Hi Victor, Rusmin,
Is PE the right valuation metric to use for QAF? I would like to compare QAF to its peer, but I only know of Auric Pacific, but it’s delisted so I can’t find it’s financials to compare. Do you have suggestions for other QAF’s competitors that I can look into?
I would stick to simple valuation like PE or P/CF before working capital. For earnings, remove any exceptional items from your calculation. QAF recognised one time gain for their some stake disposal for Malaysia unit. Also, their earnings for 2016 include tax benefit which QAF enjoyed from substantial tax saving for their primary production business (loss-making then). This tax saving was fully utilise so we can expect higher tax for QAF in years to come.
For the peers, you can have a look at Nippon Indosari. It is trading at high multiples of more than 20x due to its high growth. So you’d need to take into account PEG if you’re comparing bread businesses in other countries.
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