Boustead Singapore

Thread Rating:
  • 2 Vote(s) - 5 Average
  • 1
  • 2
  • 3
  • 4
  • 5
(06-06-2021, 10:33 AM)fallscushion Wrote: It's over 10years already and I don't think Mr Wong is going to change his stand soon (if ever).

<vested, near core>


Holding excessive cash is not really effective capital management and conventional wisdom says you should either return it to the shareholders or spend on acquisition. After holding Boustead for around 10 years, I'm resigned to the fact that this would depend on the next generation of leaders after FF Wong. If he wanted to return the money or spend it, there were opportunities to do so during that period.
You can count on the greed of man for the next recession to happen.
Reply
(06-06-2021, 10:39 AM)fallscushion Wrote:
(06-06-2021, 10:15 AM)Bibi Wrote: Is Google Map a competitor to Boustead Geospatial solutions ESRI?

https://www.g2.com/compare/esri-arcgis-v...e-maps-api

Google Map used to have a version for Corporate customers, but was ditched a few years ago and IIRC they have asked (or facilitated) the customers to switch to ESRI.

https://www.esri.com/en-us/landing-page/...p/overview

Nice. Thank you.
Reply
(05-06-2021, 10:38 PM)CY09 Wrote: I am interested in the geo spatial segment.

Over the past 5 years, revenue has grown CAGR of 11% and profits before tax by 14%. It shows that due to operating leverage, net profits can grow faster than revenue.

If it follows the P/E of software companies, the valuation can range from 15-20 times of current earnings which is slightly more than the current market cap of Boustead Singapore.

<vested>

May I ask where did you get the PE ratios of the software companies?

Boustead's geo-spatial segment is essentially a monopoly services - should merit the higher end of the PE ratios??
[I am not here to promote any stocks. Please always do your own research before embarking on any investment decision. I will not be liable for any of your own decisions. Your use of any information or materials is entirely at your own risk. It is your responsibility to ensure that any products, services or information meet your specific requirements. I do not produce material which meets the objectives of any specific financial and risk profile of investors.]
Reply
(07-06-2021, 12:55 PM)Curiousparty Wrote:
(05-06-2021, 10:38 PM)CY09 Wrote: I am interested in the geo spatial segment.

Over the past 5 years, revenue has grown CAGR of 11% and profits before tax by 14%. It shows that due to operating leverage, net profits can grow faster than revenue.

If it follows the P/E of software companies, the valuation can range from 15-20 times of current earnings which is slightly more than the current market cap of Boustead Singapore.

<vested>

May I ask where did you get the PE ratios of the software companies?

Boustead's geo-spatial segment is essentially a monopoly services - should merit the higher end of the PE ratios??

First of all, they only own 88% of the subsidiaries operating the geo-spatial business, so you'll have to add a 12% discount to any valuation.

Second, there is a non-zero chance that they will lose the distributorship (l know I know, it's a very low probability). But if that happens, your valuation for this segment will not settle at any P/E ratio. It will be zero.
Reply
(07-06-2021, 03:39 PM)D123 Wrote:
(07-06-2021, 12:55 PM)Curiousparty Wrote:
(05-06-2021, 10:38 PM)CY09 Wrote: I am interested in the geo spatial segment.

Over the past 5 years, revenue has grown CAGR of 11% and profits before tax by 14%. It shows that due to operating leverage, net profits can grow faster than revenue.

If it follows the P/E of software companies, the valuation can range from 15-20 times of current earnings which is slightly more than the current market cap of Boustead Singapore.

<vested>

May I ask where did you get the PE ratios of the software companies?

Boustead's geo-spatial segment is essentially a monopoly services - should merit the higher end of the PE ratios??

First of all, they only own 88% of the subsidiaries operating the geo-spatial business, so you'll have to add a 12% discount to any valuation.

Second, there is a non-zero chance that they will lose the distributorship (l know I know, it's a very low probability). But if that happens, your valuation for this segment will not settle at any P/E ratio. It will be zero.

good Smile

There is a low chance that Boustead will go bankrupt too. Any valuation would thus be quite meaningless...haha...

There is also a chance (albeit very low) that some banks may lose their coveted banking license from MAS right?
[I am not here to promote any stocks. Please always do your own research before embarking on any investment decision. I will not be liable for any of your own decisions. Your use of any information or materials is entirely at your own risk. It is your responsibility to ensure that any products, services or information meet your specific requirements. I do not produce material which meets the objectives of any specific financial and risk profile of investors.]
Reply
(06-06-2021, 02:09 PM)LionFlyer Wrote:
(06-06-2021, 10:33 AM)fallscushion Wrote: It's over 10years already and I don't think Mr Wong is going to change his stand soon (if ever).

<vested, near core>


Holding excessive cash is not really effective capital management and conventional wisdom says you should either return it to the shareholders or spend on acquisition. After holding Boustead for around 10 years, I'm resigned to the fact that this would depend on the next generation of leaders after FF Wong. If he wanted to return the money or spend it, there were opportunities to do so during that period.


Mr Wong has made it no secret that he is willing to wait and be patient to make the right acquisitions and investments.  It has been communicated in his messages over the years as well.  He is similar in mentality and philosophy to Warren Buffett, so that is the way that he views business, M&A and investments, with an extremely long view.

Based on Mr Wong and the senior leadership team’s track record, when value is unlocked, our shareholders have been significantly rewarded as well.  Examples include:

• The distribution of EasyCall International Ltd by dividend-in-specie in 2006.  EasyCall was turned around by Boustead through the establishment of Tianjin University of Commerce Boustead College as a full-fledged university in 2002, pivoting away from EasyCall’s sunset paging business.  In 2006, the share price of each EasyCall share at distribution was about 7.8 Singapore cents.  In that same year, we thereafter placed out EasyCall shares to Raffles Education and the share price peaked at 80 cents before being privatised by Raffles Education at 50 cents.  For shareholders who held on and divested during the peak or even at privatisation, they would have been greatly rewarded.

• The distribution of Boustead Projects Ltd by dividend-in-specie in 2015.  The implied share price of each Boustead Projects share based on NAV at distribution was about 58 Singapore cents.  We are already seeing the value creation with current NAV of S$1.37 and the establishment of Boustead Industrial Fund, not to mention that RNAV would be at higher levels.  Again, shareholders who held on would have been greatly rewarded.

• The growth all of the other major divisions significantly over the time period from 1996 until present day.  Mr Wong entered Boustead at about 26 cents per share, paying a premium of more than 2x to enter because he believed in the Boustead brand name acquired and ability to create value using the Boustead brand name.  Shareholders who entered Boustead at exactly the same time would have been greatly rewarded with the cash dividends, dividends-in-specie, share buybacks and capital appreciation over that period.

Mr Wong would be the largest beneficiary if higher dividends were paid out.  However, he has always kept in mind the sustainability of businesses and value creation.  While more dividends could be paid out, it would be unwelcome to shareholders if we need to call for more capital when we come across the right opportunity.

Hope that helps to explain Mr Wong and the senior leadership team’s philosophy.
[I am not here to promote any stocks. Please always do your own research before embarking on any investment decision. I will not be liable for any of your own decisions. Your use of any information or materials is entirely at your own risk. It is your responsibility to ensure that any products, services or information meet your specific requirements. I do not produce material which meets the objectives of any specific financial and risk profile of investors.]
Reply
(07-06-2021, 10:42 PM)Curiousparty Wrote: good Smile 

There is a low chance that Boustead will go bankrupt too. Any valuation would thus be quite meaningless...haha...

There is also a chance (albeit very low) that some banks may lose their coveted banking license from MAS right?

Didn't realize I had to spell out the obvious, but here goes.

The chance of a good bank losing its licence is similar to other good banks, so comparing valuation ratios make some sense as this risk is factored in all of their prices.

If by tech stocks you mean FAANMG or other similar software-based businesses relying on the Internet for low-to-zero marginal costs and low-to-zero distribution costs, then they are not a good comparable for Boustead's Geospatial segment given they own their technology and Boustead doesn't. Workday is obviously not a good comparable for TietoEvry or Alight.
Reply
I signed up for its AGM but forgotten about it.

Anybody has any insights on why Wong Yu Loon has a rather poor vote for him to be re-elected? Is he not as capable? I thought he is the one gonna take over Mr Wong FF.

Ordinary Resolution 4: Re-election of Mr Wong Yu Loon as a director of the Company
For: 76.63%, Against: 23.37
Reply
Rainbow 
boustead@119
mgt ppt at 2021 eAGM
https://links.sgx.com/FileOpen/Boustead%...eID=676287

[Image: uc?id=1dfIkQu36GGe3TqXK7voBeWkHvB1AdK3m]

Stay home and stay safe, everyone.
Heart
Reply


Forum Jump:


Users browsing this thread: 4 Guest(s)