Boustead Singapore

[mkzhou88]

good time to buy in now?

[Bibi]

Based on your post, does this mean that a mandatory offer will be held since the brother in law is not a deemed interest?

There is another rule which states that if a mandatory offer is triggered, the co shld suspend trading within 24 hours and make an announcement on the offer. The fact that Boustead didn't do that means no mandatory offer is triggered I guess.

[beefjerky]

Hmm I see. Thank you.

[Curiousparty]

https://research.sginvestors.io/2019/09/...09-23.html

Boustead is an engineering company focusing on industrial real estate and energy; it also holds exclusive distributorship of Esri’s GIS for 8 countries.
■ The group has a bright overall outlook, with order book backlog of both its real estate and energy segments at a 5-year high as of end-Jun 2019.
■ Meanwhile, we believe its geospatial technology business continues to enjoy strong growth potential, riding on the “smart city” wave.

■ Initiate coverage with an Add rating and a TP of S$1.00. Potential REIT launch and further order wins in energy segment are potential catalysts.

[heyjojos]

I have a question for the buddies here. Who is going to benefit more from a $/share perspective when the potential REIT launch do occur. In my mind, I always thought it will be Boustead Project since they own the properties and from the lesser number of outstanding shares, theirs is about ~320 million outstanding shares vs Boustead Singapore which has about 500 million; albeit they own 53% of Boustead Project. Can anyone enlighten?

[money]

I have a question for the buddies here.  Who is going to benefit more from a $/share perspective when the potential REIT launch do occur.  In my mind, I always thought it will be Boustead Project since they own the properties and from the lesser number of outstanding shares, theirs is about ~320 million outstanding shares vs Boustead Singapore which has about 500 million; albeit they own 53% of Boustead Project.  Can anyone enlighten?

If the holding company (BS) is not trading at a much larger discount to its intrinsic value compared to BP's, then i think it is better to just buy boustead project directly.

[Curiousparty]

https://www.theedgesingapore.com/capital...t-tailspin

The list above had omitted one Good Company - Boustead
• Net cash of $0.40.
• Plus investment securities of ~$0.10. Giving a total of $0.50.

Share price (as of 19 March 2020) = $0.56
• 72%  of market cap is backed by NET Cash
• 90% of market cap is backed by Net Cash + Investment Securities

It was quite absurd that Boustead is currently trading at only 56 cents (as of 19 March 2020)
• The net cash is 40 cents plus the investment securities (which worth about 10 cent), give a total worth of about 50 cents.
• This implies that the rest of Boustead Group is currently priced at only 6 cents, i.e. Boustead’s 53% share of Boustead Project (BP) and BP’s portfolio of industrial properties (with BP’s RNAV nearing $2.00), Boustead’s own geo-spatial business, engineering businesses and the new health care arm.

[Financial Statement]
The Group’s net asset value per share decreased to 67.5 cents at the end of 1H FY2020 from 68.2 cents at the end of FY2019, following dividends paid to shareholders and non-controlling interests, the allotment of new shares pursuant to the Scrip Dividend Scheme and the purchase of treasury shares.  The net cash position (i.e. net of all bank borrowings) was significantly boosted to S$195.8 million at the end of 1H FY2020, translating to a net cash per share position of 39.9 cents.  In addition, the Group held S$53.9 million in investment securities at the end of 1H FY2020, of which almost half of the amount is highly liquid.

These investment securities refer to:
• About S$31.4 million at Boustead Projects’ level that equates to a 4% shareholding in the Perennial Tongzhou Mixed Development, still under construction, and which is stated at Boustead Projects’ level as ‘Financial assets at FVOCI’.
• The remainder of about S$22.5 million are part of the cash management programme, comprising mainly of fixed income debt instruments such as bonds.  There are also some equities and fund investments within that amount.


Boustead has been conducting share buyback almost every single day.
https://sginvestors.io/sgx/stock/f9d-bou...ce-history

[dreamybear]

Thanks Curiousparty for your detailed analysis of Boustead.

Actually other than Boustead, quite a no. of net cash / cash rich counters have also been beaten down to low levels. Offhand, I believe there are even HK counters which are trading lower than net cash.

Perhaps other than margin calls, algo trading etc driving down share prices, the mkt cld also be factoring in profit/revenue losses for some months of 2020 or perhaps impairments in the balance sheet ?

While not all companies are created equal, it is only in a severe crisis that we get good opportunities to accumulate such a wide range of counters which we have long been eyeing. Patience and  labour finally gets a chance to pay off, perhaps the only problem left is limited cash to buy deep(DCA) and buy wide(selective diversification).

[karlmarx]

https://www.theedgesingapore.com/capital...t-tailspin

The list above had omitted one Good Company - Boustead
• Net cash of $0.40.
• Plus investment securities of ~$0.10. Giving a total of $0.50.

There are a lot more companies with a very high net cash to market cap ratio, or net cash more than market cap, which are not on the list.

The ones on PS' list are probably the ones which they want to promote. And possibly offload.

[Curiousparty]

Thanks Curiousparty for your detailed analysis of Boustead.

Actually other than Boustead, quite a no. of net cash / cash rich counters have also been beaten down to low levels. Offhand, I believe there are even HK counters which are trading lower than net cash.

Perhaps other than margin calls, algo trading etc driving down share prices, the mkt cld also be factoring in profit/revenue losses for some months of 2020 or perhaps impairments in the balance sheet ?

While not all companies are created equal, it is only in a severe crisis that we get good opportunities to accumulate such a wide range of counters which we have long been eyeing. Patience and  labour finally gets a chance to pay off, perhaps the only problem left is limited cash to buy deep(DCA) and buy wide(selective diversification).

think it should still be Business As Usual for Boustead's business segments. probably some project delays from Boustead project side but should not be a concern since bulk of profit for BP is going to be driven by the leasing projects ,and not so much from the design/build segment.


BP has very little exposure to oil & gas corporations in their leasehold portfolio after AusGroup exited.  Given the financial strength of most of BP clients in their leasehold portfolio,  most of them should be able to ride out challenges over a prolonged period.

Boustead's geo-spatial clients are mainly governments. 

https://links.sgx.com/FileOpen/Boustead_...eID=585740

https://research.sginvestors.io/2020/01/...01-02.html