Boustead Singapore

Boustead do have an energy segment in the oil/gas. That segment has not been doing well for a few years. Despite revenue increasing, its profit dwindles as its margin gets eroded due to competition from other oil/gas players. Perhaps investors or shortist think this segment will start to make losses if low oil price continues. Vested but do not think i will increase my stake further. Boustead stock price has been a laggard for many years.

(22-03-2020, 08:14 PM)Bibi Wrote: Boustead do have an energy segment in the oil/gas. That segment has not been doing well for a few years. Despite revenue increasing, its profit dwindles as its margin gets eroded due to competition from other oil/gas players. Perhaps investors or shortist think this segment will start to make losses if low oil price continues.  Vested but do not think i will increase my stake further. Boustead stock price has been a laggard for many years.

O&G is about 20% of the business, no. 1 is real estate, followed by geospatial (ESRI). Other than Boustead Projects, nothing exciting in the last few years and I think this is a challenge today and the future. The question is also affected by the succession plans. FF Wong is passing the baton to the son Wong YL and well, I haven't seen anything spectacular or transformation so far.

(23-03-2020, 04:19 PM)LionFlyer Wrote:

(22-03-2020, 08:14 PM)Bibi Wrote: Boustead do have an energy segment in the oil/gas. That segment has not been doing well for a few years. Despite revenue increasing, its profit dwindles as its margin gets eroded due to competition from other oil/gas players. Perhaps investors or shortist think this segment will start to make losses if low oil price continues.  Vested but do not think i will increase my stake further. Boustead stock price has been a laggard for many years.

O&G is about 20% of the business, no. 1 is real estate, followed by geospatial (ESRI). Other than Boustead Projects, nothing exciting in the last few years and I think this is a challenge today and the future. The question is also affected by the succession plans. FF Wong is passing the baton to the son Wong YL and well, I haven't seen anything spectacular or transformation so far.

In 2015, O&G segment contributed $35 mil net profit about on par with BP. In 2019 it became a mere $1.1 mil. Maybe next few years it will contribute to losses dragging down other segments profits. There are quite some other companies with better prospects now that most have been beaten down. Even with covid over, I believe boustead price will remain a laggard as I see low oil price will remain after covid is over.

I reckon the main value of Boustead at this moment is the their warchest!

Minus off their BP shares at current price and minus off BP net cash, basically Boustead is selling at less than their net cash!!

FF Wong has persevered with their idled cash for SO LONG!!
Now he is finally proven right!

The question is whether he will strike (the gold) or miss the boat again (as per 2008)!!

Increasing my stake in Boustead and BP


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(23-03-2020, 07:58 PM)ksir Wrote: I reckon the main value of Boustead at this moment is the their warchest!

Minus off their BP shares at current price and minus off BP net cash, basically Boustead is selling at less than their net cash!!

FF Wong has persevered with their idled cash for SO LONG!!
Now he is finally proven right!

The question is whether he will strike (the gold) or miss the boat again (as per 2008)!!

Increasing my stake in Boustead and BP


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BP alone has RNAV of $1.80 (conservatively) and Boustead’s share is one third of BP or $0.60.

The current Boustead share price ($0.56) is dirt cheap !!!!

The rest of Boustead comes free
A. Geo spatial business with valuation close to Boustead’s share of BP ($0.40 to $0.50)
B. Boustead own net cash holding ($0.20 or $100mil)
C. Engineering arm ( one can fully discount this part to ZERO if need be). Contract wins to date about $200mil. So still have some worth.
D. The emerging health care arm ($0.05 to $0.10)

I don’t mind if FF Wong takes the company private at $0.80 and return cash to all shareholders !!!


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That is true. Wong Fong Fui is a very discipline asset allocator. He would rather give up a deal than risk overpaying. Curious what will he do next with all that cash. Maybe he might even accelerate his buybacks.

(24-03-2020, 08:36 AM)holymage Wrote: That is true. Wong Fong Fui is a very discipline asset allocator. He would rather give up a deal than risk overpaying. Curious what will he do next with all that cash. Maybe he might even accelerate his buybacks.

I noticed that he is more into buying cheap companies to turn it around and NOT buying great companies in fair price.
Hence it's rather hard for Boustead to scale up and grow!
They always need his (or some others, rare) master Turnaround skill.

His strength is in waiting patiently for his high Margin-of-safety.


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What is your view if Wong FF plough the money into o&g segment. Wong FF, being a chemical engineer I believe he might do that. He made a personal investment in Falcon Energy few years back. Making more investments into o&g industries do you all think it will be a good idea?

(22-03-2020, 08:14 PM)Bibi Wrote: Boustead do have an energy segment in the oil/gas. That segment has not been doing well for a few years. Despite revenue increasing, its profit dwindles as its margin gets eroded due to competition from other oil/gas players. Perhaps investors or shortist think this segment will start to make losses if low oil price continues.  Vested but do not think i will increase my stake further. Boustead stock price has been a laggard for many years.

the recent contracts were won before the oil prices collapsed. Hence, the higher profit margin had already been locked in, as can be deciphered from their Q1/Q2 engineering segment results. 

if oil price remains depressed, then the engineering arm will just not win new contracts. Don't have to go and bid contract and then lose money because of low profit margin. In any case, we can write off the entire engineering arm if need be.

To me, the investment in boustead is in their watchest!
If they don't deploy the long idled cash wisely in this downturn, their return of total capital is not attractive even at this price.

I'd rather invest in BP which has a long run visible growth path.
Their challenge is clearer, in execution!

While Boustead future growth is always hindered by their available Option (the cash).
It's like the dude is full of potential (the cash) but yet never really delivers


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