First Pacific Company

Résumé du document

First Pacific Company Ltd (FPC) is a Hong Kong public listed holding company with business interests in telecommunications, infrastructure, consumer food products and natural resources. FPC started in 1981 as a small Hong Kong-based financial services company established to allow four of Indonesia's richest families the Salim, Sutanto, Sudwikatmono and Risjad, as a vehicle to funnel their wealth overseas. The Salim family is still the main shareholder in the holding company. Sudwikatmono has a small participation. FPC is a shareholder in four publicly-listed companies in the Philippines and Indonesia, Philippines Long Distance, Metro Pacific Investment, Philex and Indofood.

Extraits

[...] FPC appears to have fallen in that category in the past few months. Our investment thesis rests on 4 elements: Free cash flow rising in the next three years after dropping in 2008- -135 2009F 76 2010F 83 2011F 108 2012F 185 Momentum turning positive after two weak years. Momentum Sales EBITDA EBIT EPS, Basic 2009F 2010F 2011F 2012F RoE and RoIC getting in comfortable territory RoE RoIC 2009F 2010F 2011F 2012F Both the Philippines and Indonesian economies anticipated to perform well in next three years with moderate inflation. [...]

[...] It also operates a flour mill First Pacific History Liem Sioe Liang (林绍良) was born in China's Fujian province in 1916. In the 1930s, Liem moved to Java, in Indonesia, to work for the peanut oil company run by his uncle and brother. In his 20s, Liem struck out on his own, entering the coffee and cloves trade, supplying cloves to the kretek (clove-flavored cigarettes) industry, and soon expanded into other goods. But the key to Liem's fortune lay in the Indonesian war for independence of 1947-49. [...]

[...] Anthony Salim approached Manuel Pangilinan, a Filipino with an MBA from the Wharton School working as an investment banker, to set up a deposit-taking company in Hong Kong that would enable the Salim to expand into consumer products and finance. This eventually became First Pacific Company. FPC's annual and financial reports are in English and Chinese but not in Bahasa or Tagalog, a reflection of its background; overseas Chinese in South East Asia First Pacific Overview of holdings INDOFOOD SUKSES MAKMUR Strong One of the world's largest instant noodle producers. Largest flour miller in Indonesia. Four complementary business groups- consumer branded products, bogasari (flour), agribusiness, distribution- enabling vast economies of scale. [...]

[...] Acquisitions. It is difficult to assess if the group is likely to continue acquire as aggressively as it has done in the past two years. We expect a slowdown 2009F 214 2010F 251 2011F 297 2012F 243 Acquisitions After ‘crashing' from 1000 to below 500 USD/ MT in the space of 8 months in 2008, CPO prices are rebounding lately on the back of stron demand in India. This is positive for Indofood's margins First Pacific Contribution to FPC group profits is still led by PLDT. [...]

[...] Execution. Purchasing 16% of Meralco, purchasing 30% of Philex, expanding into healthcare could stretch the group financial and human resources. Other HK-listed groups that expanded rapidly went through some of these issues. Henderson Investment in the mid-2000 is one example. The usual domestic macro/ political risks. However the Indonesian election is behind while in the Philippines elections typically boost texting (SMS) revenues. A global return to recession is not our main case scenario. Dilution. [...]