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Sri Lanka Equity Forum » Stock Market Talk » Nation Lanka Finance PLC - Growing with stability

Nation Lanka Finance PLC - Growing with stability

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EquityChamp

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Moderator
Nation Lanka, hammered with impairments and deposit withdrawals following Golden key saga, is recovering slowly yet steadily. Their new business model has earned them a fantastic interest yield with a huge loan book growth. As some of you may aware now Nation Lanka has entered into the lucrative micro finance business and join hands with COCR, BIL and LOFC.

Just a summary of key financials with a conservative estimate for FY 2016/17 is given below.
Rs mn2014/15 A2015/16 A2016/17 F
Loans & Advances43895608          7,080
Growth in loans & advances64%28%26%
Interest income11652087          2,780
Growth in interest income29%79%33%
Interest yield33%42%44%
NPAT-429162              222
According to the above table you may seen the double digit growth in loans and advances with an interest yield of over 40%, a mark achieved by none other than BLI. You may recall my thread on benchmarking finance sector stocks where I showed BLI earning an interest yield of over 48% where as majority of other finance companies just generate a yield around 20%-25%. So in that sense you can get an idea as to how Nation Lanka will do in the future.

The above PAT was estimated based on very conservative assumptions of loan book growth and PAT margins yet they can generate an EPS of 30 cents for the next financial year which translates to a PE of 6x at the closing price of Rs1.8 but still trading at a discount to the industry PE benchmark. NAV tyrned to positive 1 in 15/16 from a negative 1 in 14/15.

So within 2 to 3  years this company generating a profit in excess of half a billion so that the price should reach Rs5/- which means a lucrative medium term investment for you.

Do your own analysis also to take an informed decision.

Thanks

stockback


Senior Vice President - Equity Analytics
Senior Vice President - Equity Analytics
I have analyse last two quarter financial report.

I feel they will produce 10-20 Cents for this quarter.

this is my Idea....

Bcz last quarter they made 8 Cents. I expect this time over 10 cents and bellow 20 cents.

maybe that is practical......

hiransilva23


Vice President - Equity Analytics
Vice President - Equity Analytics
EC meka tawa godak yanna puluwanda??malanga poddak tiyanawa.mokakda karanna one?any idea?

EquityChamp

avatar
Moderator
@hiransilva23 wrote:EC meka tawa godak yanna puluwanda??malanga poddak tiyanawa.mokakda karanna one?any idea?

Keep what you have. And if possible try to buy some possibly below 1.90 level.

EquityChamp

avatar
Moderator
The below is how the technical charts look like as of now. Technical charts indicates BUY and moving averages indicates Strong BUY. But better to have caution as well since RSIs shot up to 80 levels due to this weeks heat up. It is possible to break the psychological barrier of 2/- today but better to wait if you are unable to grab some below 1.90. In terms of financials the share is worth to have a mid term to long term bull run so keep that in mind as well specially when the share price declines.

Chinwi

avatar
Associate Director - Equity Analytics
Associate Director - Equity Analytics
So within 2 to 3  years this company generating a profit in excess of half a billion so that the price should reach Rs5/- which means a lucrative medium term investment for you.

I do not agree with this affraid

I need to know remaining impairment amounts they have to consider in next accounts.

If their impairment burden is mostly gone by now then the story will be much brighter in future.

If no impairments their Earnings per Share was about 83 cents without tax  for 2015/16 Y/Y .

Hence  my targets go to much upper ranges and it should reach  5 more fast. (low impairment assumed)

Teller

avatar
Moderator
How ever it take to another 4-5 years to remove retained losses from their balance sheet. If they can earn 200 million per annum with in 5 years losses will be zero . how ever they can accelerate their earnings easily as more than 5 billion loans and advances.
In that scenario it can touch easily 7.50 - 8 rupees.
For the short run 2.30 to 2.50 possible.

EquityChamp

avatar
Moderator
As predicted the psycological barrier of 2/- broken with great power. Seems like this run has a greator power than I thought. Anyway holders to keep your holdings tight. New commers to wait till the heat get reduced.

NZ BOY

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Moderator
My target 2.50 to 2.80 in this short term run

sharemarket

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Senior Manager - Equity Analytics
Senior Manager - Equity Analytics
@NZ BOY wrote:My target 2.50 to 2.80 in this short term run
RSI Very high wait & see.....

kassachandimal


Manager - Equity Analytics
Manager - Equity Analytics
EC is it good to grab some CSF @ 2 for short term ?

hiransilva23


Vice President - Equity Analytics
Vice President - Equity Analytics
Nz boy kiyana ganan target gana wadiya hitanna epa.e ganan walata yanne na.eya godak ewata target dunna.profit nam exit wena eka hondai wage.

NZ BOY

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Moderator
@hiransilva23 wrote:Nz boy kiyana ganan target gana wadiya hitanna epa.e ganan walata yanne na.eya godak ewata target dunna.profit nam exit wena eka hondai wage.
Davasin 2 n Shares up venna meka Casino neme

fireshelter

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Senior Vice President - Equity Analytics
Senior Vice President - Equity Analytics
Very Happy Very Happy

EquityChamp

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Moderator
@kassachandimal wrote:EC is it good to grab some CSF @ 2 for short term ?

Try below 1.90. My ideal target was to 1.5 or below but this one jumped up suddnely.

kassachandimal


Manager - Equity Analytics
Manager - Equity Analytics
Thanks EC

NZ BOY

avatar
Moderator
Im trying to buy 1.70 -1.80 good chance to buy now

hiransilva23


Vice President - Equity Analytics
Vice President - Equity Analytics
Be careful

gayanath1983

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Vice President - Equity Analytics
Vice President - Equity Analytics
yes seems like game over

gayanath1983

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Vice President - Equity Analytics
Vice President - Equity Analytics
my prediction was wrong...

stockback


Senior Vice President - Equity Analytics
Senior Vice President - Equity Analytics
@gayanath1983 wrote:my prediction was wrong...


maybe some one sold at 2.0 level continues selling. if not your target is reachable.

13 Million traded that is enough to reach 2.3  but its fail. maybe we have a chance to collect at lower

Chinwi

avatar
Associate Director - Equity Analytics
Associate Director - Equity Analytics
@EquityChamp wrote:As predicted the psycological barrier of 2/- broken with great power. Seems like this run has a greator power than I thought. Anyway holders to keep your holdings tight. Newcomers to wait till the heat get reduced.

මේක ගන්න  අය බයින් ප්‍රෙශර් එක පෙන්වන්නෙ නැතුව හෙමින් හෙමින් පොඩි ගොඩවල් වලින්  එකතු කරගෙන ගියා වෙන්න පුලුවන්. නමුත් 1.90 පන්නනකොට හියර් එක මාරු කරල ඔක්කොමලා ලොකු ගොඩවල් ගන්න පටන් ගත්ත​.

ඇත්තම කියනව නම් මේක දීර්ඝ කාලීනව ගන්න අයට 1.40 ද 2.00 ද 2.50 ද කියන එක ගැන වැඩිය හිතල වැඩක් නෑ. ඒ අය ටාගට් කරන්න ඕන ​50%, 100% නොවේ ඊට වඩා වැඩි දෙයක්.  

එනමුත් පන්නගෙන යන්නෙ නැතුව අඩු උනාම​ ගන්න තරමට රිස්ක් එක අඩුයි.

EquityChamp

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Moderator
Trust I have spoke enough of CSF and you all have saw the support provided @ 2/-. So finally CSF may see stabilising on a new support level.

EquityChamp

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Moderator
Still the buying interest is intact according to charts. The stock still at overbought situation.

troy

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Moderator
i think its good to enter now @ 1.80 1.90 level. can achieve 10% by day trading even.

NZ BOY

avatar
Moderator
Good price to enter

Teller

avatar
Moderator
CSF technically will drop to 1.50 levels. How ever 1.60 also good buy.

stockboy


Senior Manager - Equity Analytics
Senior Manager - Equity Analytics
never if it comes to 1.7 one buyer is waiting for buy 20 m shares

hiransilva23


Vice President - Equity Analytics
Vice President - Equity Analytics
Csf 1.20 ta 1.30 weli weli tibuna.eth kagewat loku intrest ekak tibune na.passe 2.10 tat giya.dan amaruwen 1.70ta 1.80 ganna hadanawa.mewa eka para wadi wenne kauru hari meka pitipasse inna nisane.meka honda wennat hexp honda nati wennat reason ekak kauru hari pahadili karanawada?me dekama honda stock 2k neda???

EquityChamp

avatar
Moderator
This depends on how you see a particular stock. if you analyse the past performance of the stock and how they are doing now then you can take a relatively measured view on any stock. If you put a heavy weight on future expectations regardless of what the company is doing now then you end up with a complete different picture.

Hayleys fibre recorded a continues decline in their revenue over tha past many years to date and the most worrying point is the revenue is still declining. Their main market segments are shrinking. Their profit margins are continue to come down meaning escalating cost.

Compared to Nation Lanka though two different industries, Nation Lanka experienced huge troubles with the Golden Key saga and they experienced loss of customer deposits, decline in the value of land portfolios, debtor writeoffs, etc. In 2014 and 2015 they went for two rights issues in serch of money to safeguard the lost capital due to many losses as above. In the FY 2015/16 they start producing profits with a growth quarterly. The interest income has gone up more than 50%. They have entered into the lucrative micro finance business too which yields them above average yields. On top of that their negative book value turned to positive. With this track record any investor can paint the future of this stock.

Therese are the main differences I can see in these two stocks.

In summary Hayleys Fibre shows a continuous decline in all key performance parameters up to now where as Nation Lanka once was nearing to bankruptcy have shown signs of recovery with a promising growth.

For your information I have positively written on the following stocks too. if you have time just search typing the company name.
Abans Electricals, Laxapana Batteries, TAFL, GRAN, BFL, Swisstek, Kelany tyres, ACL Cables, Kelani Cables, Stafford Hotels, Piguses Reef, Royal Ceramics, etc.

Thanks

Teller

avatar
Moderator
CSF has moved to super bubble pattern sub trend line (-) 0.2 , so there is a strong chance to come back 1.50 levels.
But due to new support it can STAY 1.60 levels for a long time.

NZ BOY

avatar
Moderator
@Teller wrote:CSF has moved to super bubble pattern sub trend line (-) 0.2 , so there is a strong chance to come back 1.50 levels.  
But due to new support it can STAY 1.60 levels for a long time.
Thank u Teller We can Collect more for mid term

NZ BOY

avatar
Moderator
@EquityChamp wrote:This depends on how you see a particular stock. if you analyse the past performance of the stock and how they are doing now then you can take a relatively measured view on any stock. If you put a heavy weight on future expectations regardless of what the company is doing now then you end up with a complete different picture.

Hayleys fibre recorded a continues decline in their revenue over tha past many years to date and the most worrying point is the revenue is still declining. Their main market segments are shrinking. Their profit margins are continue to come down meaning escalating cost.

Compared to Nation Lanka though two different industries, Nation Lanka experienced huge troubles with the Golden Key saga and they experienced loss of customer deposits, decline in the value of land portfolios, debtor writeoffs, etc. In 2014 and 2015 they went for two rights issues in serch of money to safeguard the lost capital due to many losses as above. In the FY 2015/16 they start producing profits with a growth quarterly. The interest income has gone up more than 50%. They have entered into the lucrative micro finance business too which yields them above average yields. On top of that their negative book value turned to positive. With this track record any investor can paint the future of this stock.

Therese are the main differences I can see in these two stocks.

In summary Hayleys Fibre shows a continuous decline in all key performance parameters up to now where as Nation Lanka once was nearing to bankruptcy have shown signs of recovery with a promising growth.

For your information I have positively written on the following stocks too. if you have time just search typing the company name.
Abans Electricals, Laxapana Batteries, TAFL, GRAN, BFL, Swisstek, Kelany tyres, ACL Cables, Kelani Cables, Stafford Hotels, Piguses Reef, Royal Ceramics, etc.

Thanks
Good Explain Thanks Buddy

EquityChamp

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Moderator
I think now you can see clearly the support created @ 1.90. It will be not too far to improve the support level @ 2.00. And with time it will show you all a surprise move. I anticipate a share consolidation for this stock once they are in a clear path of growth.

Thanks

sanjulanka


Manager - Equity Analytics
Manager - Equity Analytics
Very Happy Very Happy Very Happy Basketball Basketball Basketball
Thanks EC

Chinwi

avatar
Associate Director - Equity Analytics
Associate Director - Equity Analytics
I was exited about this share but now stay watching because they have reduced asset value of 1 rupee reported earlier to 59 cents after recalculating.

Eugine Fernando


Senior Manager - Equity Analytics
Senior Manager - Equity Analytics
@Chinwi wrote:I was exited about this share but now stay watching because they have reduced asset value of 1 rupee reported earlier to 59 cents after recalculating.
collection is going on at 1/90, will have a run very soon.....

Chinwi

avatar
Associate Director - Equity Analytics
Associate Director - Equity Analytics
@Eugine Fernando wrote:
@Chinwi wrote:I was exited about this share but now stay watching because they have reduced asset value of 1 rupee reported earlier to 59 cents after recalculating.
collection is going on at 1/90, will have a run very soon.....[/quote ]

I do not do what crowd  do;  take investment decisions  on fundamentals for long term gain .

I have some xxx,xxx SFL and currently placed big orders at much lower levels. Will come again after few months to buy higher even @ 2.30-2.50 only if fundamentals show long term growth.

EquityChamp

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Moderator
Looks at CSF very carefully. Without noticing by anyone I can say CSF is going to upgrade its support level to Rs2/-. I feel strongly.

TARGET


Senior Manager - Equity Analytics
Senior Manager - Equity Analytics
@Chinwi wrote:
@Eugine Fernando wrote:
@Chinwi wrote:I was exited about this share but now stay watching because they have reduced asset value of 1 rupee reported earlier to 59 cents after recalculating.
collection is going on at 1/90, will have a run very soon.....[/quote ]

I do not do what crowd  do;  take investment decisions  on fundamentals for long term gain .

I have some xxx,xxx SFL and currently placed big orders at much lower levels. Will come again after few months to buy higher even @ 2.30-2.50 only if fundamentals show long term growth.
So you hv collected sfl and now you should in profit? What the reason you to collect sfl at that time?

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