I've been re-looking at a few companies recently, mostly those with a good economic moat and I'll try to list them here as I go along but for now:
SMRT
Goodpack
I've mentioned SMRT before in my previous posts but back then their share price was hovering around 1.9-2. Prices have dipped since then, and they're now around the range of 1.6-1.7. With the Circle Line due to start (in phases) from next year onwards, SMRT looks set to win more riderships. Apart from the Circle Line, they're also improving retail space at their train stations to generate more revenue. A side note though, the NEL is not owned by SMRT but by SBS Transit which is 75% owned by ComfortDelgro. Really worth taking a closer look and you might want to consider taking them up should their share price appeal to you.
Goodpack, may be relatively unfamiliar to many of you but they hold a patent to a new way of transporting goods (mainly rubber and synthetic rubber). More information on their product and business model can be found on their site (You won't be wasting your time). I strongly believe that the newly initiated FTA with China will prove to be very helpful in their venture (for bigger market share) in the Chinese market. Their financial statements are hard to find but I've been in contact with their IR dept and they will be sending me the statements shortly.
Two companies with very good economic moats, worth taking a closer look at their financials and future prospects.
Friday, October 24, 2008
Saturday, September 27, 2008
Freightlinks 1Q09 Results
It has been a while since I updated, mainly busy with personal commitments. Freightlinks released their first quarter results for WY2009 and I will talk more about it below.
I have yet to invest in Freightlinks. With all the happenings in the financial world I have spent time trying to comprehend what the news really mean and to gain a better understand of the whole system.
Coming to Freightlinks, since I wasn’t able to find a quarterly results for their last quarter (they summed it all up in a yearly one), I took their yearly results and divided them by 4 to get an estimation of their last quarter’s results from year.
Revenue for their 1Q09 was at $37,760,000 compared to the average of $34,857,000 in WY08. This equals to a gain of 8.32% in revenue. Net profit for 1Q09 is at $2,533,000 compared to average of $4,374,500 in WY08 which will work out to a drop in Net profit margin of 12.6% to 6.7%. While operating cost increased by 4.7%, it is an indication that their growth in revenue is not matching up to the increases in operating cost and also perhaps a sign that the effects of an economic trade slowdown is starting to show decreases in their freight forwarding income. It is necessary to keep track of their revenue in the result releases.
Freightlinks has a decrease in their cash and cash equivalent from $43,266,000 to $33,872,000 mainly to finance their acquisition of Citic Logistics which will provide them with a stake into the China Market. Secured liabilities have also increased from $92.5mil to almost a $100mil now, with $60mil payable in one year or less. Looking long term, their non-current debt to equity ratio is at 3.5 or about 28.6% which is leaning more to the positive side.
Also, maybe a piece of good news to investors, CEO Mr Eric Khua recently doubled his stake in Freightlinks from 0.12375 % To 0.23911 %.
Summary
EPS for this quarter is at 0.12 cents, P/E at 5.7. NAV is at 6.15cents calculated based on 2,103,287,102 shares. However with the exercising of their warrants in march next year, supposedly all warrants get exercised, the total number of shares will rise to 2,870,354,676 and taking into consideration their assets stays around the same figure, NAV will drop to 4.50cents. I am positive on Freightlink’s establishment in the local and overseas market and with this in mind, I will look to buy in at around 3.5/4cents which is a 20% discount to current market value of 5cents and about 10% discount to NAV to give myself a margin of safety.
I have yet to invest in Freightlinks. With all the happenings in the financial world I have spent time trying to comprehend what the news really mean and to gain a better understand of the whole system.
Coming to Freightlinks, since I wasn’t able to find a quarterly results for their last quarter (they summed it all up in a yearly one), I took their yearly results and divided them by 4 to get an estimation of their last quarter’s results from year.
Revenue for their 1Q09 was at $37,760,000 compared to the average of $34,857,000 in WY08. This equals to a gain of 8.32% in revenue. Net profit for 1Q09 is at $2,533,000 compared to average of $4,374,500 in WY08 which will work out to a drop in Net profit margin of 12.6% to 6.7%. While operating cost increased by 4.7%, it is an indication that their growth in revenue is not matching up to the increases in operating cost and also perhaps a sign that the effects of an economic trade slowdown is starting to show decreases in their freight forwarding income. It is necessary to keep track of their revenue in the result releases.
Freightlinks has a decrease in their cash and cash equivalent from $43,266,000 to $33,872,000 mainly to finance their acquisition of Citic Logistics which will provide them with a stake into the China Market. Secured liabilities have also increased from $92.5mil to almost a $100mil now, with $60mil payable in one year or less. Looking long term, their non-current debt to equity ratio is at 3.5 or about 28.6% which is leaning more to the positive side.
Also, maybe a piece of good news to investors, CEO Mr Eric Khua recently doubled his stake in Freightlinks from 0.12375 % To 0.23911 %.
Summary
EPS for this quarter is at 0.12 cents, P/E at 5.7. NAV is at 6.15cents calculated based on 2,103,287,102 shares. However with the exercising of their warrants in march next year, supposedly all warrants get exercised, the total number of shares will rise to 2,870,354,676 and taking into consideration their assets stays around the same figure, NAV will drop to 4.50cents. I am positive on Freightlink’s establishment in the local and overseas market and with this in mind, I will look to buy in at around 3.5/4cents which is a 20% discount to current market value of 5cents and about 10% discount to NAV to give myself a margin of safety.
Saturday, August 30, 2008
Wednesday, August 27, 2008
Freightlinks
Freightlinks is a 3PL logistics company dealing mainly in freight-forwarding. Basically a third-party logistics (3PL) provider is a firm that provides outsourced logistics services to companies for part, or sometimes all of their supply chain management function.
As such, it is important for a 3PL firm to establish a good international network as well as have forwarding agents at countries of growing economies (i.e. China/India) and they have just that.
Looking at their financial report for FY2008, their net profit has increased almost 40% from S$12.5 million to S$17.5 million. Giving rise to a net profit margin increase of about 2.6% from 2007 – 2008. Increase in net profit margin is important as it shows how efficient the group is. EPS for FY2008 is at 0.88 cents.
The group has about S$43 million in cash which is a moderately humble amount. However, their total of financial liabilities of secured bank borrowings adds up to a total of almost S$92.5 million with S$58 million due payable in the current year. Their borrowings have mostly been used to finance their acquisitions and constructions of warehouses justified in their increase in assets and property over the years.
With secured liabilities at S$92.5 million, their net debt to equity ratio stands at 0.67 showing that it is not necessarily a very strong balance sheet.
However the outlook for them looks positive. Completion of their warehouses earlier last month will help to bring in more revenue. They are also well invested in fast growing markets like China where demand for logistics services will grow rapidly as well as in the Chemical logistics sector to cope with Jurong Island’s increasing need for dangerous goods warehouses. Their warehousing space enjoy about 90% occupancy and will soon increase to 1.5 million sq ft. Most of their assets have not been revalued after being written down years ago so we are technically looking at a virtual goldmine. Also, their net asset value (NAV) increased by 1.04 cents to 6.02 cents in FY2008 which is just over its current trading price of 6.00 cents. With such an attractive NAV coupled with a PE ratio of 7.4 and a cash dividend of 0.25 cents a share, I believe we have a winner here.
Conclusion
Freightlinks to me is well poised to enjoy a logistics boom in countries where it is well invested in such as China. Also with the YOG 2010 being held locally, I believe it will be beneficial to our local logistics community.
However, with current economic sentiments so discouraging, it is up to individual’s risk appetite and time horizon to decide if they want to invest in Freightlinks.
For me, their outlook is bright and I will be paying close attention to their debt and profit margin in the next financial report. But for now, their NAV of 6.02 cents, Undervalued warehousing space, low P/E ratio plus an attractive dividend is too good to pass, will invest when the next paycheck comes in!
As such, it is important for a 3PL firm to establish a good international network as well as have forwarding agents at countries of growing economies (i.e. China/India) and they have just that.
Looking at their financial report for FY2008, their net profit has increased almost 40% from S$12.5 million to S$17.5 million. Giving rise to a net profit margin increase of about 2.6% from 2007 – 2008. Increase in net profit margin is important as it shows how efficient the group is. EPS for FY2008 is at 0.88 cents.
The group has about S$43 million in cash which is a moderately humble amount. However, their total of financial liabilities of secured bank borrowings adds up to a total of almost S$92.5 million with S$58 million due payable in the current year. Their borrowings have mostly been used to finance their acquisitions and constructions of warehouses justified in their increase in assets and property over the years.
With secured liabilities at S$92.5 million, their net debt to equity ratio stands at 0.67 showing that it is not necessarily a very strong balance sheet.
However the outlook for them looks positive. Completion of their warehouses earlier last month will help to bring in more revenue. They are also well invested in fast growing markets like China where demand for logistics services will grow rapidly as well as in the Chemical logistics sector to cope with Jurong Island’s increasing need for dangerous goods warehouses. Their warehousing space enjoy about 90% occupancy and will soon increase to 1.5 million sq ft. Most of their assets have not been revalued after being written down years ago so we are technically looking at a virtual goldmine. Also, their net asset value (NAV) increased by 1.04 cents to 6.02 cents in FY2008 which is just over its current trading price of 6.00 cents. With such an attractive NAV coupled with a PE ratio of 7.4 and a cash dividend of 0.25 cents a share, I believe we have a winner here.
Conclusion
Freightlinks to me is well poised to enjoy a logistics boom in countries where it is well invested in such as China. Also with the YOG 2010 being held locally, I believe it will be beneficial to our local logistics community.
However, with current economic sentiments so discouraging, it is up to individual’s risk appetite and time horizon to decide if they want to invest in Freightlinks.
For me, their outlook is bright and I will be paying close attention to their debt and profit margin in the next financial report. But for now, their NAV of 6.02 cents, Undervalued warehousing space, low P/E ratio plus an attractive dividend is too good to pass, will invest when the next paycheck comes in!
Sunday, August 24, 2008
Freightlinks
I've been paying attention to the logistics sector and recently got interested in this counter. Although it may be a penny stock, their financials look very appealing. I always feel that logistics is a very under-rated job so I may be bias.
Will be posting a more detailed insight into this counter and its peers on the market.
Will be posting a more detailed insight into this counter and its peers on the market.
Saturday, August 16, 2008
MRT rides surge to a high
link here,
MRT rides surge to a high
Monthly total hits 44m in a sign that drivers are leaving cars at home
By Yeo Ghim Lay
FFORTS to get drivers to ditch their cars for public transport appear to be working.
Commuters took 3.6 million more train trips on SMRT trains last month, pushing the month's total number to a record 44.9 million.
The previous high was logged in May, with 41.9 million trips.
SMRT put the increase in ridership down to the Government's push for a greater use of public transport in order to keep traffic gridlock at bay.
The public transport operator, in comparing ridership on trains between June and July, noted that July had one day more and more weekdays as well; it was also when most people returned to work after their June vacations.
The surge in ridership on the East-West and North-South lines coincided with a jump in the cost of driving.
July was when five new Electronic Road Pricing (ERP) gantries went up in the city, charging up to $2 to pass under them from 6pm to 8pm on weekdays; two of the five sited along the Singapore River also began collecting road tolls on Saturdays between 12.30pm and 8pm.
Driving through existing Central Business District gantries also became more expensive from July 7.
ERP charges were not the only thing hitting motorists in their pockets: Petrol prices too, played a part in pushing some to take the train.
Dental surgeon Michael Lim, 45, for example, who frequently goes to town in the evenings from his Bedok clinic, no longer drives to Raffles Place or Orchard to keep his appointments.
Four times a week since late June, he has been leaving his car at the Raffles City Shopping Centre and taking a train to his destination.
He said: 'It doesn't make sense to drive there anymore. I'd have to pay for ERP everywhere, and looking for a parking lot in Orchard takes time too.'
Parking at the Raffles City carpark on weekday evenings costs him a flat $2.50.
'Besides, all the walking up and down escalators at the MRT stations is good exercise for me,' he quipped.
Another driver who is driving less now is Ms Foo Jye Huah, 33. She started taking the North-East line to her workplace near Clarke Quay from her Farrer Park home this month.
Said the manager: 'The train may be packed during peak hours, but it is bearable because my ride takes only 10 minutes.'
Previously, she found herself paying $3 to pass under two gantries to get to work. Her train ride now costs only 81 cents each way. She reckons she has saved over $100 in ERP and carpark charges and petrol in just two weeks.
With more people getting on the trains, SMRT will from Monday begin handing out breakfast discount flyers to the early birds who exit selected downtown MRT stations between 7am and 7.30am.
This is an attempt to encourage people to make their trips earlier, before the trains become really crowded during the morning peak hour. They carry up to 800 commuters each between 7am and 7.30am in the city, and pack in 1,400 from 7.30am to 9.30am.
The nine stations where breakfast discount flyers will be distributed are Orchard, Somerset, Dhoby Ghaut, City Hall, Raffles Place, Lavender, Bugis, Tanjong Pagar and Outram Park.
With these flyers, commuters can buy beverages and breakfast foods more cheaply at participating merchants like Spinelli's and Toast Box between 7am and 8.30am on weekdays.
The discounts are on top of the current 10-cent savings commuters get for boarding trains outside the city and alighting in the city before 7.30am.
SMRT's director of transport planning Chew Hooi Lian said: 'We want to raise awareness of this current scheme and reward commuters with delicious breakfast offers when they choose to travel earlier before the peak hour kicks in.'
The breakfast discounts will end on Oct 31, but the 10 cents off the fare will continue for early-bird commuters.
MRT rides surge to a high
Monthly total hits 44m in a sign that drivers are leaving cars at home
By Yeo Ghim Lay
FFORTS to get drivers to ditch their cars for public transport appear to be working.
Commuters took 3.6 million more train trips on SMRT trains last month, pushing the month's total number to a record 44.9 million.
The previous high was logged in May, with 41.9 million trips.
SMRT put the increase in ridership down to the Government's push for a greater use of public transport in order to keep traffic gridlock at bay.
The public transport operator, in comparing ridership on trains between June and July, noted that July had one day more and more weekdays as well; it was also when most people returned to work after their June vacations.
The surge in ridership on the East-West and North-South lines coincided with a jump in the cost of driving.
July was when five new Electronic Road Pricing (ERP) gantries went up in the city, charging up to $2 to pass under them from 6pm to 8pm on weekdays; two of the five sited along the Singapore River also began collecting road tolls on Saturdays between 12.30pm and 8pm.
Driving through existing Central Business District gantries also became more expensive from July 7.
ERP charges were not the only thing hitting motorists in their pockets: Petrol prices too, played a part in pushing some to take the train.
Dental surgeon Michael Lim, 45, for example, who frequently goes to town in the evenings from his Bedok clinic, no longer drives to Raffles Place or Orchard to keep his appointments.
Four times a week since late June, he has been leaving his car at the Raffles City Shopping Centre and taking a train to his destination.
He said: 'It doesn't make sense to drive there anymore. I'd have to pay for ERP everywhere, and looking for a parking lot in Orchard takes time too.'
Parking at the Raffles City carpark on weekday evenings costs him a flat $2.50.
'Besides, all the walking up and down escalators at the MRT stations is good exercise for me,' he quipped.
Another driver who is driving less now is Ms Foo Jye Huah, 33. She started taking the North-East line to her workplace near Clarke Quay from her Farrer Park home this month.
Said the manager: 'The train may be packed during peak hours, but it is bearable because my ride takes only 10 minutes.'
Previously, she found herself paying $3 to pass under two gantries to get to work. Her train ride now costs only 81 cents each way. She reckons she has saved over $100 in ERP and carpark charges and petrol in just two weeks.
With more people getting on the trains, SMRT will from Monday begin handing out breakfast discount flyers to the early birds who exit selected downtown MRT stations between 7am and 7.30am.
This is an attempt to encourage people to make their trips earlier, before the trains become really crowded during the morning peak hour. They carry up to 800 commuters each between 7am and 7.30am in the city, and pack in 1,400 from 7.30am to 9.30am.
The nine stations where breakfast discount flyers will be distributed are Orchard, Somerset, Dhoby Ghaut, City Hall, Raffles Place, Lavender, Bugis, Tanjong Pagar and Outram Park.
With these flyers, commuters can buy beverages and breakfast foods more cheaply at participating merchants like Spinelli's and Toast Box between 7am and 8.30am on weekdays.
The discounts are on top of the current 10-cent savings commuters get for boarding trains outside the city and alighting in the city before 7.30am.
SMRT's director of transport planning Chew Hooi Lian said: 'We want to raise awareness of this current scheme and reward commuters with delicious breakfast offers when they choose to travel earlier before the peak hour kicks in.'
The breakfast discounts will end on Oct 31, but the 10 cents off the fare will continue for early-bird commuters.
Thursday, August 14, 2008
Swiber - 2Q08 Results
Review on 2Q08
Swiber has produce an impressive 2Q08 gain in revenue and profit yoy at 398.1% and 251.1% respectively. To be honest I was expecting profit to be around the 200-215% and I’m pleasantly surprised with this quarter’s result. Growth in Revenue is a result of their increasing fleet number leading to completion of more operations/contracts. In line with their expansion, both Administrative expense and Finance cost have both gone up. This can be attributed to their increasing staff and admin cost.
Looking at their Balance Sheet, it seems like they have used up most of their funds from their bond issue, leading to a drop in Cash and bank balances. Receivables have increased by about 45% from the previous quarter showing that their on-going operations will continue to rake in revenue. With a new bank borrowing of 56 mil, their current debt to equity ratio is almost at 50-50 (I only look at their long term debt, mainly bonds + bank loans). These are perhaps the numbers that make me feel uneasy. I’m fine with unsecured debt (bonds) as they have no collateral attached to them. Bank borrowings however are secured debt with collaterals attached to them and in this case, their vessels and assets. Amount of secured debt payable within and after this year is totaled at 86,404 mil. While I am confident they will be able to meet the deadlines for the repayment, we would have to take a closer look at their ability to repay loans should they incur more debt.
Their cash flow statement shows an 18 mil increase in cash generated from operating activities. This is good news as compared to last quarter, when they were nursing a negative cash flow from operating activities. Although this shows improvement in their capability to maintain a positive cashflow, I will wait for consistent improvements in their 3Q results before making any judgments.
Summary
Swiber is in a midst of rapid growth and therefore require taking up debt for financing, however this debt must be closely watched. I will be looking forward to seeing Swiber garner bigger and juicier contracts to add on to their order book of US$664 mil. With earnings for 2Q08 at US$124.526 mil, EPS is at US$0.293 = SGD$0.411. Taking today’s market price into consideration, P/E is at 4.38. Looks pretty good to me for a rapidly growing company.
Swiber has produce an impressive 2Q08 gain in revenue and profit yoy at 398.1% and 251.1% respectively. To be honest I was expecting profit to be around the 200-215% and I’m pleasantly surprised with this quarter’s result. Growth in Revenue is a result of their increasing fleet number leading to completion of more operations/contracts. In line with their expansion, both Administrative expense and Finance cost have both gone up. This can be attributed to their increasing staff and admin cost.
Looking at their Balance Sheet, it seems like they have used up most of their funds from their bond issue, leading to a drop in Cash and bank balances. Receivables have increased by about 45% from the previous quarter showing that their on-going operations will continue to rake in revenue. With a new bank borrowing of 56 mil, their current debt to equity ratio is almost at 50-50 (I only look at their long term debt, mainly bonds + bank loans). These are perhaps the numbers that make me feel uneasy. I’m fine with unsecured debt (bonds) as they have no collateral attached to them. Bank borrowings however are secured debt with collaterals attached to them and in this case, their vessels and assets. Amount of secured debt payable within and after this year is totaled at 86,404 mil. While I am confident they will be able to meet the deadlines for the repayment, we would have to take a closer look at their ability to repay loans should they incur more debt.
Their cash flow statement shows an 18 mil increase in cash generated from operating activities. This is good news as compared to last quarter, when they were nursing a negative cash flow from operating activities. Although this shows improvement in their capability to maintain a positive cashflow, I will wait for consistent improvements in their 3Q results before making any judgments.
Summary
Swiber is in a midst of rapid growth and therefore require taking up debt for financing, however this debt must be closely watched. I will be looking forward to seeing Swiber garner bigger and juicier contracts to add on to their order book of US$664 mil. With earnings for 2Q08 at US$124.526 mil, EPS is at US$0.293 = SGD$0.411. Taking today’s market price into consideration, P/E is at 4.38. Looks pretty good to me for a rapidly growing company.
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