Fair Value and Recommendation
We performed a valuation exercise on the shares of PIL using two (2) distinct valuation methods; Price-to-Earnings (P/E) Method and Price-to-Book (P/B) Method. The valuation methods assumed an investment horizon of two (2) years and utilized our estimates for the Company’s performance in FY 2022.
We decided to use FY 2022 as we believe that the underlying value of the company’s pipeline will be realized by the 2022 FY. Our base case estimates Net Income attributable to shareholders of US$11.98 million which translates to an earnings per share (“EPS”) of US$0.0168. Our FY 2022 Net Income attributable to shareholders estimate is based on the expected effects of the successful deployment of the capital raised through this APO into the proposed pipelines. When the P/E multiple for PIL’s peers of 16.47X is applied to forecasted FY 2022 EPS an estimated fair value of US$0.2759 is produced.
Our resulting base case estimate for FY 2021 Book Value is US$144.26 million which translates to a Book Value per share of US$0.2018. This book value estimate is informed by an expected capital raise of US$19.40million in FY 2021 through the APO, recognition of 50.5% of Robert Manufacturing’s Co. Net Asset Value in FY2021 and a profit retention ratio of 50% for both FY 2021-FY 2022. When the P/B multiple for PIL’s peers of 1.51X is applied to forecasted FY 2022 Book Value an estimated fair value of US$0.3048 is produced. The average fair value estimate of both methods is US$0.2903 with an implied price upside of 26.23%.
| P/B Valuation | $0.3048 |
| P/E Valuation | $0.2759 |
| Average Estimated Fair Value Price | $0.2903 |
| Action | Participate |
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