First equity research reports FMI stocks

The first equity research report of the First Myanmar Investment (FMI), a leading conglomerate in Myanmar, has been released by Thura Swiss Company ahead of the planned launch of the Myanmar Stock Exchange in 2015.

FMI is an investment holding company whose revenues are the dividends generated by its subsidiaries. The annual performance of these subsidiaries determines the amount of dividends paid out to FMI. Although not a majority stake holder in many of these subsidiaries, FMI holds a considerable amount of managerial discretion. The managing agent of FMI, Serge Pun and Associates (SPA) takes an annual fee of 1% on paid up capital, and the managers and directors of FMI are entitled to a 10% share of the net profit.

Real Estate is FMI’s main business. Although FMI’s real estate assets only accounted for 31% of total assets in 2012, the real estate sector contributed to 87% of revenue. Because mortgages are not used for property transactions in Myanmar, FMI generates uneven cash flows from its real estate businesses, but is able to collect full payment in a relatively short time period, freeing up cash for use in other projects. Three properties contribute the bulk of FMI’s real estate revenue currently: FMI City, Star City, and FMI Centre.

“Our objective is to make the market more transparent. We study whether the companies have more prospects or have benefits in short term and long term. We are doing it with FMI right now,” said Dr. Aung Thura, Chief Executive of the equity research firm Thura Swiss.

Although Myanmar has some public companies, they don’t have much transparency, he noted.

“Our research calculated the value each share of FMI. The target price we have calculated earlier is 9326 kyats (about US$10) per share. But their actual price is 12,000 kyats (about US$12). According to what we have found out, the share price has jumped five times within 52 weeks. We told them not to sell or buy the shares right now. We need to watch the market situation closely. FMI will be successful in the future but the current share prices are a little different with the actual price. That’s why we told them not to buy and sell shares in our report. If the time is convenient to make the business, we will change back the status,” said Jeremy Rathjen, Thura Swiss’s Vice President of Research.

source: Eleven Myanmar

http://www.elevenmyanmar.com/business/2556-first-equity-research-reports-fmi-stocks