NATBIO Update

NATBIO released 4th qtr and full year till Feb 2008 results today. Extracts and quick analysis:

4th qtr PAT: $11mil 2007/08 PAT: $39.9mil
Cash & FD: $69mil
(1) Cash & FD per share: $0.23
(2) Net cash (-LT & ST borrowings): $52.4mil
(3) Net cash per share: $0.175
(4) Closing price (29 April '08): $o.815

2007/08 EPS: $0.133 per share
Mkt px adjusted for (1) and (3): $0.585 --- $0.64
2007/08 trailing PE adj for (1) and (3): 4.39x --- 4.81x
2007/08 trailing PE (no cash adj): 6.12x

High level of earnings maintained steadily over last few quarters, with slight improvement even. This comes in face of mounting competition and considerable money spent on advertising & promotions (ie. high A&P expenses). Trying to grow exports aggressively (8 countries now, compared to 2 before. Gunning for another 3 this year). Major shareholders and directors buying shares aggressively end-2007 at much higher prices. Seem to have stopped as stock price keeps sliding no matter how good the earnings. However, don't see any selling either. Maybe just as puzzled as I am as to why market consistently gives it such a low valuation.

Ok, try to sort it through. Biggest challenge is undoubtedly competition. Flood of copycat products in the market now, from Old Town to Nescafe 3-in-1, to Aik Cheong to whatever Ah Kow & Ah Mau brand. Crunch is, how much longer can NATBIO keep spending and spending on A&P, especially compared to big boys like Nestle? Will have to bet on exports growing strongly, along with new choco and cereal products launched. Honestly, their canned energy drink tastes like s**t to me. Should put more R&D into it. Of $40mil of IPO proceeds meant for A&P, only $9.35mil used so far, so $30.6mil left... looks like can still tahan for a few more years.

End of the day, PE of 4.4 to 4.8x after adjusting for cash seems damn cheap. Ignore cash and PE rises to a still cheap 6.1x .... worth holding lah. Just declared 4c div, amounting to 4.9% yield based on today's close. Maybe PE low for a reason I don't know? Maybe lor...

/ichithekiller

US Tax Rebates Ahead of Schedule

Interesting article this.... (excerpts). Link to full article below.

Tax rebates to start arriving Monday
Treasury Department says it will deposit the first 800,000 rebates - five days earlier than expected - in effort to boost economy.

By Catherine Clifford, CNNMoney.com staff writer
Last Updated: April 24, 2008: 5:53 PM EDT

NEW YORK (CNNMoney.com) -- The federal government, eager to boost the flagging economy, will start distributing special tax rebates on Monday - five days earlier than expected, the Treasury Department said Thursday.

The department had said last month that it would begin giving rebates on May 2.
Instead, 800,000 tax filers daily will get rebates on Monday, Tuesday and Wednesday. No rebates will be distributed on Thursday, and 5 million payments will be made on Friday.

Overall, the Treasury will distribute more than $110 billion to 130 million taxpayers by July and hopes to get the first $50 billion out by the end of May, DeSouza said.....

Link: http://money.cnn.com/2008/04/24/pf/taxes/Stimulus_checks/index.htm?postversion=2008042417

Hmmmm ......