Boustead Singapore

[jaco]

Michael Fritznell wrote a deep-dive of Boustead Singapore on his substack Asian Century Stocks: https://www.asiancenturystocks.com/p/dee...-singapore

This is a paid substack, but it looks like he opened this presentation to the general public. Most value is in the Powerpoint PDF at the end.

[weijian]

New contracts seem to have jumped together for both energy engineering and real estate. It is ~1.5-2x of the running last 2 years average. The economy seems to be improving and getting more optimistic it seems.

CONDENSED INTERIM FINANCIAL STATEMENTS For the six months and full year ended 31 March 2023

In FY2023, the Group was awarded approximately $565 million in new contracts including a record contract secured by the Real Estate Division valued at approximately $300 million. This is almost three times the amount of new contracts secured in FY2022. In particular, the Energy Engineering Division was awarded new contracts in FY2023 totalling more than FY2021 and FY2022 combined, benefitting from the post-pandemic reopening of borders and economies and global demand for greater energy security.

The pipeline of new contracts secured in FY2023 has boosted the Group’s engineering project order backlog to $556 million (unrecognised project revenue remaining at the end of FY2023 plus the total value of new orders secured since then), of which $154 million is under the Energy Engineering Division and $402 million is under the Real Estate Division, significantly higher than the $274 million disclosed in the FY2022 financial results announcement. The Geospatial Division also had $92 million in deferred services backlog (not included in the Group’s engineering project order backlog) at the end of FY2023.

FY23 results: https://links.sgx.com/FileOpen/Boustead%...eID=760744

[ksir]

Another low ball? So no need to share with "annoying" minority shareholders? Haha

[weijian]

Another low ball? So no need to share with "annoying" minority shareholders? Haha

Well, one already knows the drill - you can't expect to buy at 80% of FV and hope the Boss buys out at FV. It does happen (eg. GK Goh) but more exception than the norm. Maybe Goh Senior treasures his seat on the Temasek Foundation? haha...Or looking from another angle, is there hidden value in excess of the accounting book value for GK Goh's case?

The OPMI will be lucky if one gets in at 60% FV and gets bought out at 80% FV.

Not insinuating that it could happen but let's hypothesize briefly how a potential offer may look like roughly:

- Assume offer is 20% above last traded price ~ 450mil market cap

- Boss owns ~43% of the company. So he needs to folk out 0.57*450 = 250mil cash

- There is 326mil cash on the balance sheet as end FY23. Since Boss + parent company already owns >90%, we just consolidate them for simplicity sake. Boss has always said that they need 100mil cash to guarantee their financial viability to potential customers when bidding for contracts, so "effective" cash is more like 226mil.

- It seems Boss doesn't really need big resources to give an offer described above. If does happen, we can assume that "trapped BP shareholders" will definitely benefit as Boss will probably declare a big dividend from BP to pay for it.

[ksir]

Another low ball? So no need to share with "annoying" minority shareholders? Haha

Well, one already knows the drill - you can't expect to buy at 80% of FV and hope the Boss buys out at FV. It does happen (eg. GK Goh) but more exception than the norm. Maybe Goh Senior treasures his seat on the Temasek Foundation? haha...Or looking from another angle, is there hidden value in excess of the accounting book value for GK Goh's case?

The OPMI will be lucky if one gets in at 60% FV and gets bought out at 80% FV.

Not insinuating that it could happen but let's hypothesize briefly how a potential offer may look like roughly:

- Assume offer is 20% above last traded price ~ 450mil market cap

- Boss owns ~43% of the company. So he needs to folk out 0.57*450 = 250mil cash

- There is 326mil cash on the balance sheet as end FY23. Since Boss + parent company already owns >90%, we just consolidate them for simplicity sake. Boss has always said that they need 100mil cash to guarantee their financial viability to potential customers when bidding for contracts, so "effective" cash is more like 226mil.

- It seems Boss doesn't really need big resources to give an offer described above. If does happen, we can assume that "trapped BP shareholders" will definitely benefit as Boss will probably declare a big dividend from BP to pay for it.

All these low balls are only possible with a very crazy unloved Market. 
There are tons of undervalued companies in Sg Market, Graham type of Investment method should do pretty well in SG. 
Thus far (over 10 years), in percentage, my investment in SG has the best return, compared to my global investment (HK/China/US/Canada etc). 
Maybe it's home ground advantage, but it's also the most boring and less challenges. haha. Low effort, high return.

[Curiousparty]

In the bustling world of investments, where every move counts and every opportunity is scrutinized, one company stands out as a beacon of consistency and value: Boustead. While many may overlook it, those who delve deeper unearth a hidden gem, a stock counter that has been quietly delivering impressive returns and demonstrating resilience through market fluctuations. Boustead isn't just another stock; it's the real dividend king.


With a remarkable track record of paying dividends for seventeen consecutive years, Boustead's commitment to rewarding its investors is unparalleled. But it's not just about the numbers. It's about the strategic moves and unwavering dedication that have solidified Boustead's position as a reliable investment choice.


"..............Paying a total of 80.9 cents in dividends over seventeen consecutive years, when factoring in the dividends in specie of Boustead Projects’ and EasyCall’s shares................"

https://boustead.sg/dividends...

The recent developments within Boustead further highlight its potential. The consistent buying by the CEO speaks volumes about confidence in the company's trajectory. Moreover, the delisting of the Boustead Projects segment and the subsequent increase in ownership to nearly 100% by Boustead's parent company signal a shift towards consolidation and focused growth strategies.


Analyzing the numbers unveils an intriguing story. With a net asset value (NAV) and earnings per share (EPS) set to strengthen substantially, Boustead's intrinsic value is on the rise. Even considering the delisted price of Boustead Projects at $1.18, the adjusted value per share stands at an impressive $0.77. ($1.18 x 313 mil / 477 mil). But that's just the tip of the iceberg.


When we factor in Boustead's own cash holdings, along with its robust Geo-spatial and Engineering segments, the picture becomes even clearer. The combined value far surpasses the current market price. However, a closer look suggests that the RNAV could soar well beyond $2.0, presenting a significant upside potential for investors.

Yet, despite these promising indicators, Boustead's current share price languishes at just $0.90, representing a serious undervaluation in the market. This glaring discrepancy between intrinsic worth and market perception presents a unique opportunity for savvy investors to capitalize on Boustead's undervalued status.

‌In a world where volatility reigns supreme and uncertainty lurks around every corner, finding stability and reliability in investment choices is paramount. Boustead offers precisely that—a steady stream of dividends coupled with untapped potential waiting to be unlocked. As the real dividend king, Boustead invites investors to join its journey towards sustained growth and prosperity.

[Mushy]

Since Mr Wong is currently buying shares in the open and such actions seem to be driving up the share price, can I say it is unlikely he/his family is planing to take major corporate action soon?
During the AGM and EGM last year, the board repeatedly explained that the Boustead project acquisition had to be done with surprise element so as to get a good price for Boustead shareholder. That advice should be relevant if Mr Wong has intention to privatise Boustead?

[donmihaihai]

A nice piece of PR.

Doesn't look strange when WFF use a few hundred thousand dollars of his 70M proceeds to buy Boustead Singapore shares. If the younger Wongs, captains of the ship for many years to come are spending these money buying, then it is a different story.

[ksir]

A nice piece of PR.

Doesn't look strange when WFF use a few hundred thousand dollars of his 70M proceeds to buy Boustead Singapore shares.  If the younger Wongs, captains of the ship for many years to come are spending these money buying, then it is a different story.

Yup compared to the proceeds, it's quite "tiny", but perhaps 1) hard to buy big amount of shares in open market, Boustead volume is not high 2) might hit certain % which will incur another mandatory private offer (from FF part), can't remember the threshold and not really care about it as well.

Imo, if they ever wanted to jack up the price, it's not difficult also, I could think of 
1) Pay out the "extra" cash, idling for very very long (15+ years is too long even for me, if they were unlisted biz, I'd make noise also), although it's now delivering more yield and hence even more unlikely to pay out?
2) Or use that idle cash to buyback substantially (they done that previously but in SG market, don't think ppl see the return in that manner, although I preferred they buyback below PB).

[donmihaihai]

A nice piece of PR.

Doesn't look strange when WFF use a few hundred thousand dollars of his 70M proceeds to buy Boustead Singapore shares.  If the younger Wongs, captains of the ship for many years to come are spending these money buying, then it is a different story.

Yup compared to the proceeds, it's quite "tiny", but perhaps 1) hard to buy big amount of shares in open market, Boustead volume is not high 2) might hit certain % which will incur another mandatory private offer (from FF part), can't remember the threshold and not really care about it as well.

Yup on 1). 

for 2) WFF should be restricted to purchase of 1% within a 6 month period as his interest is between 30% to 50%. 1% is like SGD4 to 5M. He will get there easily based on the current rate of purchase.