Winas (formerly: Sinwa Limited)

[BeDisciplined]

The company looks cheap in PB sense but fairly valued base on PE. The management has a "good" history of making bad diversification ventures one after another. They are also very optimistic in projections but usually cant deliver.

1) "Though our charter (KS TITAN II) was recently terminated, we remain very confident of securing another charter for this vessel. " (AR 2009)

What happen?
"Our jointly held jack-up liftboat (KS TItan II) was off-hire for the entire year of 2010" (AR 2010)

2) "The decision to expand our services to include engineering, steelworks, and heat exchangers operations is definitely a positive step forward for the Group." (AR 2011)

What happen?
"Despite increases in revenue in the engineering division in FY2012, the revenue were not regular during the year and hence resulted in some unutilised capacity at the back of committed overhead costs. Margins were also squeezed as the industry slows down and the costs of employing foreign workers increases" (FY2012)

The company management people remains the same. I think they lack business foresight. Can we count on them to make the same mistakes, i bet they will.

Bibi, I am really impressed with your tracking of this stock.

[Bibi]

The company looks cheap in PB sense but fairly valued base on PE. The management has a "good" history of making bad diversification ventures one after another. They are also very optimistic in projections but usually cant deliver.

1) "Though our charter (KS TITAN II) was recently terminated, we remain very confident of securing another charter for this vessel. " (AR 2009)

What happen?
"Our jointly held jack-up liftboat (KS TItan II) was off-hire for the entire year of 2010" (AR 2010)

2) "The decision to expand our services to include engineering, steelworks, and heat exchangers operations is definitely a positive step forward for the Group." (AR 2011)

What happen?
"Despite increases in revenue in the engineering division in FY2012, the revenue were not regular during the year and hence resulted in some unutilised capacity at the back of committed overhead costs. Margins were also squeezed as the industry slows down and the costs of employing foreign workers increases" (FY2012)

The company management people remains the same. I think they lack business foresight. Can we count on them to make the same mistakes, i bet they will.

Bibi, I am really impressed with your tracking of this stock.

I am thinking whether this stock is worth buying thats why i studied it. Usually when i buy a stock, i will keep averaging down if the price drops. So its important to me the management is good. Base on PB of 0.7 times (which equates to about 20 cents) it is still fair. But its PE will be around 12, which is ex.

[Ben]

The company looks cheap in PB sense but fairly valued base on PE. The management has a "good" history of making bad diversification ventures one after another. They are also very optimistic in projections but usually cant deliver.

1) "Though our charter (KS TITAN II) was recently terminated, we remain very confident of securing another charter for this vessel. " (AR 2009)

What happen?
"Our jointly held jack-up liftboat (KS TItan II) was off-hire for the entire year of 2010" (AR 2010)

2) "The decision to expand our services to include engineering, steelworks, and heat exchangers operations is definitely a positive step forward for the Group." (AR 2011)

What happen?
"Despite increases in revenue in the engineering division in FY2012, the revenue were not regular during the year and hence resulted in some unutilised capacity at the back of committed overhead costs. Margins were also squeezed as the industry slows down and the costs of employing foreign workers increases" (FY2012)

The company management people remains the same. I think they lack business foresight. Can we count on them to make the same mistakes, i bet they will.

Whatever you said is a fact. They did made mistakes in trying to diversify into non core areas, though some of these businesses seem to compliment their main business. That is business, there is always some risk involved, no such things as sure-win, sure-eat . But to label the management team as lack of business foresight due to these recent business failure is really unjustified.

It is fair to go a little deeper and further in history to understand and judge this company.

Sinwa is a company with history that dates back to 1960s. From a humble beginning, its turnover now is more than $100 million a year. It has presence in 4 countries (Singapore, China, Australia and Malaysia), and more than 100 ports. To be able to grow into this size today in a highly competitive industry, I don’t see how a team that is lacking in business foresight can achieve that.

As far as I can remember, the company has been profitable every year until FY2012. They remain profitable in 2003 (SARS) and 2008 – 2009 (GFC). The loss in FY2012 was mainly due to the losses sustained from chartering business and engineering business, which they have since sold off.

The company has also been paying dividends every year with the exception in FY2010 and FY2012. And now they are paying a special dividends of 1.5c from the sales proceed of selling off the Liftboat KS TITAN 2. This dividends payable is about $5 million. I view this as a friendly gesture to shareholders.

The company is now back to its origin: logistic, supplies and agency. This is their forte. Based on FY 2012 and FY 2011 performance, this segment contributes about $6 million in profit or EPS of 1.8c. Based on today’s price of 15c, PE is about 8X.

In conclusion, with PE of 8X, NTA at 26c, yield of 10% (and that is assuming no dividends declare this year other than the 1.5c special dividends), and a long history in the business and a wide network in AP, you can judge if this is a company worth investing and the management worth their salt.

[Bibi]

Of cos i know there is no such thing as sure eat one. But you notice the management talk like its sure eat ("very confident", "definitely" etc) but end up they vomitted out everything.

I attribute it is because they think they got the business foresight that allows them to confidently make such comments. They were not able to anticipate the good old days of cheap relentless supply of foreign labour will not last. When they realise it (within a year of acquiring Sinwa Engineering), they decided to dispose it off.

Unfortunately i do not have AR dated 2009 earlier. I do not know what is the growth rate of their main business. At 15 cts, PE is 8 is consider not cheap if their main business growth is going to be stagnant for the next few years. And the 10% dividend is only one-off.

[pianist]

My concern - do they have anymore liftboat?

[LionFlyer]

How would you rate Sinwa with Swissco? I have been looking at Swissco recently and will probably do further research. The PE is at a relatively low 7, while their PTB is fully valued at 1 and they have generated a healthy level of cash. I haven't really looked at their respective business areas so I can't really tell yet if they would do go going ahead.

[Ben]

Obviously the company has paid a dear price for the wrong ventures, and I hope they learnt from these million dollars mistakes and have better “business foresight” now. Somehow I feel that they are the victim of they own success. For years, they are quite successful in building up their main business, increasing their operational coverage both in depth and width. Sales have grown remarkably since 2002. However, their bottom line growth could not match the top line growth, and this is probably because the industry is very competitive. So instead of be contented with slow and stable growth, they probably got a little adventurous and venture into the more glamorous offshore sector which proved to be unsuccessful due to lack of expertise, instead of foresight.

Now that they are back to where they started, I am giving them a benefit of doubts that they can continue to be profitable from now on, if not every years, at least most of the years. I hope to see them increasing their operation presence in the AP region, building on their already extensive network. The ang-mo is now the CEO, but it is obvious Mike Sim is still the man in control. He is the man who brings Sinwa from where it was to where it is now. Of course, he is also the man who makes the few million dollar mistakes. On balance, I think he has done more goods to the company than bad.

I am in for the long haul, as long as the company is profitable & growing (ok if it is slow growth), with a track record of dividends payment, I am not too concern with the share price movement or liquidity of trading.

These are all my personal opinion.

[dydx]

In its present and original form, Sinwa will again be attractive to trade buyers or financial investors.

[Ben]

While I have expected Sinwa price to run up, I didn’t expect it to run up so fast, and so much. Since announcing its disposal of the loss making businesses in late Mar, its price has risen by more than 40% in less than one month! Is there something more than meets the eye?

I also noticed that the increased in price is not done with high volume, although comparatively speaking it is more active now as compared to before. This is good news to me as I think the buying is not speculative. So investors who bought in recently probably appreciate the good value in this company.

[pianist]

i just sold a some dozens lots this morning...dunno if is a wise thing to do...hmm