ISDN Holdings

[dreamybear]

Finally, commercialization of one of its hydropower plants. That should bring on significant cashflow after many years of investment. Hopefully they have found the way to make this work at a faster pace.

https://links.sgx.com/FileOpen/eISDN-Ann...eID=743092

CIMB has released an updated research report regarding this new development.

I am puzzled why is a net cash company with good prospects (riding on the automation trend) trading at only a circa 9x P/E for the past few years.

I am inclined to think that one of the main reasons could be the hydro plants, in which the company has invested a sizeable amt : $77m as of 31 Dec 2020*. In my view, ISDN could be trading at a higher multiple if it is a pure automation play.

-----------

CIMB report
https://rfs.cgs-cimb.com/api/download?fi...6bd47aafbe
".... we interpret meaningful contribution to mean 5- 10% of net profit and assume that Lau Biang 1 could add an incremental 10% to our FY23-24F net profit forecasts. Hence, our FY23-24F EPS forecasts are raised by 11.1%. Rolling over to FY24F (previously FY23F), our TP increases to S$0.55 based on 8.9x (5- year average P/E multiple). Previously the 5-year average P/E multiple was 8.6x....."

*AGM2021 Q&A
https://links.sgx.com/FileOpen/ISDN-Ann-...eID=664142