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17-07-2014, 06:15 AM
A closer look into the 1H (ended 31Dec13) result and numbers should give an idea to what extent Spindex at the last done share price of $0.54 remains under-priced by Mr Market…..
http://infopub.sgx.com/FileOpen/SpindexI...ileID=4694
From the earnings angle, a simple extrapolation of 1H's EPS at $0.043 would give a projected FY14 (ended 30Jun14) full-year EPS of $0.086. As Spindex is a well-established business, a very conservative PER of 8x would give a simple valuation of $0.688/share.
From a balance-sheet and asset coverage angle, using the latest 30Dec13 NAV/share at $0.6155 and adding to it a projected 2H's EPS of $0.043, would give a projected 30Jun14 NAV/share of $0.6585. Bearing in mind that Spindex's manufacturing assets (including quite a few self-owned factories in the region) are of good quality and well-maintained, and that Spindex has a good customer base comprising mostly leading MNCs, a simple 20% premium to account for hidden value in industrial properties and business goodwill, would give a simple valuation of $0.7902.
For simplicity, I suppose we can take a simple average of the 2 valuation numbers above, and that would give a blended simple valuation of $0.7391/share. Of course, we should also ask ourselves if someone were to make an offer at $0.7391/share to the controlling shareholders Tan Family, would the Tans bite? Well, I suspect that very likely the Tans - who should know what is the fair value for the entire business and for their controlling shareholding block - would not.
http://infopub.sgx.com/FileOpen/SpindexI...ileID=4694
From the earnings angle, a simple extrapolation of 1H's EPS at $0.043 would give a projected FY14 (ended 30Jun14) full-year EPS of $0.086. As Spindex is a well-established business, a very conservative PER of 8x would give a simple valuation of $0.688/share.
From a balance-sheet and asset coverage angle, using the latest 30Dec13 NAV/share at $0.6155 and adding to it a projected 2H's EPS of $0.043, would give a projected 30Jun14 NAV/share of $0.6585. Bearing in mind that Spindex's manufacturing assets (including quite a few self-owned factories in the region) are of good quality and well-maintained, and that Spindex has a good customer base comprising mostly leading MNCs, a simple 20% premium to account for hidden value in industrial properties and business goodwill, would give a simple valuation of $0.7902.
For simplicity, I suppose we can take a simple average of the 2 valuation numbers above, and that would give a blended simple valuation of $0.7391/share. Of course, we should also ask ourselves if someone were to make an offer at $0.7391/share to the controlling shareholders Tan Family, would the Tans bite? Well, I suspect that very likely the Tans - who should know what is the fair value for the entire business and for their controlling shareholding block - would not.
