Investment Idea #12

Back to discussing Singapore listed company

This third Singapore name has been a strong compounder since its IPO c.17 years ago, almost quadrupling its share price back then. With STI barely up over the same time period, this is an idea that has worked out and I think the share price is not expensive today. As usual, the simple financial numbers below:

Simple financials (Sep 2024 estimate, SGD)

• Sales: 11.7bn

• EBITDA: 1.9bn

• Net income: 1.2bn

• FCF: 1.5bn

• Debt: 4.7bn, Mkt Cap 25.1bn

Financial Ratios

• ROIC: 10% and ROE: 16%

• EV/EBITDA 11.4x (Sep 24)

• PER 11.5x (Sep 24)

• Past margins: OPM 12-14%

• FCF yield: high single digit for last few years

Interestingly, share price has stagnated since 2020 and we are not far from the Mar 2020 low today. Recall that this was at the height of COVID-19 when the markets capitulated. Compare now to 2020, things has improved so much, yet the stock is trading as if we are still in the worrisome heydays of the pandemic. This warrants a closer look!

Share price is two cents away from Mar 2020’s low of 54 cents