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Economy

Why Investors Should SELL Unilever Nigeria, HOLD Dangote Sugar Stocks

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Dangote Sugar

By Dipo Olowookere

Recently, the boards of Unilever Nigeria Plc and Dangote Sugar Plc released their financial statements for the first half of this year and while the former recorded a poor performance, the latter was below expectations.

For Unilever Nigeria, its total revenue went down by 11.36 percent to N42.66 billion from N48.12 billion in H1 2018 as a result of the firm’s dismal performance of its Household and Personal Care (HPC) unit, which fell by 18.05 percent due to intense price discounting amongst brands in the sub sector.

According to Meristem Research, when in the second quarter of the year the company made an aggressive marketing effort with a partnership with Jumia on Everyday Essentials, things marginally improved as the business segments as the food and HPC grew by 6.31 percent and 9.03 percent respectively.

Meristem Research noted that, “On a general note, the downward trend in consumer purchasing power foretells a tough environment for FMCGs as companies utilise price discounting strategies and sales promotion to edge out one another.

“Especially, the dismal performance of the HPC segment continues to weigh on the revenue generation capability of the company. Hence, we project a revenue growth of -7.00 percent in 2019, resulting in absolute 2019FY revenues of N86.40 billion.

“Given our expectation of a 29 percent reduction in 2019FY net profits, we forecast 2019FY EPS of N1.10 and 2019 target PE of 20x implying a target price of N22. This portends a downside of 31.26 percent from the closing price of N32 on August 6, 2019, hence we rate the stock a SELL.”

For Dangote Sugar, the revenue generated by the company went down by 4.42 percent to N80.36 billion from N84.08 billion in H1 2018.

According to Meristem Research, the performance on a regional basis was mixed with the Lagos and West regions suffering declines of 9.30 percent and 28.31 percent respectively as a result of increased competition and market share grabbing by other market players while the North and East grew by 10.42 percent and 7.01 percent respectively.

“As stated in our Q1:2019 earnings note, the implementation of alternative logistics such as barges and third-party trucks in clearing raw materials from the ports and factory continues to yield positive results as revenues grew by 10.67 percent from N38.15 billion in Q1:2019 and the streak of negative YoY revenue growth narrowed down to 1.68 percent from 7.27 percent in Q1:2019.

“Following the release of H1:2019 results, the performance of the company continues to stay in line with our expectation and as such, we retain our projected 7 percent growth in sales volume over 2018, however, with a lower average price of N12,000, implying 2019FY revenues of N149.33bn.

“The outlook is bleak with an expectation of lower revenues and profits at the end of the year. Given this outlook, market risk and company’s idiosyncratic risks, we have revised our target PE and 2019 FY EPS down to 5.7x and N1.67 respectively from 6.5x and N1.85 in Q1:2019.

“This indicates a target price of N9.55 with a downside of 2.60 percent from the closing price of N9.80 on August 7, 2019. Hence, we place a HOLD rating on the stock.”

Dipo Olowookere is a journalist based in Nigeria that has passion for reporting business news stories. At his leisure time, he watches football and supports 3SC of Ibadan. Mr Olowookere can be reached via [email protected]

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Economy

Wems BO Plans Personal Finance Retreat to Empower Nigerians

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Wems BO personal finance

By Adedapo Adesanya

Financial educator and coach, Mrs Wemimo “Wems BO” Bolu-Opaniran, is set to host the maiden edition of the Wems BO Personal Finance Retreat 1.0, a weekend event aimed at helping participants improve their financial literacy and develop practical money management skills.

According to a statement, the retreat is designed to make personal finance engaging and accessible through interactive sessions, games, networking opportunities, and one-on-one coaching sessions.

The organisers said the event will focus on providing attendees with practical and actionable financial knowledge rather than conventional lecture-style teaching.

“Come and unravel financial wisdom and leave with a practical and concrete action plan,” the organisers stated in a statement.

Activities lined up for the retreat include interactive finance sessions, networking opportunities, personal finance workbooks, games and activities, food and souvenirs, as well as three months of exclusive access to the event replay.

Speaking on the rationale for organising the event, Wems BO noted that lack is primarily not always the reason people have bad finances, but often, money culture is.

“The way one sees and treats money has been a development from years and decades past. So, what to do about money is not the solution. It is mindset, defaults and motivations shaping decisions.

The solution is an inner inquiring on why you do what you do, beyond money. Understanding who you are, then beginning to drive decisions that make you grow, manage and scale your finances in a way that aids the life you want,” she told Business Post.

Participants will also have the opportunity to receive one-on-one coaching with the finance guru.

The event is scheduled to be held from Friday, July 17 to Saturday, July 18, 2026, at an in-house venue on Lagos Mainland.

Ticket prices were pegged at N40,000 for individual attendees and N76,000 for duo tickets, with organisers noting that limited slots remain available.

Interested participants can register through the official registration link.

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Economy

Unlisted Securities Index Rises 0.91%

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Unlisted Securities Market

By Adedapo Adesanya

A 0.91 per cent growth was recorded by the NASD Over-the-Counter (OTC) Securities Exchange on Friday, May 22, after the share prices of four securities ended in green.

According to data, FrieslandCampina Wamco Plc went up by N15.61 to N179.67 per share from N164.06 per share, Newrest Asl Plc grew by N6.11 to N67.26 per unit from N61.15 per unit, Food Concepts Plc appreciated by 17 Kobo to N2.75 per share from N2.58 per share, and Nitrox Industrial Gases Plc added 6 Kobo to sell at N25.50 per unit compared with the previous day’s N25.44 per unit.

At the close of business, the market capitalisation chalked up N23.22 billion to settle at N2.561 trillion versus Thursday’s N2.538 trillion, and the NASD Unlisted Security Index (NSI) increased by 38.81 points to 4,281.28 points from 4,242.47 points.

During the session, the price of Central Securities and Clearing System (CSCS) Plc was down by N3.13 to N71.07 per share from N74.20 per share.

The activity chart showed that the volume of securities transacted by the market participants decreased yesterday by 81.6 per cent to 590,339 units from the 3.2 million units recorded on Thursday, as the number of deals shrank by 28.6 per cent to 30 deals from the 42 deals recorded a day earlier, while the value of securities increased by 0.5 per cent to N95.3 million from the preceding session’s N94.8 million.

Great Nigeria Insurance (GNI) Plc closed the day as the most active stock by value on a year-to-date basis, with a turnover of 3.4 billion units worth N8.4 billion, followed by Infrastructure Credit Guarantee (Infracredit) Plc with 2.3 billion units sold for N6.5 billion, and CSCS Plc with 61.2 million units traded for N4.1 billion.

The most active stock by volume on a year-to-date basis was GNI Plc, with the sale of 3.4 billion units for N8.4 billion, followed by Infracredit Plc with 2.3 billion units valued at N6.5 billion, and Resourcery Plc with 1.1 billion units exchanged for N415.7 million.

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Economy

Stock Investors Gain N344bn amid Decline in Transactions

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stock investors' portfolios

By Dipo Olowookere

The Nigerian Exchange witnessed a decline in transactions on Friday despite closing higher by 0.22 per cent on the back of sustained bargain-hunting.

During the last trading session of the week, investors transacted 711.9 million equities valued at N29.1 billion in 62,386 deals compared with the 1.1 billion equities worth N31.0 billion traded in 62,448 deals in the previous day, indicating a decline in the trading volume, value, and number of deals by 35.28 per cent, 6.13 per cent, and 0.10 per cent, respectively.

Fidelity Bank closed the day as the most active stock with the sale of 198.1 million units for N4.6 billion, Access Holdings traded 69.7 million units worth N1.8 billion, Mutual Benefits exchanged 42.7 million units valued at N197.4 million, Japaul transacted 33.9 million units worth N134.4 million, and Zenith Bank sold 24.4 million units valued at N3.2 billion.

Yesterday, the industrial goods index rose by 0.53 per cent, the consumer goods sector jumped 0.28 per cent, the banking industry improved by 0.25 per cent, and the energy counter soared by 0.18 per cent, while the insurance space shed 0.18 per cent.

At the close of business, the All-Share Index (ASI) gained 536.98 points to finish at 249,712.37 points compared with the previous day’s 249,175.39 points, and the market capitalisation grew by N344 billion to N160.077 trillion from N159.733 trillion.

Aluminium Extrusion and DAAR Communications expanded by 10.00 per cent each to sell for N9.90 and N2.09, respectively, RT Briscoe surged by 9.93 per cent to N14.06, Learn Africa increased by 9.79 per cent to N12.90, and Red Star Express advanced by 9.56 per cent to N34.95.

On the flip side, Trans-Nationwide Express depreciated by 9.92 per cent to N5.72, Livestock Feeds dipped by 9.64 per cent to N8.90, The Initiates crashed by 8.65 per cent to N33.80, Ellah Lakes drowned by 8.64 per cent to N10.05, and Neimeth lost 6.36 per cent to trade at N10.30.

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