HGH - Heartland Group Holdings

[King1212]

Hmy only HGH cake icing...it is always on HGH book .. even pre covid-19 when sp hit $2.

Now the market values HMY....it will take time

[winner69]

Hmy only HGH cake icing...it is always on HGH book .. even pre covid-19 when sp hit $2.



Now the market values HMY....it will take time

But my lord ...some that it would $20m to profit ...about 3.5 cents / share .....and then hope that the market wouldn’t really understand and apply a 15 multiple to earnings thereby adding 50 cents to share price

[Beagle]

But my lord ...some that it would $20m to profit ...about 3.5 cents / share .....and then hope that the market wouldn’t really understand and apply a 15 multiple to earnings thereby adding 50 cents to share price

With all due respect mate I think almost everyone on here knows that any profit will be unrealized and a one-off and are ignoring it in their valuation calculations.
Just a reminder that 16 times the companies own forecast of 14.4 cps = $2.30, (not including any increase from aforementioned one-off Harmoney unrealized gain, the fact that they're trading ahead of current year forecast YTD and not seeing any utilization of previous FY20 Covid provisioning so some of that might come back as a one off restatement of prior year profit).

[KJMLimited]

Going by ANZ's AGM update today, there's every chance that HGH FY 20 Covid provisioning will be restated (upwards) at the interim if not before if it is material.

[Beagle]

I suggest you have a read of what Heartland themselves said just 16 days ago here http://nzx-prod-s7fsd7f98s.s3-websit...198/336436.pdf
For the time poor I cut and posted this excerpt :-
Impairments to date have been much lower than anticipated, tracking well below budget.
This reflects releases due to repayments, but also an improving profile and reduction in nonperforming loans.
The economic overlay we took in FY20 of $9.6 million pre-tax has not been utilised.

[KJMLimited]

Ha ha. By 'restatement (upwards)' I actually meant that in a positive sense ie that earnings will be restated upwards. In other words, provisioning will go down. Just my bad. We are in agreement. But thanks for the suggestion which I didn't take up having read the AGM notes already.

[winner69]

I think that in Jeff’s mind the covid cover doesn’t really exist and that’s why he talks about F20 npat being $78.9m ....and because it doesn’t really exists expects it to be reversed and the reversal is included / assumed in the $85m forecast for F20

So reported NPAT improving from $72m to $85m in F21 (not counting HMY)

[Beagle]

I think that in Jeff’s mind the covid cover doesn’t really exist and that’s why he talks about F20 npat being $78.9m ....and because it doesn’t really exists expects it to be reversed and the reversal is included / assumed in the $85m forecast for F20

So reported NPAT improving from $72m to $85m in F21 (not counting HMY)

Pretty astonishing earnings growth then isn't it of 18% !...with clear potential for an upgrade seeing as they did ~ $30m in the first 4 months
Note this bit of the speech, emphasis added :-
Some commentators maintain that the economic ramifications of the pandemic are yet to be
fully felt, and due to this remaining uncertainty, and despite running ahead of the forecast run
rate, we don’t propose currently to change the current NPAT guidance of $83 million to $85
million for FY21.

Not changing it currently is conservative and certainly doesn't mean they won't change it later in the year as more clarity emerges so I therefore see 3 potential sources of an upgrade
1. Reversal of some or all of FY20's Covid provisioning - (one off event I will ignore for my valuation considerations)
2. Upgrade of current year\s forecast as no need for current year Covid provisioning (ongoing implications for enhanced profitability that's definitely relevant to valuation considerations)
3. One off recognition of unrealized value accrual for Harmoney stake - (one off event I will ignore for my valuation considerations).

Without any of the above I see fair value at about $2.30 a year from now.

[King1212]

That will do me master Beagle...$2.30

Brand new car...plus holiday in Thailand...with Singha beer and two thai girl....not a lady boy of course... bloody mr.chow...

[winner69]

Pretty astonishing earnings growth then isn't it of 18% !...with clear potential for an upgrade seeing as they did ~ $30m in the first 4 months
Note this bit of the speech, emphasis added :-
Some commentators maintain that the economic ramifications of the pandemic are yet to be
fully felt, and due to this remaining uncertainty, and despite running ahead of the forecast run
rate, we don’t propose currently to change the current NPAT guidance of $83 million to $85
million for FY21.

Not changing it currently is conservative and certainly doesn't mean they won't change it later in the year as more clarity emerges so I therefore see 3 potential sources of an upgrade
1. Reversal of some or all of FY20's Covid provisioning - (one off event I will ignore for my valuation considerations)
2. Upgrade of current year\s forecast as no need for current year Covid provisioning (ongoing implications for enhanced profitability that's definitely relevant to valuation considerations)
3. One off recognition of unrealized value accrual for Harmoney stake - (one off event I will ignore for my valuation considerations).

Without any of the above I see fair value at about $2.30 a year from now.

With all due respect your 1. and 2. are a bit confusing and to me seem to be the same thing - and it seems you sort of agree with me when I say the whole $6.9m after tax covid overlay in F20 was a cosmetic thing and will be reversed in full in F20 and that reversal is included in Jeff’s $85m forecast

This means F21 result will likely be about $85m ..an increase of 8% over F20 normalised $78.9m ....and whatever might happen between now and year end will be subject to proactive provision to ensure it all ends up at about $85m...no more and no less, Jeff will ensure that happens.