Pelikan International Corporation Berhad (PELIKAN)

The first time i heard this name Pelikan, i thought it is a local or Malaysia brand (same like when i heard "Bata"). After some study, i found that it is originally from German, and also an international brand which have market thier product in more than 50 countries. In Malaysia, Pelikan can be say as a baby brand. Pelikan is in the consumer industry which engages in the manufacture and distribution of writing instruments; art, painting, and hobby products; school and office stationery; and printer consumables. The company distributes its products through wholesalers, dealers, retailers, hypermarkets, schools, and specialized stores primarily in Germany, Switzerland, Italy, rest of Europe, and Latin America. Pelikan International is headquartered in Puchong, Malaysia.

Not so many people known about this brand, same like me in the past. Most of us only heard about buncho's, Faber Caster, Pilot, Parker, Stabilo & etc........

It is a strong company that have efficient management team. Pelikan is aggrassively enter the Asia market. The are on the road to take over more Asia manufacturer & distribution network.

1)The EPS as below
2005 RM0.215
2006 RM0.241
2007 RM0.289

Average EPS Growth Rate = 19%

2)The Dividend per share as below
2005 RM0.18
2006 RM0.15
2007 RM0.11

The % of Dividend payout rate (2/1)
2005 83.72%
2006 62.24%
2007 38.06%

Average ROE = 17%

Average PE (10years) = 8.44

From the above, we can know that the management started to reduce the dividend payout although the EPS is increasing. For me it is a good strategy to increase my investment return if the management can reserve the cash for better investment and generate more ruturn, rather than just pay us the dividend which have to deduct from the government tax.

If let's say the next 5 years, the comapny remain the same dividend payout rate as 2007 with average ROE of 17%, our expectation can be like below:

17% x 61.94% (100% - 38.06%) = 10.53%

It mean the reserve portion of cash after the deduction from dividend payout, can generate of 10.53% growth for Asset.

Let's culculate the future growth of the Net asset per share with the 10.53% growth rate

2007 1.7
2008 1.879
2009 2.077
2010 2.296
2011 2.54
2012 2.80
2013 3.09
2014 3.42
2015 3.78
2016 4.18
2017 4.62

The Intrinsic value = 4.62 x 0.17 x 8.44
= 6.63

with the current price of RM2.95, we are at more than 200% of margin of safety.

Extra Information:

If you check the shareholding changes, you would found that Pelikan has just get a new giant investor (Hayman Capital Master Fund LP-the most successful fund in last year which gain a lot of money in the US Crisis). Other than that, the other shareholders & diretor of the company like the Goldman Sachs, Mr Loo are increasing thier shares in Pelikan. Do we can expect the future of Pelikan from here? Please think about it.

My Recent Study - Pelikan, Picorp, Kasset & Vads

Try to look into these stocks. There have the potential to growth further. I will post my analysis after my study. you can post yours' as well if you guys have done.

Thanks!

Good Investing!