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The 2 concerns i have in regards to the acquisition:
1. It is quite small and while they can ride on long term aging trend, i am not sure it can grow big even in next 5-10 years.
2. The seller (and the CEO) not keeping any stakes after the sell.
Hence the issue of not much skin in the game.
That is exactly my thinking... esp for #1. He bought it cheap by NTA standard.
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09-09-2018, 06:47 PM
(This post was last modified: 09-09-2018, 06:49 PM by Wildreamz.)
Boustead is a solid company trading at very low valuations (IMO) ~11x P/E (~3.8% dividends) according to yahoo finance.
Geospatial engineering market (44% of group's profit) is projected to grow at a CAGR of 7% to 2026 (i.e. double every 10 years;
http://www.techyounme.com/geospatial-ima...et-growth/), oil prices are stabilizing.
Too cheap to ignore? Or is there some one time profit/loss event that I missed in this past year?
“If you buy a business just because it’s undervalued, then you have to worry about selling it when it reaches its intrinsic value. That’s hard. But if you can buy a few great companies, then you can sit on your ass. That’s a good thing.” - Charlie Munger
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The impact of adoption of SFRS(I) 15 to Geospatial is rather curious to me.
In the explanation of adoption of SFRS15, they concluded that there is no significant impact, only the presentation of WIP.
But increase of top line of Geospatial was 51% which we are not sure how much is due to SFRS15.
That aside, I am quite curious of the newbie whiterock:
1. Acquisition price S$19M (PE 15.1)
Inverted to arrived the Earning for FY2017 as S$1.26M.
2. Revenue in FY2017 was S$35.7M.
3. Net Margin was 3.5%.
It is either their service and value add are NOT as great as their presentation
or their RnD & initial costs (of expanding) are high.
I hope it is the latter rather than the former.
The WhiteRock Medical expansion (only contributed top line of S$1.67M despite presented as having most opportunity and value-add) is probably how Boustead's Warchest can value-add.
I guess they want to move away from just selling products & services to hospitals or care providers.
And into providing the solution directly to end-user (consumers).
I guess Whiterock future is bright, the 1billion dollar question is the execution.
For that, generally Boustead units under FF Wong are well-known for that exact strength!
My views are your Gilbert & Sullivan's:
"The flowers that bloom in the spring, have nothing to do with the case".
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We should see contributions from WhiteRock from 2Q FY 2019 onwards - then can get a sense of how the business has improved or declined since acquisition. Work out some numbers (e.g. revenue yoy increase/decrease) and also PBT margin.
I get the impression that there should be a good runway for growth for WhiteRock, otherwise FF Wong would not even consider purchasing it. After all, he rejected so many candidates over the years so his selection criteria must be pretty stringent - that in itself says something about the WhiteRock acquisition already.
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Financial Results for the Year Ended 31 March 2019 ("FY2019")
Highlights :
1. Revenue for FY2019 increased 22% year-on-year to S$470.6 million
2. The Real Estate Solutions Division (Boustead Projects) continued to be the Group’s top revenue contributor for the 12th consecutive year, growing 38% year-on-year to S$234.2 million
3. The Energy-Related Engineering Division’s revenue climbed 8% year-on-year to S$102.5 million
4. Net profit increased 24% year-on-year to S$32.5 million
5. The Group’s current order book backlog stands at a record full-year announcement level of S$763 million
6. The Group’s net asset value per share strengthened to 68.2 cents at the end of FY2019 from 64.2 cents at the end of FY2018
7. The net cash position remained healthy at S$99.3 million, translating to a net cash per share position of 20.1 cents
8. The Group held S$60.4 million in investment securities, of which about half of the amount is highly liquid
9. The Board has proposed a final ordinary dividend of 2 cents per share payable in cash/scrip for shareholders’ approval.
More details in :
1.
https://links.sgx.com/FileOpen/Boustead_...eID=561060
2.
https://links.sgx.com/FileOpen/Boustead_...eID=561062
3.
https://links.sgx.com/FileOpen/Appendix_...eID=561061
Specuvestor: Asset - Business - Structure.
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As difficult as ever to pull more dividend out of Mr Wong.
Don’t think Boustead ex-BP need much working capital.
Expansion is so far very minimum.
Sent from my iPad using Tapatalk
My views are your Gilbert & Sullivan's:
"The flowers that bloom in the spring, have nothing to do with the case".
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We knew that Boustead Prjs used to be a subsidary of Boustead. Boustead spawned it off but still withheld 51%+ of Boustead Prj.
May I ask, when calculating Boustead's equity, eps, pb or pe, should one include the contributions from Boustead Prjs? If not, why is that the case? Its PB based on current price if I include Boustead Prj is 0.75, excluding it is 1.07. Its a big difference in my investing decision.
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Does anyone happen to know if anything interesting happened at the AGM? Seems like major shareholders have been selling off and I noticed about a 10% rejection towards the share buy back mandate
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