PPB Group Berhad (KLSE:PPB) - Share price, News & Analysis

Q: What is the Fair Price of PPB when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

PPB (MYR15) is trading above our estimate of [[fair value]] (MYR9.17)

PPB fundamental analysis
Snowflake Score
Valuation	2/6
Future Growth	1/6
Past Performance	2/6
Financial Health	3/6
Dividends	3/6

PPB Stock Overview

PPB Group Berhad, an investment holding company, engages in grains and agribusiness worldwide.

Rewards

Earnings are forecast to grow 8.98% per year

Risk Analysis

Dividend of 2.33% is not well covered by earnings

PPB Group Berhad Competitors

Nestlé (Malaysia) Berhad

KLSE:NESTLE

RM31.3b

QL Resources Berhad

KLSE:QL

RM12.7b

Dutch Lady Milk Industries Berhad

KLSE:DLADY

RM2.1b

Guan Chong Berhad

KLSE:GCB

RM2.7b

Price History & Performance

Summary of all time highs, changes and price drops for PPB Group Berhad
Historical stock prices
Current Share Price	RM15.00
52 Week High	RM18.72
52 Week Low	RM14.90
Beta	0.21
1 Month Change	-12.79%
3 Month Change	-12.08%
1 Year Change	-18.48%
3 Year Change	-19.18%
5 Year Change	6.26%
Change since IPO	689.48%

Recent News & Updates

Jun 27

We Think PPB Group Berhad (KLSE:PPB) Has A Fair Chunk Of Debt

David Iben put it well when he said, 'Volatility is not a risk we care about. What we care about is avoiding the...

May 31

Here's What's Concerning About PPB Group Berhad's (KLSE:PPB) Returns On Capital

When it comes to investing, there are some useful financial metrics that can warn us when a business is potentially in...

Shareholder Returns

	PPB	MY Food	MY Market
7D	-5.3%	-2.1%	-0.9%
1Y	-18.5%	-1.0%	-7.7%

Return vs Industry: PPB underperformed the MY Food industry which returned -1.8% over the past year.

Return vs Market: PPB underperformed the MY Market which returned -8.7% over the past year.

Price Volatility

Is PPB's price volatile compared to industry and market?
PPB volatility
PPB Average Weekly Movement	3.2%
Food Industry Average Movement	5.0%
Market Average Movement	5.6%
10% most volatile stocks in MY Market	11.4%
10% least volatile stocks in MY Market	2.8%

Stable Share Price: PPB is less volatile than 75% of MY stocks over the past 3 months, typically moving +/- 3% a week.

Volatility Over Time: PPB's weekly volatility (3%) has been stable over the past year.

About the Company

Founded	Employees	CEO	Website
1968	4,218	Soon Lim	https://www.ppbgroup.com

PPB Group Berhad, an investment holding company, engages in grains and agribusiness worldwide. It operates through six segments: Grains and Agribusiness, Consumer Products, Film Exhibition and Distribution, Environmental Engineering and Utilities, Property, and Other Operations. The company is involved in the flour milling; manufacture of animal feed; trading of wheat and maize; oil palm plantations; and production of day-old chicks, eggs, and other related downstream activities.

PPB Group Berhad Fundamentals Summary

How do PPB Group Berhad's earnings and revenue compare to its market cap?
PPB fundamental statistics
Market Cap	RM21.34b
Earnings (TTM)	RM1.40b
Revenue (TTM)	RM5.12b

15.3x

P/E Ratio

4.2x

P/S Ratio

Is PPB overvalued?

See Fair Value and valuation analysis

Earnings & Revenue

Key profitability statistics from the latest earnings report
PPB income statement (TTM)
Revenue	RM5.12b
Cost of Revenue	RM4.73b
Gross Profit	RM394.41m
Other Expenses	-RM1.00b
Earnings	RM1.40b

Last Reported Earnings

Mar 31, 2022

Next Earnings Date

n/a

Earnings per share (EPS)	0.98
Gross Margin	7.70%
Net Profit Margin	27.28%
Debt/Equity Ratio	5.9%

How did PPB perform over the long term?

See historical performance and comparison

Dividends

2.3%

Current Dividend Yield

36%

Payout Ratio

We’ve recently updated our valuation analysis.

Valuation

Is PPB undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

2/6

Valuation Score 2/6

Price-To-Earnings vs Peers
Price-To-Earnings vs Industry
Price-To-Earnings vs Fair Ratio
Below Fair Value
Significantly Below Fair Value
PEG Ratio

Key Valuation Metric

Which metric is best to use when looking at relative valuation for PPB?

Other financial metrics that can be useful for relative valuation.

The above table shows the n/a ratio for PPB. This is calculated by dividing PPB's market cap by their current preferred multiple.
What is PPB's n/a Ratio?
n/a Ratio	0x
n/a	n/a
Market Cap	RM21.34b

PPB key valuation metrics and ratios. From Price to Earnings, Price to Sales and Price to Book to Price to Earnings Growth Ratio, Enterprise Value and EBITDA.
Key Statistics
Enterprise Value/Revenue	4.4x
Enterprise Value/EBITDA	160.8x
PEG Ratio	1.7x

Price to Earnings Ratio vs Peers

How does PPB's PE Ratio compare to its peers?

PPB PE Ratio vs Peers

The above table shows the PE ratio for PPB vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
Company	PE	Estimated Growth	Market Cap
Peer Average	33.7x
NESTLE Nestlé (Malaysia) Berhad	52.2x	10.1%	RM31.3b
QL QL Resources Berhad	58.3x	15.0%	RM12.7b
DLADY Dutch Lady Milk Industries Berhad	8.5x	-23.7%	RM2.1b
GCB Guan Chong Berhad	15.6x	18.8%	RM2.7b
PPB PPB Group Berhad	15.3x	9.0%	RM21.3b

Forward PE

Price-To-Earnings vs Peers: PPB is good value based on its Price-To-Earnings Ratio (15.3x) compared to the peer average (33.7x).

Price to Earnings Ratio vs Industry

How does PPB's PE Ratio compare vs other companies in the MY Food Industry?

Price-To-Earnings vs Industry: PPB is expensive based on its Price-To-Earnings Ratio (15.3x) compared to the MY Food industry average (12.2x)

Price to Earnings Ratio vs Fair Ratio

What is PPB's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

PPB PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio	15.3x
Fair PE Ratio	23.2x

Price-To-Earnings vs Fair Ratio: PPB is good value based on its Price-To-Earnings Ratio (15.3x) compared to the estimated Fair Price-To-Earnings Ratio (23.2x).

Share Price vs Fair Value

What is the Fair Price of PPB when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: PPB (MYR15) is trading above our estimate of fair value (MYR9.17)

Significantly Below Fair Value: PPB is trading above our estimate of fair value.

Price to Earnings Growth Ratio

PEG Ratio: PPB is poor value based on its PEG Ratio (1.7x)

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Future Growth

How is PPB Group Berhad forecast to perform in the next 1 to 3 years based on estimates from 5 analysts?

Future Growth Score

1/6

Future Growth Score 1/6

Earnings vs Savings Rate
Earnings vs Market
High Growth Earnings
Revenue vs Market
High Growth Revenue
Future ROE

9.0%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts

Analyst Future Growth Forecasts

Earnings vs Savings Rate: PPB's forecast earnings growth (9% per year) is above the savings rate (3.6%).

Earnings vs Market: PPB's earnings (9% per year) are forecast to grow slower than the MY market (9.9% per year).

High Growth Earnings: PPB's earnings are forecast to grow, but not significantly.

Revenue vs Market: PPB's revenue (5% per year) is forecast to grow slower than the MY market (5.2% per year).

High Growth Revenue: PPB's revenue (5% per year) is forecast to grow slower than 20% per year.

Earnings per Share Growth Forecasts

Future Return on Equity

Future ROE: PPB's Return on Equity is forecast to be low in 3 years time (13.3%).

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Past Performance

How has PPB Group Berhad performed over the past 5 years?

Past Performance Score

2/6

Past Performance Score 2/6

Quality Earnings
Growing Profit Margin
Earnings Trend
Accelerating Growth
Earnings vs Industry
High ROE

4.4%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: PPB has high quality earnings.

Growing Profit Margin: PPB's current net profit margins (27.3%) are lower than last year (36.1%).

Past Earnings Growth Analysis

Earnings Trend: PPB's earnings have grown by 4.4% per year over the past 5 years.

Accelerating Growth: PPB's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: PPB had negative earnings growth (-8.8%) over the past year, making it difficult to compare to the Food industry average (35.1%).

Return on Equity

High ROE: PPB's Return on Equity (5.3%) is considered low.

Discover strong past performing companies

Financial Health

How is PPB Group Berhad's financial position?

Financial Health Score

3/6

Financial Health Score 3/6

Short Term Liabilities
Long Term Liabilities
Debt Level
Reducing Debt
Debt Coverage
Interest Coverage

Financial Position Analysis

Short Term Liabilities: PPB's short term assets (MYR3.9B) exceed its short term liabilities (MYR2.1B).

Long Term Liabilities: PPB's short term assets (MYR3.9B) exceed its long term liabilities (MYR548.5M).

Debt to Equity History and Analysis

Debt Level: PPB's net debt to equity ratio (0.3%) is considered satisfactory.

Reducing Debt: PPB's debt to equity ratio has increased from 1.2% to 5.9% over the past 5 years.

Debt Coverage: PPB's operating cash flow is negative, therefore debt is not well covered.

Interest Coverage: Insufficient data to determine if PPB's interest payments on its debt are well covered by EBIT.

Balance Sheet

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Dividend

What is PPB Group Berhad current dividend yield, its reliability and sustainability?

Dividend Score

4/6

Dividend Score 4/6

Notable Dividend
High Dividend
Stable Dividend
Growing Dividend
Earnings Coverage
Future Dividend Coverage

2.33%

Current Dividend Yield

Dividend Yield vs Market

Notable Dividend: PPB's dividend (2.33%) is higher than the bottom 25% of dividend payers in the MY market (2.15%).

High Dividend: PPB's dividend (2.33%) is low compared to the top 25% of dividend payers in the MY market (4.94%).

Stability and Growth of Payments

Stable Dividend: PPB's dividend payments have been volatile in the past 10 years.

Growing Dividend: PPB's dividend payments have increased over the past 10 years.

Earnings Payout to Shareholders

Earnings Coverage: With its reasonably low payout ratio (35.6%), PPB's dividend payments are well covered by earnings.

Cash Payout to Shareholders

Cash Flow Coverage: PPB is paying a dividend but the company has no free cash flows.

Discover strong dividend paying companies

Management

How experienced are the management team and are they aligned to shareholders interests?

9.6yrs

Average management tenure

CEO

Soon Lim (57 yo)

9.92yrs

Tenure

RM3,515,000

Compensation

Mr. Soon Huat Lim serves as the Managing Director for PPB Group Berhad. Mr. Lim held various senior executive positions in the Kuok Group of companies in Singapore, Thailand, Hong Kong, China and Indonesia...

CEO Compensation Analysis

Compensation vs Market: Soon's total compensation ($USD799.05K) is about average for companies of similar size in the MY market ($USD999.89K).

Compensation vs Earnings: Soon's compensation has been consistent with company performance over the past year.

Leadership Team

Experienced Management: PPB's management team is seasoned and experienced (9.6 years average tenure).

Board Members

Experienced Board: PPB's board of directors are considered experienced (9.8 years average tenure).

Ownership

Who are the major shareholders and have insiders been buying or selling?

Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.

Data	Last Updated (UTC time)
Company Analysis	2022/06/27 00:00
End of Day Share Price	2022/06/27 00:00
Earnings	2022/03/31
Annual Earnings	2021/12/31