well for me in NSE, I use TA to surrender a position, FA to invest, SA to reinforce my investment position in Fundamental stocks.
I'm still Optimistic of ASI @70k at +/_ 5%
Using the combination of ongoing economic reform, Anticipation of Foreign Portfolio investors, Hedges for inflation, Expected competition between local and foreign Portfolio willinvestors, currency devaluation(Unification), Subsidy removal(Pump price increament), Any good news and additional good news from Aso Rock will add +/_ 1.5% to 3% daily to ASI.
If Tinubu wins at the Tribunal, the market rally post judgement will add at least 4% in the judgement week.
With all the above, patient self investors should position themselves for one of the biggest windfall in the history of equity investments.
The ice on the cake is coming, once the crude oil inflation strikes the market.
The inflation we are seeing now is (monetary)currency inflation due to post pandemic and the ongoing war in Ukraine that disrupt the World economy. The US treasury keeps increasing interest rate.
The World have under invested in crude oil exploration and production due to energy transition without the anticipation of Russia war, this has grossly impacted Global economy.
As at the time of drafting this more than 30 edge funds have placed a bet on crude oil inflation for 2023/24
We do not know the future but we can always seize the opportunity of today and face tomorrow.
The search for Warren Buffett type of stock in NGX is ongoing. It shall be announced with a strong sentimental back up.

.And if townhall looses to Atiku or obi which I believe, the market will see the real bull and ASI will hit 100k plus..

Any stock loved by Nsempa, just run away.It is always slow in movement.
Any stock hated or bad mouth, just watch it out.it rises fast.

We will see if international Brew will respond to bull in the coming days or not

locodemy:
Any stock loved by Nsempa, just run away.It is always slow in movement.
Any stock hated or bad mouth, just watch it out.it rises fast.

We will see if international Brew will respond to bull in the coming days or not

GOD bless you nwanne mmadu

I've always done most things as opposite of what is mentioned here... I'm disclosing how I run my investments gambles

Hello everyone!

The weekly report for NSE ASI activities for week ending July 7, 2023 is ready
Kindly find the link to the report below:

link: ==> https://drive.google.com/file/d/1kko1975C8w1uGPtUn_4zBu85CkUxQil5/view?usp=sharing

I hope it's working well!

Streetinvestor2:
.And if townhall looses to Atiku or obi which I believe, the market will see the real bull and ASI will hit 100k plus..

Bull na bull

Mankindman:
@Bullbear Market, I respect your indepth and unbias TA. You are indeed a guru in the field of TA. I do not know if you will agree with me on INTBREW. It has always been moving in a contrary pattern and outright rejection of TA.
We all know that Time is of essence. For now I see more dumping in the coming days
Most FA analysts recommend average of 5 years holding position, how many years will you recommend for INTBREW holders from TA point of view?
The TA analysis of projected future earnings is not encouraging.
However , we all know that with faith, the dead bone can rise again. The question mark is when?
With no whale coming to take over this living dead company for merger or outright delisting from the exchange, then the future is bleak.
Only the management know what they are up to.
Holders must be ready for the worst and hope for the best.
The OHLC shows a trap pattern of volatility, indecision, warning of potential upside down, uncertain momentum etc

You nailed it with that statement bolded. Management of Nigerian companies is a reflection of the rotten and decayed societal values. However, from the ongoing accumulations of the stock, I give the stock maximum of 2 years and you will likely not see it at that price again. I know value is important to FA, but TA is more of growth and IB is showing that potentials as was found earlier in stocks like JAPAUL, TRANSCOHOTEL, UNITYBANK etc. If Unity can be a performer today, then as you said, "the dead bone can rise again"

currentprice:
I think market reactions will go beyond TA this time.... normally am expecting strong pullback around 62 - 66k levels based on my chart. so fast to see 62k taken out easily, was expecting this by 3rd quarter. This month candle is crucial... watch out

now I see Mkt going beyond this levels. Mkt will continue reacting positively to any new announcement. many more to come

be ready to see many over-valued stock.

plan your investment, invest on your plan

_{^{we are making big money this year and beyond}}

@currentprice, I can assure you that all your actions and inactions are reflecting on the chart. So, nothing will go beyond TA this time
Yes, reversal could occur, but ongoing bullish sentiment favours the index to test 66k first.

I hope you're doing great? Quite a while.

Agbalowomeri:
At least your GTCo is back with a profit

Agba, good to read from you too! Welcome back.

locodemy:
Any stock loved by Nsempa, just run away.It is always slow in movement.
Any stock hated or bad mouth, just watch it out.it rises fast.

We will see if international Brew will respond to bull in the coming days or not

have you noticed the volume INTBREW has traded last 3-4wks?

BullBearMkt:
You nailed it with that statement bolded. Management of Nigerian companies is a reflection of the rotten and decayed societal values. However, from the ongoing accumulations of the stock, I give the stock maximum of 2 years and you will likely not see it at that price again. I know value is important to FA, but TA is more of growth and IB is showing that potentials as was found earlier in stocks like JAPAUL, TRANSCOHOTEL, UNITYBANK etc. If Unity can be a performer today, then as you said, "the dead bone can rise again"

International Breweries go shock us all... I'm happy I'm heavily on it and some others

UkwuAmu:
If only you could keep out politics from your post, Maybe, just maybe, you would be taken more seriously. For you who came out a couple of days ago and praised the holders of TRANSCOHOTEL for being steadfast, You have come out to rubbish a company that has an affiliation with the biggest brewer in the world Ab Inbev Nigeria Holdings Bv. I had to go through most of your posts and realized there was so much emotional analysis in your write-up because of your political affiliation. You went further trying to justify your write-ups with some moribund companies that have experienced the so-called "Tinubu Bounce." At the end of the everyone here is the CEO of his/her portfolio. I am not invested in IB, but I think it's very disingenuous to bring political analysis to rubbish a company. I may not post here regularly, but I am as old as this thread. There are over 200 companies in the NGX . If you do not have anything nice to say about some of them, say something nice about the one you like and is well-run. At the end of the day, the market will decide. As you have come here to rubbish IB, some other analysts have waxed lyrical about the same company. Time will tell who is right or wrong. In investing, the only right approach, be it FA, TA, SA or CA., is making money and taking your profit.

You are here attacking the messenger instead of you to scrutinize the message. My view on INTBREW is not political, but from a contrarian self investor point of view.
I had taken time to analyze available information on the web regarding the company.
I had reviewed TA and FA experts view concerning this company.
The chat do not lie. The summary of charts from 2017 till date shows uncertainty.
I understood the company is running a
long-term performance and compounding growth model which I believe will do another Oando magic against minority investors, At the time of rewarding these steadfast Nigerians, the majority owners might just delist the company. Otherwise, it is unexplainable for a listed company that rakes in over N230B/annum to be declaring net loss for 5 consecutive years. This alone is a Red flag.
Hence, the uncertainty surrounding this company with growing sales but nothing to show for ordinary shareholders. One actually need to know if the net yearly net loss was not deliberate, coz most time it is the cost of sales that wipes off the generated cash.
I deserve an apology from you for your careless utterance that I rubbish a listed company. The company should as a matter of fact tender an unreserve apology to all shareholders.
You are so emotional that you cannot see a bad financial report on the graph.
Is it not deliberate that this company is trying to keep the share price static at sub N6 for a possible buyout of the available 2B units on the exchange?
Coz this is what Wale et al did.
The other stocks you mentioned often shows investors momentum and recedes, which is expected in penny stocks .
Lastly, I had only say the raw fact, can't rubbish a company with N139B market capitalisation received N169B at rights offer in Dec 2019, the parent company invested over $100M dollars in Shagamu plant.
Who is not aware that INTBREW should not be trading below N50/share considering the grossly undervalued assets on ground which the company claims is depreciating if not a possible Oando Magic, Ardova Magic, Union Bank Magic.
This pattern of suppressing the intrinsic value is common to all the mentioned companies.
For your information, I understand the NGX beyond the information you read from my post. I'm also as old as this thread.

megawealth01:
International Breweries go shock us all... I'm happy I'm heavily on it and some others

You need to pray daily that the majority owner do not delist this grossly undervalued company at the time of Harvesting.
This is the likely shock minority shareholders would see.

BullBearMkt:
You nailed it with that statement bolded. Management of Nigerian companies is a reflection of the rotten and decayed societal values. However, from the ongoing accumulations of the stock, I give the stock maximum of 2 years and you will likely not see it at that price again. I know value is important to FA, but TA is more of growth and IB is showing that potentials as was found earlier in stocks like JAPAUL, TRANSCOHOTEL, UNITYBANK etc. If Unity can be a performer today, then as you said, "the dead bone can rise again"

My fear about this company is the grossly undervalued assets which some greedy majority investors are likely eyeing for themselves.
The Ilesha plant cannot be sold at less than N35B
The Port-hacourt plant should not be less than N35B
The Onitsha plant should not be less than N40B
The new Shagamu plant $100M to $250M x old rate =N46B
The spirit distillery in PH at conservative value of $25M
Plus the N165B rights offer
Still yet, the Market cap and declared assets value are unimaginable low. This is the first red flag I noticed in the full financial statements of 2021, 2022 Still grossly under reported.
The 2nd was the available percentage of free float, far beyond the NGX recommendation of 20%.
International Breweries Plc (INTBRE.ng) Q12023 Interim Report

NECKLINE on INTBREW for your double bottom was 5.05 area.

Above average volume for the past 4 weeks

IF you are a cautious buyer, wait till 5.85 if you want to join them.

Be conscious of the price rejections (wick city is what I call them) for the past 5 weeks - seller waiting at 5.70 junction

Buy the rumour, sell the news is in play.

-No positions here.

Mankindman:
You need to pray daily that the majority owner do not delist this grossly undervalued company at the time of Harvesting.
This is the likely shock minority shareholders would see.

Na win win for me sha just like OANDO

thesilentone:
NECKLINE on INTBREW for your double bottom was 5.05 area.

Above average volume for the past 4 weeks

IF you are a cautious buyer, wait till 5.85 if you want to join them.

Be conscious of the price rejections (wick city is what I call them) for the past 5 weeks - seller waiting at 5.70 junction

Buy the rumour, sell the news is in play.

-No positions here.

Here is the letter I just sent to the Board Members of INTBREW today.
international.breweries@ng.ab-inbev.com

The Chairman, HRM. Igwe Nnaemeka A. Achebe
The Board Members
Richard Rivett-Carnac
Andrew Whiting
Ms Abiye Tobin-West
Mr Michael Ajukwu
HRM. Igwe Peter Anugwu
Mr Olugbenga Awomolo
Mr Sunday Akintoye Omole
Olutoyin Odulate
Muyiwa Awojimi
The Managing Director/s
International Breweries plc
Dear All,
I hope this letter finds you in good health and high spirits. I am writing to express my deep concern regarding the significant challenges that International Breweries has faced over the past five years, including consecutive net loses, an excessive cost of sales, and a continuous decline in market capitalisation
Firstly, it is disheartening to note the sustained net loses that International Breweries has encountered over the past five years (2018 to 2022).
As a concerned stakeholder with some million units which I have been averaging down the cost price from 2018 till date, I understand the difficulties and complexities of the market; however, such a prolonged period of negative financial performance raises serious questions about the company's overall strategic direction, financial management, and the effectiveness of its operational processes.
Furthermore, the humongous cost of sales is alarming and requires immediate attention.It is unexplainable and unacceptable how a company made revenue of N54.3B and spent N44.7B as cost of sales in unaudited 1st quarter 2023 report. No profitable company with minority shareholders interest does that and still remains in business. This is almost the highest among all the listed companies in NGX and a gross contradiction to your vision of responsible long-term performance and compounding growth model.
The escalating expenses associated with production, distribution, and marketing have likely contributed significantly to the company's financial struggles and this will negate your commitment to shareholders value. It is essential to thoroughly evaluate and optimise the cost structure to ensure sustainable profitability and improved financial results, otherwise I see INTBREW as a going concern that may eventually be delisted from the exchange and deeply hurt faithful and steadfast minority Nigerian shareholders who invested their life savings, sweat and blood in this promising but unrewarding company. There is nothing to celebrate in 5 years full financial statement (2018 to 2022).
The management are becoming a specialist in fabrication of yearly excuses that ranges from Forex difficult, high cost of manufacturing, Covid pandemic, High cost of finance and impairment, low consumer purchasing power as a result of inflation and high excise is already hinted for full 2023 financial report.

https://africanfinancials.com/international-breweries-plc-unaudited-condensed-financial-statement-analysis-a-look-at-q12023-interim-report/

https://businessday.ng/companies/article/international-breweries-loss-narrows-to-lowest-in-five-years/

Equally troubling is the dwindling market capitalisation of International Breweries. A decline in market capitalisation adversely affects the confidence of investors, stakeholders, and the general market sentiment towards the company. It is crucial to proactively address the factors that have contributed to this decline and develop a comprehensive plan to regain market confidence, stabilise the company's valuation, and ultimately create value for shareholders.

In light of these concerns, I would like to propose a few suggestions that may help alleviate the current challenges faced by International Breweries:

Conduct a comprehensive review and analysis of the company's strategic direction, operational processes, and financial management practices to identify areas for improvement and develop an effective turnaround plan.
Implement stringent cost-control measures to address the excessive cost of sales, identify cost-saving opportunities, and optimise operational efficiency throughout the value chain.

Strengthen the company's marketing and sales efforts to revitalise brand positioning, expand market reach, and drive revenue growth.

Enhance communication and transparency with shareholders and other stakeholders by providing regular updates on the progress made towards resolving the financial challenges, and sharing a clear roadmap for future growth and profitability.
Consider exploring potential partnerships, alliances, or strategic acquisitions that can help diversify the product portfolio, expand market presence, and drive revenue generation. I am of the believe that this should not be difficult to achieve, your products is doing well on the streets and compete favourably with the products of rival companies.

It is my sincere hope that these suggestions will contribute to the successful turnaround of International Breweries, and restore its position as a leading player in the industry. I firmly believe that with a proactive approach, effective management, and a commitment to progressive "Excellence", the company can overcome its current obstacles and regain its financial strength.

I kindly request you to consider the points raised in this letter and take appropriate action to address the issues that have been highlighted. As a stakeholder and supporter of International Breweries, I am eager to see the company emerge from this challenging period and achieve long-term sustainable success and give a lasting smile 😀😁😁😊☺️😀😀😁 on minority shareholders.
Thanks in anticipation of your attention to this matter. I would appreciate the opportunity to discuss these concerns further via email and offer any assistance or insights that may be helpful in the company's recovery efforts.
Yours sincerely,
Mankindman

Mankindman:
Here is the letter I just sent to the Board Members of INTBREW today.
international.breweries@ng.ab-inbev.com

The Chairman, HRM. Igwe Nnaemeka A. Achebe
The Board Members
Richard Rivett-Carnac
Andrew Whiting
Ms Abiye Tobin-West
Mr Michael Ajukwu
HRM. Igwe Peter Anugwu
Mr Olugbenga Awomolo
Mr Sunday Akintoye Omole
Olutoyin Odulate
Muyiwa Awojimi
The Managing Director/s
International Breweries plc
Dear All,
I hope this letter finds you in good health and high spirits. I am writing to express my deep concern regarding the significant challenges that International Breweries has faced over the past five years, including consecutive net loses, an excessive cost of sales, and a continuous decline in market capitalisation
...
Yours sincerely,
Mankindman

...highly commendable!

Mankindman:
Here is the letter I just sent to the Board Members of INTBREW today.
international.breweries@ng.ab-inbev.com

The Chairman, HRM. Igwe Nnaemeka A. Achebe
The Board Members
Richard Rivett-Carnac
Andrew Whiting
Ms Abiye Tobin-West
Mr Michael Ajukwu
HRM. Igwe Peter Anugwu
Mr Olugbenga Awomolo
Mr Sunday Akintoye Omole
Olutoyin Odulate
Muyiwa Awojimi
The Managing Director/s
International Breweries plc
Dear All,
I hope this letter finds you in good health and high spirits. I am writing to express my deep concern regarding the significant challenges that International Breweries has faced over the past five years, including consecutive net loses, an excessive cost of sales, and a continuous decline in market capitalisation
Firstly, it is disheartening to note the sustained net loses that International Breweries has encountered over the past five years (2018 to 2022).
As a concerned stakeholder with some million units which I have been averaging down the cost price from 2018 till date, I understand the difficulties and complexities of the market; however, such a prolonged period of negative financial performance raises serious questions about the company's overall strategic direction, financial management, and the effectiveness of its operational processes.
Furthermore, the humongous cost of sales is alarming and requires immediate attention.It is unexplainable and unacceptable how a company made revenue of N54.3B and spent N44.7B as cost of sales in unaudited 1st quarter 2023 report. No profitable company with minority shareholders interest does that and still remains in business. This is almost the highest among all the listed companies in NGX and a gross contradiction to your vision of responsible long-term performance and compounding growth model.
The escalating expenses associated with production, distribution, and marketing have likely contributed significantly to the company's financial struggles and this will negate your commitment to shareholders value. It is essential to thoroughly evaluate and optimise the cost structure to ensure sustainable profitability and improved financial results, otherwise I see INTBREW as a going concern that may eventually be delisted from the exchange and deeply hurt faithful and steadfast minority Nigerian shareholders who invested their life savings, sweat and blood in this promising but unrewarding company. There is nothing to celebrate in 5 years full financial statement (2018 to 2022).
The management are becoming a specialist in fabrication of yearly excuses that ranges from Forex difficult, high cost of manufacturing, Covid pandemic, High cost of finance and impairment, low consumer purchasing power as a result of inflation and high excise is already hinted for full 2023 financial report.

https://africanfinancials.com/international-breweries-plc-unaudited-condensed-financial-statement-analysis-a-look-at-q12023-interim-report/

https://businessday.ng/companies/article/international-breweries-loss-narrows-to-lowest-in-five-years/

Equally troubling is the dwindling market capitalisation of International Breweries. A decline in market capitalisation adversely affects the confidence of investors, stakeholders, and the general market sentiment towards the company. It is crucial to proactively address the factors that have contributed to this decline and develop a comprehensive plan to regain market confidence, stabilise the company's valuation, and ultimately create value for shareholders.

In light of these concerns, I would like to propose a few suggestions that may help alleviate the current challenges faced by International Breweries:

Conduct a comprehensive review and analysis of the company's strategic direction, operational processes, and financial management practices to identify areas for improvement and develop an effective turnaround plan.
Implement stringent cost-control measures to address the excessive cost of sales, identify cost-saving opportunities, and optimise operational efficiency throughout the value chain.

Strengthen the company's marketing and sales efforts to revitalise brand positioning, expand market reach, and drive revenue growth.

Enhance communication and transparency with shareholders and other stakeholders by providing regular updates on the progress made towards resolving the financial challenges, and sharing a clear roadmap for future growth and profitability.
Consider exploring potential partnerships, alliances, or strategic acquisitions that can help diversify the product portfolio, expand market presence, and drive revenue generation. I am of the believe that this should not be difficult to achieve, your products is doing well on the streets and compete favourably with the products of rival companies.

It is my sincere hope that these suggestions will contribute to the successful turnaround of International Breweries, and restore its position as a leading player in the industry. I firmly believe that with a proactive approach, effective management, and a commitment to progressive "Excellence", the company can overcome its current obstacles and regain its financial strength.

I kindly request you to consider the points raised in this letter and take appropriate action to address the issues that have been highlighted. As a stakeholder and supporter of International Breweries, I am eager to see the company emerge from this challenging period and achieve long-term sustainable success and give a lasting smile 😀😁😁😊☺️😀😀😁 on minority shareholders.
Thanks in anticipation of your attention to this matter. I would appreciate the opportunity to discuss these concerns further via email and offer any assistance or insights that may be helpful in the company's recovery efforts.
Yours sincerely,
Mankindman

Nice one,that is the way to go.


No need to be sentimental or emotional about your investment


I wrote similar letters to the management of Oando, when they did nothing i sold my holdings at an average price of N25 and moved on

Mankindman:
Here is the letter I just sent to the Board Members of INTBREW today.
international.breweries@ng.ab-inbev.com

My own is that INTBREW should bend down low.

Here's a rundown of what happened in the Nigerian stock market last week and what to expect this week.

https://twitter.com/quansimodo/status/1678275737755742209?t=hCUHtwoG3cpN-pqAYZYHqA&s=19

@Mankindman You have done very well. This is the kind of action we need on this forum. No sentiments.

Mankindman:
You need to pray daily that the majority owner do not delist this grossly undervalued company at the time of Harvesting.
This is the likely shock minority shareholders would see.

If they try it.That will be the first and only AGM I will attend. They will know that madman no be till you wear tear cloth

thesilentone:
NECKLINE on INTBREW for your double bottom was 5.05 area.

Above average volume for the past 4 weeks

IF you are a cautious buyer, wait till 5.85 if you want to join them.

Be conscious of the price rejections (wick city is what I call them) for the past 5 weeks - seller waiting at 5.70 junction

Buy the rumour, sell the news is in play.

-No positions here.

You are very correct. I was about to point that out myself. Looking at the volume profile from 2020 to 2022, there is a large volume between 5.8 and 5.5, which is likely where sellers have been queuing up to sell. Beyond 6, I still see some volume from before 2020 that may also want to sell. However, I think if it breaks 5.5 with strength, we may see it go above 7. Let's go!