Feb.1 SHNG 3Q 2012 and on Graham's multiple

*Below presentation is patterned after the format from Immovable as a mountain blog

SHNG Q3 2012

assets: 35.104 billion pesos
liabilities: 12.632 billion pesos
equity attributable to parent company: 19.630 billion pesos
paid-up capital: 4.764 billion pesos
cash and cash equivalent: 1.577 billion pesos
retained earnings: 14.037 billion pesos  

Total current asset: 6.630 billion pesos

revenue 9 months 2012: 3.699 billion pesos
revenue 9 months 2011: 2.113 billion pesos
% change: 75 %

net income 9 months 2012: 1.029 billion pesos
net income 9 months 2011: 827.137 million pesos
% change: 24.4%

last closing price (31-01-2013): 3.11 pesos
earnings per share (annualized): 0.288 centavos
trailing price-earnings ratio: 10.8 x
book value per share: 4.12 pesos

price/book value: 0.75x

return on equity: 7.0%

return on assets: 3.9%

net income margin: 27.8%

current ratio: 2.78

debt-to-equity: 0.64

^{Applying Benjamin Multiple:}

PE= 10.8x

P/B.V= 0.75x

PE X B/V= 8.1

Expensive Multiple as per Graham is 22.5

Now I would like to see a potential profit margin using this multiple

22.5 as expensive

Hence, 8.1 still has a 177% upside before it can reach to an expensive level (Graham’s multiple)

Current price is 3.11 + 177% is 8.6 pesos. Honestly I now doubt the numbers unfolding before my eyes…for that matter, market price too cheap.

Given with the above target expensive price level I doubt if it is achievable.  However, the huge retained earnings of 14B pesos (which directly adds up to equity) pulled down the P/B.V. to 0.75 that leads to a wide margin of the multiple 8.1 to reach expensive level.

As we all know, it is the frenzy buying to overwhelm the seller that can move the price to a new heights.

Chart trend has been ascending since 2009 recovery.

Excerpted from an article interview to George Ty

by Will soon Flourish 5 days ago:

How many rooms will your Grand Hyatt Manila have? Will it be the best in the metropolis?

I would like to say so, because in many parts of Asia, the Grand Hyatt is the best hotel. In Tokyo, the No. 1 hotel is Grand Hyatt; also in Beijing, Hong Kong, Taipei, Seoul and Jakarta. The Grand Hyatt Hotel is the most prestigious in the entire Asian region. But the one making the most money is the Shangri-La Hotel chain.

Why?

One of the reasons is the Shangri-La chain owns most of their hotels, while the Grand Hyatt chain only manages most of their hotels in Asia.

Caveat