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Stillicon, I am not to familiar with the instrument of perpetual securities, but since it is defined as asset, under a textbook definition, it would make sense to include as net asset value.
I agree with you that realistic nav is a better judgment. In some of the foreign stock exchange companies I read up on, the companies are upfront to use more usable criteria to set their own benchmarks.. Eg a bank using return on tangible equity (RoTE) rather than ROE. As such, I am becoming more keen on the integrity of management (are they doing doublespeak, or not preaching what they say) as a criteria for stock selection.
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04-08-2015, 11:22 PM
(This post was last modified: 04-08-2015, 11:37 PM by corydorus.)
Looking from returns perspective, funds raised from Perpetual it is an asset that can generate returns. The power of it which is it cannot depreciated like a physical asset. Neither it can be recalled by Banks which put it as a much "safer loan". However there is cost component which is deducted from profits to pay the interests. For a large stable corporation, it will be a much cheaper source / risk of funding for working capital use.
Overall the result looks quite respectable despite facing headwinds in marine and oils in addition to the competitive market in SG. One thing i do like is the cost structure has been right-sized lower than the rev reduction resulting surprise higher profits. Expanding to oversea market seems like an excellent strategic moves. On hindsight 8/3 is nice entry point for a small stake.
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Some announcements made by the company.
Sembcorp's first coal-fired power plant in India commences operation.
http://infopub.sgx.com/FileOpen/Sembcorp%20TPCIL%20Commences%20Full%20Commercial%20Operation-Final.ashx?App=Announcement&FileID=369416
Sembsita pacific divested at s$350 million. This will par down their debt..
http://infopub.sgx.com/FileOpen/Sembcorp...eID=370194
Winston Churchill:-
“The inherent vice of capitalism is the unequal sharing of blessings; the inherent virtue of socialism is the equal sharing of miseries.”
"The farther backward you can look, the farther forward you are likely to see."
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Sembcorp to build S$557m power plant in Bangladesh
Sembcorp will own a 71 per cent stake in the project while a subsidiary of the Bangladesh Power Development Board will hold the remaining 29 per cent.
http://www.channelnewsasia.com/news/busi...56304.html
Winston Churchill:-
“The inherent vice of capitalism is the unequal sharing of blessings; the inherent virtue of socialism is the equal sharing of miseries.”
"The farther backward you can look, the farther forward you are likely to see."
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Yeah, thats their biz model, selling water or energy plants/operations at a profit before going on to win other contracts. SCI is progressively diversifying their utilities business overseas, mainly i guess due to local competition (e.g. lower average spark rate) with more companies joining the fray..
My worry is their marine business, with brazil operations fraught with uncertainties (e.g. bribery and ongoing problems at Petrobas and brazil economy), and having spent billions building a new yard there. Oil prices are also down at the moment though its a matter of time before it goes back up, i think.
Vested little lah. - in fact its my very first stock purchase lah..
Winston Churchill:-
“The inherent vice of capitalism is the unequal sharing of blessings; the inherent virtue of socialism is the equal sharing of miseries.”
"The farther backward you can look, the farther forward you are likely to see."
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