Mailpac Group Limited Equity Report

Valuation Summary

The Price to Book (P/B), Price to Earnings (P/E) and Dividend Discount Model (DDM) Valuation methods were applied to our forecasted Earnings and Book Value for FY 2021 to estimate the stock’s fair value.

The base case forecast for Mailpac is that they will earn approximately J$545.78 million in FY 2021, which translates to an estimated Earnings Per Share of J$0.24. Further, our estimate of book value per share (BVPS) was J$0.38. Applying the Justified P/E and P/B approach, we obtained an weighted fair value estimate of J$5.22. We complemented this with a DDM valution and obtained a fair value estimate of J$3.90. Utilizing a weighted average of the three-valuation methodology, we obtained a fair value of J$5.18, comparing this to the current price of J$3.74; the stock is currently undervalued by 41%. Therefore, we rate this stock as an OVERWEIGHT.

Stock Mailpac
Last Price (J$) $3.74
Year to Date Return 34.41%
Dividend Yield 2.67%
Price/Book 14.72
Forward P/E 15.42
Estimated Fair Value $5.18
Total Return Upside 41.29%
Recommendation OVERWEIGHT

As at May 28, 2021

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