Tag Archives: EDL

EDL – Buy

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Fair value -> 10,875LAK, currently trading at 4,650LAK

Thesis

As Laos continues to develop, utility companies will benefit from the growing populations and increasing infrastructure that’s able to carry products and services to more of the populous country. EDL is currently trading at 5x 2012F earnings with a 11% dividend yield (based on a 50% payout ratio). While highly geared at 92%, this will rapidly dissipate as the consistent earnings streams come through. Peers in the region are trading at 25x 2012F earnings and don’t have the growth profile that EDL does. EDL presents another opportunity to profit from a rerating and investors will be paid to hold it an wait.
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Investing in Laos

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I’m beginning the journey investigating investments in Laos for a number of reasons. Firstly, when I recently visited the country, I noticed a massive amount of development compared to when I was last there in 2008. While the infrastructure still leaves a lot to be desired, it appears that Laos is beginning to get momentum. Secondly, there are only 2 companies listed on the exchange (BCEL, a bank and EDL, an electricity generation company) making the screening process easier. Thirdly, on my most recent visit to Vientiane I opened up a brokerage account giving me the ability to access this exotic market.
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