Unga Group FY 2014-15

What is Unga worth?
To re-phrase, what should Unga be valued at?

Current "Market Value" is KES 3bn and includes well-known Maize and Wheat (products) brands. Also animal feeds.

http://www.businessdaily...0/-/32pett/-/index.html

Alpha Grain Millers, the owners of Kifaru maize and wheat flour brands, last month opened a $10.5 million (Sh940 million) plant in Athi River to expand output.The factory can produce 300 tonnes of maize flour and 150 tonnes of wheat flour daily.

South Africa’s Tiger Brands earlier this year moved to acquire Kenya’s Rafiki Mills and Magic Oven Bakeries in a deal estimated at Sh2.1 billion.

The manufacturer of the Soko maize flour has bought out a rival miller for more than Sh200 million as it seeks to expand its market share in the competitive packaged food business. Thika-based Capwell Industries, which also produces Pearl and Ranee rice brands, has bought the maize milling assets of neighbouring Chania Flour Mills, which produces Chania Star and Chania Citizen brands.

It should be noted that Rafiki might be larger than Unga in terms of market share. That is, if BD is to be believed.

Genghis capital have a valuation of Kes. 65.32 on this. I had to pull the chart which i havent liked

I am not a Chartist, so you have to explain what the chart means!

I looked at the numbers. I see PAT growth in 2014-15:

1) after the installation of the new Wheat Mill [Ongoing]
2) sale of Bullpak [One time]
3) Reduced expensive local debt [Ongoing but can vary substantially]
4) Reduced maize prices [Temporary until politicians jump in]
5) Growth in animal feeds business [Ongoing]
6) Possible turnaround of Uganda now that Unga (Kenya) owns 100% [Ongoing]
7) Land holdings excess of needs [Far out in the future]

This requires execution and cash. Cash from sale of Bullpak plus a property on Ngong Road. The purchase of Ennsvalley will need cash too.

Will the Nedgwas take in a Strategic Investor who has experience in food FMCGs?
Will the Ndegwas sell out to a foreign firm who wants in?
Or will the Ndegwas try to pull a Rea on minority shareholders?

Am neither a chartist in the true sense of the term

I check the charts to ensure i don't catch buses that have left the stage. And this look like it’s had a good run this year. Can’t afford to get stuck like those who got in 2007 – 2013. All the best señor

A crowded field but necessary as Kenyans become increasingly urbanized.

In for the next 3 years. I expect a buyout by a FMCG multinational looking for EAC exposure. Tiger brands tried to buy Rafiki Millers & Oven Fresh for 2bn so isn't Unga worth at least 3x?

Go Unga! Go Unga! Go Unga! The base price seems to have stabilized at 45.

On a serious/fundamental basis... I like this firm in a boring business of selling (semi-processed) food.

NCPB will start selling maize to Millers at 2,800. This sets a ceiling for other suppliers/farmers. The other option is to allow them to import maize from other countries.

http://www.businessdaily...6/-/ohbilp/-/index.html

The new (efficient and larger) wheat mill allows Unga to supply the pricier flour to a growing middle class population.

http://allafrica.com/stories/201503010166.html

The new mill allows Unga to meet the 'peak demand' during festive seasons. This reduction in stock-outs helps retain customers loyalty as well as increases sales & profits.

http://bankelele.co.ke/2013/11/unga-2013-agm.html

This is a controversial topic, farmers in the riftvalley want the maximum returns on their harvest say 3,500/- per bag, hustlers in Nairobi want unga at 45/- the government wants TAX the middle men and the cartels wants their cut, the millers there in, the list goes on, so either the farmer or the hustler will suffer.

What does this stock swallow to beat the market when all are beaten??