Sunningdale Tech

Sunningdale Tech - I have looked through Sunningdale Tech and here are my thoughts on this tech company.

Sunningdale Tech is a leading Asian tooling, plastic injection moulding and precision assembly company. They are currently operating in four main business segments namely automotive, consumer/IT/environment, healthcare and tooling/mould fabrication. They currently have 19 manufacturing facilities spread across 9 countries and as their chairman mentioned, they continue to receive queries from both new and existing customers who recognise their ability to undertake projects on a global scale. So far so good, the background business profile seems to suggest they are a global player in their field.

The chairman in the FY16 annual report did raised a few challenges their businesses constantly face such as foreign exchange movements, rising labour cost, pricing pressure from customers, rising input costs, and structural reforms in China (which affects their China based businesses).

With these backdrop, let us look into their business performance so far over the past decade. First, we look into how their revenues have grown over the past decade. Revenues have grown by a compounded annual growth rate (CAGR) of 6.52% over past decade.

Next, their operating profit has grown by a CAGR of 9.2% over the past decade.

Next, their profit attributable to shareholders has grown by a CAGR of 9.98% over the past decade.

Next, their diluted earnings per share (EPS) has grown by an impressive CAGR of 25.9% over the past decade.

This is a low profit margin company. Let's look at how the profit margins have changed a decade ago compared to now.

Operating profit margin = 4.6% (2007) vs 5.9% (2017)
Profit attributable to shareholders margin = 3.1% (2007) vs 4.3% (2017)

The various profit margins have improved over the past decade though they are generally still at low single digits. The operating profit, profit attributable to shareholders and diluted EPS have all grown faster than revenues. It seems that Sunningdale Tech have managed to keep the various operating expenses well controlled to achieve better operating efficiency. Indeed, the % of operating expenses (excluding finance cost) over revenues have decreased from 12.4% to 9.6% over the past decade. In 2017, operating expenses (excluding finance cost) only made up 9.6% of their revenue. They have been definitely doing well to reduce operating expenses while improving profit margins amidst a challenging business environment they operate in with pricing pressure from customers and rising input cost and labour cost over the past decade.

Now let's look some of the various metrics from their balance sheet and see how have they changed over the past decade.

Current ratio = 1.21 (2007) vs 1.74 (2017)
Quick ratio = 0.39 (2007) vs 0.39 (2017)
Debt to equity ratio = 0.29 (2007) vs 0.28 (2017)
Shareholder equity CAGR = 1.12%

This was a net net company (current assets > total liabilities) a decade ago and a decade later, it still maintains it's net net company status. The company has maintained similar leverage level taken a decade ago and now. It's balance sheet is strong as it has maintained it's net net status over the past decade. However, Sunningdale Tech did not grow it's shareholder equity at high CAGR thus not making their shareholders wealthier at a fast rate.

The returns on assets, returns on equity and returns on invested capital a decade ago were at low single digits of 2.36%, 3.75% and 3.62% respectively. However, the various returns have improved over the past decade and now returns on assets, returns on equity and returns on invested capital stand at 6.98%, 13.28% and 10.75% respectively. Clearly, the management has become more efficient over the past decade in producing better returns. The question now is can the management continue to improve their various returns any further or are these the best they can achieve? This is because the various returns though have improved over the past decade, have also remained stagnant around current levels for the past 3 years.

Next, we look at how their cashflows have grown. Operating cashflows have not grown much at all and remained at about similar levels now as compared to a decade ago. Free cashflows have decreased in their reported FY17 financial results as compared to a decade ago. I noticed the trend of their operating cashflows and free cashflows over the past decade can be quite volatile with some years having more operating cashflows and free cashflows while other years having lesser. Nevertheless, their free cashflows are still able to meet their dividends paid. One may need to watch their future cashflows carefully to make sure their cashflows can continue to grow even while over any single year, it may show volatile swings. If future cashflows do not grow anymore and even show a decreasing trend, then it could be a potential red flag to watch out for.

Nevertheless, Sunningdale Tech has strong balance sheet. But, we will also like to see that it can continue to receive increasing operating and free cashflows from it's businesses as it continues it's growth. Or else, the current assets carried on their balance sheet though looking impressive giving them a net net status and especially made up of a good amount of trade and other receivables, may start to make one worry whether there are any difficulties with collecting cash from these receivables.

Overall, I find Sunningdale Tech still an alright investment for consideration. But based on some of the above potential weak spots such as the weakness of it's cashflows being raised and operating in a constantly challenging environment, I will put it as an alright but not fantastic investment idea.

Valuation wise, if we assume the diluted EPS will continue to grow at a historical CAGR of 25.9% for next 7 years, the fair share price is $9.84. Wait a minute! This is insane! Sunningdale Tech is only trading at $2 now. At $2 now, the market is according a forward CAGR of 1.9% for the diluted EPS of Sunningdale Tech. Either the market is very intelligent or very stupid from what I can see. Perhaps from certain potential weak spots in the businesses such as the volatile cashflows and challenging operating environment as mentioned earlier, the market is discounting Sunningdale Tech.

I also noticed that the diluted EPS of Sunningdale was also volatile as well over the past decade with some years swinging into losses. The significant growth in the diluted EPS came in only from 2015 to 2017. Previous years had much lower diluted EPS registered. Thus, I think it is better to watch out whether Sunningdale Tech can continue to register stable growth in it's diluted EPS. As such, I think I will perhaps follow the market's assumption that Sunningdale Tech will grow it's diluted EPS at CAGR of 1.9% as a conservative measure and see the current traded price of $2 as my final conclusion of it's fair share price. Any upside will have to depend on how Sunningdale Tech can stably grow it's diluted EPS and cashflows over the next 7 years.

Thus, a fair share price of $2 is not too low an estimate (factoring in a margin of safety for the investor) in order to give the company time in future to see whether they can stabilise their growth going forward in these two areas of their diluted EPS and cashflows, minimising their volatilities, and even avoid any potential losses. If they can do that, their share price will certainly have much room to run higher.

NAV of $1.935 ,Rolling EPS is 16.6 cents, PE of 12 times. Dividend of 7.5 cents, Yield is 3.73%

Price/NAV 1.03 times.

TA wise, looks positive as the current price of $2.01 is staying above 20,50,100 & 200 MA.

The trading volume has also picked up which is rather encouraging/healthy.

It will need to conquer $2.10 in order to rise higher toward $2.20. Breaking out of $2.20 with ease + good volume that may propel to drive the price higher towards $2.30 then $2.40.

Not a call to buy or sell.

dyodd.

Cosco

Cosco - COSCO Shipping International (Singapore) Co., Ltd., an investment holding company, provides ship repairing, ship building, and marine engineering services primarily in the People’s Republic of China and Singapore. The company’s services include ship repair, conversion, and jumbolisation; new builds; and oil rig repair and construction services. It also transports dry bulk cargos, such as grain, iron ore, coal, steel, cement, and fertilizer through 12 dry bulk carriers with a capacity of 698,306 dwt serving shipping companies and cargo owners. In addition, the company offers various services comprising document preparation, collection of freight, cargo operation, vessel husbanding, customs declaration, port authority coordination, administration and settlement of cargo claims, transshipment management, bunkering services, container handling, cargo canvassing, and other value-added services. Further, it provides container repairs and other services; and fabrication works services, as well as produces marine outfitting components. Additionally, the company offers property management services; overhaul, repair, commissioning, and spare-parts replacement services for governors, turbochargers, and engine fuel systems; ship corrosion control services; and design, manufacture, sale, and technical services relating to vessels and industrial instruments, as well as trades and invests in properties. It is also involved in owning and chartering ships; providing shipyard financing; and marketing and selling shipbuilding and offshore project activities. The company was formerly known as COSCO Corporation (Singapore) Limited and changed its name to COSCO Shipping International (Singapore) Co., Ltd. in April 2017. The company was incorporated in 1961 and is based in Singapore. COSCO Shipping International (Singapore) Co., Ltd. is a subsidiary of China Ocean Shipping (Group) Company.


Recently, it has managed to divest off the losing Ship building business and made a once-off gain to bring the company back to profitable level. 

Cosco Shipping Heavy Industry Co., Ltd. completed acquisition of 51% stake in Cosco Shipyard Group Co., Ltd., a 50% stake in Cosco (Nantong) Shipyard Co. Ltd. and a 39.1% stake in Cosco (Dalian) Shipyard Co., Ltd. from Cosco Shipping International (Singapore) Co., Ltd. (SGX:F83).

Source:
Type: M&A Transaction Closings
From: 22/Dec/2017

It has also went on to acquired COGENT HOLDINGS LIMITED - for each CHL Share: S$1.02 in cash (the “Offer Price”).

NAV - 0.115 , P/NAV 4.037

We are now going to take a look at the Balance sheet items as follows:-

ROE - Return of Equity has been showing negative value for the past 3 years ( 2015 -2017) of which i think is not not in a good financial status.

Net Income margin has also been booking in a negative figure of -16.19 for 2015, -18.2 for 2016 with the exception for 2017 with a positive figure due to once-off divestment gain. without that, i think it would still be in the negative position.

Next we can take a look at the Cash flow for Operations . It has been showing a negative cashflow for past 4 years from 2013 to 2016. 2017 has returned back to positive level could be due to the divestment gain.

Net change in cash has also been showing a negative position.

The EPS has also been showing negative value for past 2 years from 2015 to 2016. 2017 it has managed to return back to profitability with a positive eps of 5.4 cents.

For financial status, we may have to monitor and observe how it fares for the next 2-3 quarters after the acquisition of Cogent Holdings ( a warehouse & logistics company).
I think is still too early to have a clearer picture of the company financial health status .

I think is good that they are now focusing into Shipping,Warehousing & Logistics which could provide the next growth to lead the company into profitability. 

From TA point of view, it has a beautiful breaking out moment at 48.5 cents on 14th Mar 2018 and closed well at 51.5 cents. It went on to hit the high of 53.5 cents the next day. Looks rather bullish!
 The price has pulled-back to 50.5 cents on 16th Mar + low volume which is rather healthy.

Look for a rise to re-test the recent high of 53.5 cents. Stop-loss at 48 cents. Target price 61 cents.
not a call to buy or sell.
dyodd.

China Sunsine

China Sunsine Chemical Holdings Ltd., an investment holding company, engages in the manufacture and sale of rubber chemical products in the People's Republic of China, rest of Asia, the United States, Europe, and internationally. The company offers rubber accelerators, anti-oxidant agents, vulcanizing agents, anti-scorching agents, and insoluble sulphur used for the production of tires and other rubber related products, such as shoes, belts, and hoses. It is also involved in the production and supply of heating power, including preparation and implementation of the project; and hotel and restaurant business. The company offers its products under the Sunsine brand name. It primarily serves the tire companies. The company was incorporated in 2006 and is based in Singapore. China Sunsine Chemical Holdings Ltd. is a subsidiary of Success More Group Limited.


 First, we look at the compounded annual growth rate (CAGR) in revenues for China Sunshine for the past 5 years from 2013 to 2017.

  Total Revenue - is the sum of cash inflows, increase in operating accounts such as receivables and occasionally, unrealized gains generated in the course of Company's Business activities.

 Total revenue has been increasing in double digits growth of almost 50%(CAGR) which is superb. The total revenue has grown from $353M to $562m.

 Next, we are looking at the Net Income which is growing at a multiple of almost 4 times which is $16M from 2013 to a whopping $70.1m for 2017.

Now , we are going to take a look at the Normalized diluted EPS - Normalized Net Income divided by the diluted weighted average share outstanding. It is growing at a CAGR % of 40% which is amazing from 3.3 cents from 2013 to 12.8 cents from 2017.

Next on to their efficiency. China Sunsine's return on assets (ROA) and return on equity (ROE) have maintained well from 2013 to 2017. In fact, I looked at their past trend these two return Metricsand they have maintained well at current levels of ROA (above 25%) and ROE (above 22%). We must realise that it is not easy to maintain the ROA and ROE in any business while it is growing it's assets and shareholders' equity through time. To be able to maintain the same level or even increase the level of ROA and ROE would mean the business has high efficiency. China Sunsine justdemonstrated their high efficiency in their businesses. If they can continue to maintain these same levels of returns, I will be even much more impressed with them.

ROA - is a measure of company profitability relative to total assets. It is calculated by dividing Tax Effective EBIT ( earning before interest and tax) by average total assets over a twelve months period.

ROE - is a measure of company profitability relative to total equity. It is calculated by dividing Tax Effective EBIT ( earning before interest and tax) by average total equity over a twelve months period.

Now on to their liquidity. We see that China Sunsine just got much better at their cash conversion cycle. Now on to their liquidity. We see that China Sunsines just got much better at their cash conversion cycle. The number of days in their cash conversion cycle has decreased significantly over the past 5 year meaning that it takes them much lesser time in number of days to convert cash on hand into even more cash through their operations.he number of days in their cash conversion cycle has decreased significantly over the past 5 year meaning that it takes them much lesser time in number of days to convert cash on hand into even more cash through their operations.
It is taking lesser nos of days to collect the cash from 121 days to 101 days.

We now look at how their balance sheet has changed over time.. I will tabulate the comparison of some important metrics between close to 5 years ago (2013) versus latest financial report (2017).

Current ratio = 1.67 (2013) vs 3.69 (2017) . It measures the company's ability to cover current debts with current assets.It it calculated by dividing total current assets by total current liabilities.

Quick ratio = 1.30 (2013) vs 3.14(2017). It measures the company's ability to cover current debts with liquid current assets. It is calculated by dividing the sum of the cash, short term investments, and account receivable by total current liabilities.

Net Profit Margin = 4.53 (2013) vs 12.46 (2017)

EBITDA Margin = 11.61 ( 2013 vs 21.14 (2017)

I also noticed that they are now a net net company with their current assets more than their total liabilities. 
Total Current Assets - $292.607m vs Total Current Liability of $79.139m.

The Operation cashflow has a great improvement from $27.59m to $79.37m.

Net Change in Cash inflow from $7.11m to $45.56m

I have roughly workout the intrinsic fair value for EPS for past 4 years (2013 - 2017) with CAGR of 40% and discount factor of 25% to come up with a value of $2.51.
I would further factor in a further discount of 20% i.e.$2.51 X 0.8 = $2.00.

The current price of $1.49 may present a further upwards potential of 34% to reach $2.00.

If using the Cash flow to work out the intrinsic value for past 4 years with CAGR of 50% and a discount factor of 25% we may roughly drive the fair value of $1.828.
Let say we factor in another 15% discount which is $1.828 x 0.85 that would give us a estimated fair value of $1.56.
The potential to rise from current price of $1.49 to $1.56 is another 7 cents..Some may like to consider to take this as a opportunity to take profit . Dyodd

TA wise, it is on a uptrend mode direction.
Looks bullish and it may likely continue to trend higher!
Not a call to buy or sell.
dyodd.

Duty Free Intl

These are my findings and thoughts on Duty Free International (DFI).

DFI has a long operating history of more than 38 years. It has grown much over the years from humble beginnings to now the largest local duty-free retailing group in Malaysia, with strategic presence at all leading entry and exit points in Peninsular Malaysia, including airports, seaport, downtown, border towns and popular tourist destinations. DFI currently operates over 40 outlets comprising duty-free retail outlets and duty paid retail outlets located at various locations throughout Peninsular Malaysia.

In addition, DFI has acquired an interest in the hospitality sector owning an 18-hole Black Forest Golf & Country Club. Thus, it derives it's main revenue from operating it's retail business segment of duty free and duty paid retail outlets while adding on another hospitality business segment to their revenue streams. And all their businesses are marketed under the "Zon" brand.

There are a few pieces of interesting news and corporate developments that have happened to DFI in recent two years. DFI has raised capital through a series of share placements equivalent to a total net proceeds of $43.6 million. So far, it has not indicated clearly their plans to use the net proceeds raised from the share placements. However, their rationale is that the share placements have increased trading liquidity of their shares and helped to improve their capital structure. They also issued bonus warrants to their shareholders at 2 bonus warrants for every 5 ordinary shares held at an exercise price of S$0.43 per share. Also, DFI has moved from catalist board to mainboard in 2016.

The non-executive chairman mentioned in the latest FY annual report about the volatile Malaysian Ringgit against the US Dollar exchange rates, weak consumer sentiment on the back of a rising inflationary environment and natural disasters like the flood situation in Thailand will continue to present a challenging business environment. However, DFI is ready for a competitive year ahead. And they are also continuing to make efforts in enhancing operational efficiency, cost management, intensifying marketing strategies and managing business risks prudently, as well as do continuous upgrade and improvement of their retail outlets and product assortments to attract more customers.

With their current situation and corporate developments of DFI in the recent two years as a backdrop, we shall discuss how DFI has performed in the last 5 years. Please note that as their full year financial period ends in Feb every year, I am looking at a slightly backdated period from Feb 12 to Feb 17. I believe it will be better to include their most recent year's performance which ends in Feb 18. However, since their most recent full year's performance is not out yet, my discussion will be only up to Feb 17 as the latest available full year financial results.

First, we look at how their revenues have grown over the past 5 years (Feb 12 to Feb 17). Revenues have grown at a compounded annual growth rate (CAGR) of 2.36%.

Next, we look at the growth rate of their operating profits. Operating profits have grown at a CAGR of 1.62% over the past 5 years.

Next, we look at the growth of profits attributable to shareholders of the company. Profits attributable to shareholders of the company have grown at a CAGR of 1.68% over the past 5 years.

Next, we look at the growth in diluted earnings per share (EPS) over the past 5 years. Diluted EPS has grown at a CAGR of 0.74% over the past 5 years.

Next, we look at the operating margins 5 years ago in Feb 12 and then in Feb 17 (their latest financial year results). The operating margin 5 years ago was 16.3% and after 5 years was 15.7%. I checked up their operating margin trend over the past 5 years and they were mostly maintained around current levels plus minus 1 to 2 %.

Next, we look at their net profit attributable to shareholders of company margins over the same period of 5 years. 5 years ago it was 11.9%. After 5 years, it was 11.5%.

I reached a conclusion based on the above that DFI have grown in their profitability. However, their growth in profitability is very slow with revenues, operating profits, net profits attributable to shareholders of company and EPS all growing at low single digits CAGR over the past 5 years from Feb 12 to Feb 17.

Perhaps their recent round of issuing share placements have also diluted their growth in EPS and I foresee that the bonus warrants will further dilute the shareholdings of shareholders in future unless the group can put the capital raised through these means into good use to increase their profitability and returns for their shareholders. Thus, I will give them some benefit of doubt that they will deploy these capital raised in a good manner to garner good returns on the current capital raised apart from citing reasons such as to improve their capital structure. Cash sitting still doing nothing will erode in value over time. Thus, we need to know what are the future plans the group has in terms of utilising their cash capital raised to further grow their group.

We now look at how their balance sheet has changed over time.. I will tabulate the comparison of some important metrics between close to 6 years ago (Feb 12) versus latest financial report (Nov 17).

Current ratio = 1.11 (Feb 12) vs 5.06 (Nov 17)
Quick ratio = 0.28 (Feb 12) vs 2.7 (Nov 17)
Debt to equity ratio = 0.28 (Feb 12) vs 0.002 (Nov 17)
Shareholder equity CAGR over the period (Feb 12 to Nov 17) = 9.55%

I noticed there were accumulated losses registered under the equity attributable to shareholders in their FY11 and FY12 annual report. I checked up earlier financial years and noticed that there were accumulated losses too. However, from Feb 12 to Nov 17, the accumulated losses have declined and turned into positive retained earnings. This shows that DFI more than 5 years ago were not doing well as they accumulated losses on their balance sheet but have since turned around to better profitability especially from Feb 12 onwards until now resulting in growth in retained earnings on their balance sheet.

I also noticed that they are now a net net company with their current assets more than their total liabilities. Indeed with the rounds of share placements made in 2016 plus repayment and paring down on their short term and long term debts, their current ratio, quick ratio, debt to equity ratio have improved tremendously such that they are also now a net net company flushed with cash. The nagging question came to my mind again. What are they going to do with so much cash they are holding now? Are there any exciting pipeline expansion and growth for the future? Please do not end up holding so much cash without knowing what to do with it.

DFI have also grown their shareholder equity well at close to double digits CAGR over the past period from Feb 12 to Nov 17 making their shareholders wealthier at a good growth rate.

Now, we look at the various returns of this group. The returns on assets for DFI have fluctuated quite a fair bit over the period from Feb 12 to Feb 17, but have remained at 10% and above reaching almost 30% in one of the year. The returns on equity have also fluctuated quite a fair bit but have remained at above 13% and even reached 40 over % in one of the year. The returns on invested capital have also fluctuated by quite a fair bit but have remained above 12% reaching even as high as close to 40% in one of the year. These various returns trend show us that DFI generally generates good returns but it seems that the returns can fluctuate quite a lot probably depending on their business performance for any year.

Next, we look at how their cashflows have performed in their growth over the same period of 5 years from Feb 12 to Feb 17. Operating cashflows have grown by a CAGR of 30.6% over the 5 years period. Free cashflows have grown by a CAGR of 32.2% over the 5 years period.

I noticed that DFI operating cashflows and free cashflows have fluctuated quite significantly over the 5 years period even though they have grown at an impressive CAGR of over 30%. This could be due to the changes in working capital from receivables, prepayments, inventories and payables which can potentially affect the operating cashflows by a large margin in any single year. Thus, it would be good to monitor and take note of this area of changes in working capital as it could potentially affect their operating cashflows significantly in any year. This also could suggest that it maybe not easy to estimate the growth in operating cashflows and free cashflows due to these inherent working capital changes which are difficult to grasp how it will change in any single year.

But nevertheless, since the capital expenditures of DFI has remained relatively stable and at low level, the operating cashflows even though which fluctuate significantly in any year should still be able to produce free cashflows on a long term basis given their historical trend. Perhaps the long term investor should monitor whether the operating cashflows and free cashflows will see a general growing increasing trend over time or not even while they may fluctuate significantly in any year.

Lastly, valuation wise, assuming a CAGR of 0.74% on the diluted EPS for the next 7 years, based on my method of estimation, DFI has a fair share price of $0.21. Based on the current traded price of DFI which is $0.26, the market is according a CAGR of 2% on the diluted EPS.

I did not use a discounted cashflows (DCF) model to work out the estimate of DFI fair share price. This is because it's cashflows for the most recent full year results ended Feb 17 are exceptionally better due to significant increase in changes in working capital which maybe a one-off distraction and noise to really picture that DFI can indeed enjoy such high CAGR in their operating and free cashflows for the long term. When I am not too sure on the long term performance of a particular metric, it is best to just leave it alone and not make a forecast on it.

I believe whether to invest or not in DFI will depend on any visible expansion and growth plans of DFI communicated by management going forward. If they are going to utilise the cash hoard they now have in good ways to further their growth and returns for shareholders, then DFI is an investment candidate worth considering. If they do not really know what they are going to do with this cash hoard, then this may not be a good investment candidate. I still prefer a company with visible growth and expansion plans, displaying good visible profitability and growth and backed by a strong balance sheet producing high returns to their shareholders. DFI may seem to have some of these attributes, but it will be good to have all to make a really big convincing investment proposition candidate.quote : jeremyowtaip.

For such a company that has been constantly rewarding its shareholders with stable and sustainable dividend for the past 5 years. In my opinion ,It would be good way to treat it as a dividend yield/income play counter.

The average dividend works out to be 0.209 cents .

I would roughly estimate the fair value of about 35 to 38 cents.

The current price of 26 cents, could be viewed as undervalue and may provide further upwards potential of 34% to reach the TP of 35 cents.

Other may have different way of working out their fair value.. 
Not a call to buy or sell. dyodd.

Would leave it to the eyes of the beholders to decide and stick to their investment methodology.

GENTING SING

Genting Sing - these are my thoughts and findings on Genting Singapore Plc.  Genting Singapore derive it's revenue mainly from the operation of Resorts World Sentosa, a large integrated lesiure and hospitality resort located on Sentosa island of Singapore. It features six uniquely themed hotels, a casino, one of the world's largest aquarium S.E.A. Aquarium, Southeast Asia’s only aquatic park integrated with marine life - Adventure Cove Waterpark, Southeast Asia’s first and only Universal Studios theme park – Universal Studios Singapore, Singapore’s largest destination spa – ESPA, a wide selection of indoor and outdoor MICE venues, and a variety of dining, retail and entertainment options. Genting Singapore has went through a series of capital raising through debts and equity to fund the building of Resorts World Sentosa. This was a very large project undertaken by Genting Singapore years back which ran into billions of Singapore dollars in order to achieve what we see now as the completed Resorts World Sentosa. It is with this backdrop that I will discuss the performance of Genting Singapore after having spent so much capital into this huge project. Resorts World Sentosa had it's grand opening in 2012. Thus, it has been officially opened for the past about 6 years. I shall look at Genting Singapore's performance from 2012 to 2017 over the span of 5 years after the grand opening of Resorts World Sentosa, where it's derives almost all it's revenues from this huge project.quote :
( jeremyowtaip)  First, we look at the compounded annual growth rate (CAGR) in revenues for Genting Sing. Over the past 5 years, it's revenues have not grown but instead decreased by about 18.8%. I was surprised why it's revenues did not grow but instead decreased. I took a look at the breakdown of it's revenues of which the majority of revenues came from it's gaming revenue (casino operations) while the other second major revenue stream came from it's non-gaming revenue (other non-casino operations). It's gaming revenue is around close to three times it's non-gaming revenue. We can see that the total revenue of Genting Sing really depends on their revenue derived from casino operations. Over the past 5 years, the gaming revenue has decreased while non-gaming revenue has increased to offset some of the decrease in gaming revenue. But due to the majority of revenue are derived from gaming revenue, the total revenue thus decreased over the past 5 years. We see that the revenue of the casino has decreased over the past 5 years. It is worth investigating further why was there a fall in revenue of casino operations over the past 5 years? Next, we look at the CAGR in operating profits. Operating profits have grown at a CAGR of 0.83% over the past 5 years. Despite a fall in revenues over the past 5 years, Genting Sing has still managed to grow it's operating profits at a meager rate. I see that they have managed to reduce their administrative expenses and also selling and distribution expenses over the past 5 years despite a fall in revenues to protect their operating profits from suffering a similar drop. However, a CAGR of 0.83% is still like not much growth at all! There are so many much better investment ideas out there which definitely produces much higher CAGR in their operating profits even over a short period of 5 years! Next, we look at the CAGR of net profit attributable to shareholders of company. This has grown at a CAGR of 0.46% over the past 5 years. This again confirms that the growth in profitability over the past 5 years was not great. Next, we look at the CAGR of diluted earnings per share (EPS) attributable to shareholders of company over the past 5 years. The diluted EPS has grown at CAGR of 0.76% over the past 5 years. Again, this is another confirmation that the growth in profitability over the past 5 years was not great. I looked at the individual years from 2012 to 2017 to see how the individual year's profitability has changed. The profitability has decreased and then increased again in 2017. The drop in profitability reflected in it's operating profit and net profit attributable to shareholders of company can be quite significant for example in 2015. Therefore, I reach a conclusion that for a shareholder of this company, one has to be prepared to face wild swings in the profitability of this company as the swings can be quite significant in any year. Of course, if an investor can time his entry to buy the shares at lower prices when the profitability has dropped to a low point in preparation for any potential significant recovery in profitability in subsequent year, this investment could be a good candidate to speculate on it's swing in profitabilities. As such, due to the low growth in profitability over the past 5 years, the various returns on assets, returns on equity and returns on invested capital were consistently at low single digits suggesting Genting Sing is a low return investment. Next, we look at how some of their balance sheet metrics have changed over the past 5 years. I tabulated the various metrics as follows for 2012 vs 2017: Current ratio = 4.29 (2012) vs 4.78 (2017) Quick ratio = 3.59 (2012) vs 4.58 (2017) Debt to equity ratio = 0.3 (2012) vs 0.16 (2017) Ordinary shareholder equity CAGR over 5 years = 2.34% Genting Sing's balance sheet has been very strong over the past 5 years. It did a series of capital raising through borrowings and equity over the past decade to fund the building of Resorts World Sentosa. However, the various balance sheet metrics reflected that Genting Sing did not have any problems with over-leveraging or liquidity issues over the past 5 years. Genting Sing grew ordinary shareholder equity at CAGR of 2.34% over the past 5 years thus making their shareholders wealthier in their investment in Genting Sing.

However, at a CAGR of 2.34%, it pales in comparison with many other companies out there which can grow their ordinary shareholder equity at much higher growth rates making their shareholders wealthier even faster. Next, we look at the growth in cashflows. Genting Sing grew their operating cashflows at a CAGR of 3.92% over the past 5 years. It grew it's free cashflows at a CAGR of 25.4%. I noticed that their capital expenditures have reduced significantly over the past 5 years in which the capital expenditures to purchase property and equipment has reduced sharply. Perhaps they have already completed most of their massive capital expenditures when they built the Resorts World Sentosa and for the first few years after it's grand opening in 2012, the ongoing capital expenditures requirement has continued to drop to a lower level. This reduction in capital expenditures have certainly helped to grow their free cashflows at high CAGR of double digits over the past 5 years.

Thus, Genting Sing is now reaping a good harvest from what it has previously sowed by getting free cashflows at a high CAGR on this huge investment in Resorts World Sentosa. As for current developments, Genting Sing has raised a Samurai bond of approximately $175 million to bid for casino license in Japan. It is still awaiting further legislation approval to allow the opening of casinos in Japan. Among the bidders are strong names like US's Las Vegas Sands and Macau's Galaxy Entertainment Group which have also expressed interest in vying for an entry into Japan market. I have attached a link to an article from Nikkei Asian Review which has details on the above development. Valuation wise, if we assume that Genting Sing will continue to grow their EPS at historical CAGR of 0.76% for next 7 years, using my method of estimation, the fair share price for it is $0.50. The market is trading Genting Sing at $1.12 which is assuming a higher CAGR of 7% to it's EPS. Can Genting Sing improve it's profitability significantly going forward at higher CAGR? If it can, then current share price is not over-valued. I also did a discounted cashflows analysis using a discount rate of 15% and the estimated intrinsic value per share comes out to $1.95. This is just an estimate and the intrinsic value per share could change significantly depending on the discount rate used. My conclusion is that if we focus on the forward profitability of Genting Sing, then it's share price could be over-valued now. However, if we focus on the forward growth in it's free cashflows, then Genting Sing is under-valued now. If we take both forward growth in profitability and free cashflows together with an average fair share price worked out from $0.50 and $1.95, it comes out to $1.225. Out of curiousity, I checked out SGX Stocks Facts to see what it reflected there for Genting Sing's current valuation based on an equal weighted combination of various ratios used in assessing Genting Sing's valuation score versus it's peers. The ratios used include P/E, P/B, P/FCF, dividend yield, EV/EBITDA and EV/sales. Based on an equal weighted combination of these various ratios, Genting Sing is currently estimated to be slightly over-valued as compared to it's peers. I think my main consideration in choosing a great investment idea is that it must not have any flaws or the only one or two flaws it have can be easily overcome in a short period of time. For Genting Sing, I see it's volatile profitability as a potential inherent weakness that is difficult to grasp even though it's reduction in capital expenditures and growth in free cashflows so far looks good. If there is another better investment idea which combines all growth in profitability, growth in free cashflows and strong balance sheet all looking good and the growths are visible into the next few years without the investor needing to guess on it, shouldn't he consider the investment idea that present all stars align together?

One plus factor is the dividend has been generally increasing from the initial 1 cents to 3.5 cents. An increase of 2.5 x .
Different individual may have different way of calculating the intrinsic value. I may roughly estimate the intrinsic value ( cashflows) as $1.95 x 0.8 = $1.56. The upside potential of 39% base on current price of $1.12

Thus, if I were to consider Genting Sing, it will only be a speculative value play when very visible value emerges rather than a long term investment.

SPH

Singapore Press Holdings Ltd

Incorporated in 1984, main board-listed Singapore Press Holdings Ltd (SPH) is Asia’s leading media organisation, engaging minds and enriching lives across multiple languages and platforms.

Media

SPH's core business is publishing of newspapers, magazines and books in both print and digital editions. It also owns other digital products, online classifieds, radio stations and outdoor media.

Properties

On the property front, SPH owns 70% in a real estate investment trust called SPH REIT which comprises Paragon, a premier upscale retail mall and medical suite/office property in Orchard Road and The Clementi Mall, a mid-market suburban mall.

SPH also owns and operates The Seletar Mall. It built an upmarket residential condominium, Sky@eleven, at Thomson Road, and is developing a new commercial cum residential site at Woodleigh Road. It also has a stake in Chinatown Point.

Other Businesses

It is in the aged care sector and owns Orange Valley Healthcare with the acquisition of the nursing home provider for an invested amount of $164 million in April 2017, Singapore’s largest private nursing home operator.

SPH runs a regional events arm and a chain of Buzz retail outlets. It also invested in the education business - MindChamps to further strengthen its education portfolio and entering into a joint venture in August 2017 that involves investing up to $8.5 million in Han Language Centre. When completed, SPH will hold a 75 per cent share in Han Language Centre.

Singapore Press Holdings is also increasing its stake in Handshakes, the analytics platform that visually and interactively maps out relationships and events between companies and persons.

Wholly-owned subsidiary, SPH Interactive Pte Ltd (SPHI) has subscribed for an additional 5% in the total share capital of DC Frontiers (DCF), the operator of Handshakes, for $2.1 million. Following the completion of the transaction, SPHI's stake in DCF will increase from 20% to 25%.

As can be seen from the Past years gross revenue has been dropping from 1231m to 1018m.

Total page count decline moderated at -12.7% yoy. Based on our page count of Singapore Press Holdings’ (SPH) The Straits Times, total page count was down 12.7% yoy in 2QFY18 while the three segments (Recruit, Classifieds, Display) reported a 19%, 16% and 11% yoy decline in page counts respectively. The decline was driven primarily by the Display segment, which accounted for two-thirds of the total yoy decline on an absolute basis. The quarter’s decline represented a moderation from 1QFY18’s -13.6% yoy.

The drop in media (print ) may not be able to cover by the revenue generated by other businesses. It may take quite sometimes before we can see further improvement.

Net Income has been dropping from $404 million(2014) to $361 million (2017).

Dividend has been decreasing from 15 cents to current 9 cents. A drop of whopping 40%.

In my opinion,It seems that SPH has successfully diversified it's revenue streams away from it's traditional core print and media business. Now, property and other income segments contribute more profits before taxation than core print and media business to stem the overall fall in profits. Also, cost cutting measures are seeing results. Now, SPH is a true conglomerate that derives it's profits from different diversified sources and no longer heavy on it's core print and media business. 

Will this be the turnaround point finally for SPH?

Today the share price has again weaken by another 8 cents to $2.46. 

With NAV at $2.207, PE of 11.5X, Dividend yield of 3.6% is looking quite attractive.

Looking at the past dividend being payout. The average dividend for past 5 years is about 12 cents. I have roughly estimated the fair value is about $2.40.

The current price is just about 8 cents shy away from the fair value of $2.40 and roughly about 28 cents away from the NAV. It might be a good candidate / opportunity to have a second look on this true blue chips counter..