Thursday, December 08, 2016

Captii: Value Investing ?

Captii's financial

Indicator FY 2011 FY 2012 FY 2013 FY 2014 FY 2015
Revenue ( in S$ million )  13.94716.61117.57621.57919.3
Net Profit ( in S$ million )2.1756.2121.12.2553.002
 Dividend in Cents  11.5222.5
 Pay out Ratio 14.6%7.7%58%28.3%26.6%
 EPS ( in cents ) 6.0018.633.196.768.05
Net Profit Margin 15.6% 37.4%6.3%10.4%15.6%
 Cash ( in S$ million ) 15.087.7611.2511.8813.45
 Cash per share $0.47$0.243$0.352$0.372$0.42
 Share price  $0.40 ( 28th Jan 2011 )$0.30 (6th Jan 2012)$0.37 (17th Jan 2013)$0.43(24th Jan 2014)$0.42(2nd Jan 2015 )

Investment Merit:
1) Huge cash of 42cts vs a share price of 49cts ( 10th Dec 2016 )
2) Dividend of approx 5% based on share price of 49cts

Sunday, October 23, 2016

Envictus International

Taken from 2nd Quarter FY2016 report on SGX.

Listed on SGX Catalist in 2004, and upgraded to the Mainboard in 2009, Envictus International Holdings Limited, is an established Food & Beverage (“F&B”) Group. The Group has an established portfolio of businesses and brands operating under its four business divisions – Trading and Frozen Food, Food Services, Nutrition and Food Processing. 
For the Trading and Frozen Food Division, the Group’s wholly-owned subsidiary, Pok Brothers Sdn Bhd, is one of Malaysia’s leading frozen food and premium food wholesaler and is a supplier to several major American restaurant chains in Malaysia. In addition, the division also distributes the Gourmessa quality cold cuts across supermarkets and hypermart chains in Malaysia.

Under the Group’s Food Services Division, Envictus holds exclusive rights for a 10- year period since July 2012 to develop and operate the fast growing American-styled Texas Chicken fast food restaurant chains in Malaysia and Brunei. Since its first flagship outlet opened in January 2013 at Aeon Bukit Tinggi Shopping Centre, Klang, Malaysia, the robust demand for the Texas Chicken restaurant concept has driven the Group to expand its store footprint at a healthy pace. Since March 28, 2016, Envictus also has a strategic investment in the specialty coffee chain business – San Francisco Coffee – which serves house roasted coffee in Malaysia.  

Image result for envictus international food processingImage result for envictus international food processing
For Nutrition, under Naturalac Nutrition Limited (“NNL”), the Group markets its range of branded sports nutrition and weight management food products for mass consumer markets. This includes the Horleys™ brand name and other proprietary brands such as Sculpt™ (a weight management product tailored for women), Replace™ (an isotonic sports drink in both powder and carbonated format) and Pro-Fit™ (a high protein ready-to-drink beverage). In New Zealand, NNL’s products are primarily distributed through the route channels (gyms, health food shops, specialty stores and specialty nutrition shops) and retail channels (supermarkets, oil and convenience retail outlets) whilst its Australian sales are made predominantly through the route.

The Group’s Food Processing Division comprises of the business segments – Bakery, Butchery, Beverages as well as Contract Packing for Dairy and Juice based Drinks. Envictus’ Bakery business includes its wholly-owned subsidiary, Family Group which produces fresh breads and buns under the Daily Fresh and Family brand while Deluxe Food Services Sdn Bhd, another wholly-owned subsidiary, produces frozen bakery items. The Group’s Butchery business manufactures and processes cold cuts, sausages, portion control meat and smoked salmon for distribution to supermarkets, hotels and restaurants. For the Beverages business, the Group’s canned beverages are produced by Polygold Beverages Sdn Bhd in Seremban, Negeri Sembilan. The business’ stable of products include the Polygold brand of carbonated and noncarbonated drinks, Air Champ energy drink and Power Champ isotonic sports drink. Envictus successfully produced the 325ml PET bottle carbonated drink in June 2014 specially designed to suit the China market and has introduced it to the market. The Group also entered into the ready-to-drink segment via a joint venture in Envictus Dairies NZ Limited to establish New Zealand’s first state-of-art, UHT Aseptic PET bottling line for dairy, juice and water products at the Whakatu Industrial Park. 
Image result for envictus international food processing
Envictus International operates namely in 4 segments of businesses.
1) Trading & Frozen Food
2) Food Services
3) Nutrition 
4) Food Processing
The revenues for respective business segments are shown in the chart below.

Investment Merits:
1) Established management team: The Chairman & CEO of Envictus has been with the group since listing in 2004. Currently, both of them owns 30.75% stake in the company.
"Dato’ Jaya J B Tan is the Non-Executive Chairman of the Company and was
appointed to the Board since 23 December 2003. He graduated from the University
of Arizona and is a Mechanical Engineer by training. He has extensive experience
in forestry, property development, food retail operations, trading and financial
services. Previously, he has served as Chairman of several companies quoted on
the stock exchanges of Malaysia, United Kingdom, Singapore, Australia and India.
Dato’ Kamal Y P Tan is the Group Chief Executive Officer of the Company and was
appointed to the Board on 23 December 2003. He was appointed as the Executive
Director of the Company upon its listing on 23 December 2004 and has been redesignated
to the current position since 20 January 2009." 
(source: Annual Report 2015 )
2) Tee Yih Jia(TYJ) Food Manufacturing as the 2nd largest shareholder.
Goi Seng Hui of TYJ has an extensive network to markets outside Malaysia. The entrance of TYJ may see Envictus, growing its business outside Malaysia.

3) Proven Businesses: 
Envictus has sold the dairies and packaging businesses and the relevant intellectual
property to Asahi Group Holdings Southeast Asia Pte Ltd on 10 April 2014 for US$328,787,704.

Therefore, i can conclude that the management team is able to identify opportunities in area for investment.

4) Steep Discount to NTA.

In the latest quarter, the NTA is  RM$2.74 or abt S$0.90. The last traded price is S$0.53 as of 21st Oct 2016.

Saturday, October 15, 2016

AIMS PSF Updates

Some updates:

1) Gradually increasing dividend paid out per quarter, with the recent quarter being the highest of A$0.021443. The dividend has almost doubled as compared to 26-Sep-14 where a dividend of A$0.01088 was paid out.

Quarterly Dividend Amount in A$

2) Continuous share buyback

Its share capital has reduced from 50.6 million shares to 45 million shares since Dec 2013. This will greatly increase the NTA value. Its NTA has increased from A$1.16 in 2013 to A$2.05, Sep 2016.

3) NTA increased significantly from A$1.16 to A$2.05 from Dec 2013 to Sep 2016, or a 77% increase.

4) Steep discount to NTA. Currently trading at A$1.32 or a 35.6% discount to its NTA.

5) There is no debt. =)

Tuesday, October 11, 2016

Forise Int: A potential multi-bagger ?

Portfolio restructuring.

1) Forise has disposed off some of its garment manufacturing facilities. The disposal is $1.
This is significant to Forise as the entities disposed has a negative assets of RMB$100 over million, and carrying debts amounting to above RMB$200 million. After the disposal, NTA will increase from negative RMB5.59cts to positive RMB1.69 cts.

2) With a share capital of 2.13 billion shares and closing price of 1.6cts on 7th Oct, its market capital will be $34 million. To exit from watchlist, Forise got to be profitable & a market cap of above S$40 million.

3) Following the disposal of assets, Forise will NOT be a cash company. Its garment trading business will be operating. Forise has divested into providing strategic planning, corporate advisory, financial restructuring advisory and management consulting services. This will allow the shares of the company to continue trading.

Potential Catalyst

1) Forise Group MAY inject businesses into Forise Int. During EGM, a shareholder asked if Forise is the only listed entity of the whole of Forise businesses. The CEO replied "yes".This implied that there might be a chance that Forise Group might inject businesses into Forise Int just like what CEFC did.

2)  Jin Liqun, President of China Fortune Management Fifty Persons Forum and Chairman of China International Capital Corporation Limited and former Deputy Minister of Ministry of Finance, officially issued member qualification certificate of “China Fortune Management Fifty Person Forum” to Wang Xin. In terms of reputation wise, Wang Xin has the reputation in the chinese community.

3) Of course, getting out of watchlist.

Tuesday, September 20, 2016

IFS Capital: What's brewing ?


IFS Capital Limited (“IFS”), as a regional Group provides commercial finance services like factoring, hire-purchase/leasing, loans, government-assisted schemes and trade/export finance, to small and medium sized enterprises (“SMEs”).

The Group also provides bonds and guarantees, credit insurance and general insurance through its wholly-owned subsidiary, ECICS Limited.

Recent Development:

1) Will be place on watchlist if market cap is below $40 million & making 3 yearrs of consecutive losses. Has proposed rights issue at 3 rights for every 2 shares at $0.22. Upon completion of rights issue, share capital will be increase to 375 million shares from 150 million shares.

Assuming a share price of $0.22, thats a market cap of S$82.5 million.

2) Have been providing provisions for loans and impairment on investments in the last few years, resulting in losses. Investors should note that IFS is operational profitable.

3) Its 34% ownd Thai subsidery is profitable, which is one of the key contributor to its earnings.

4) Rights issue is non-underwritten. Philips Asset will subscribe for all the unsubscribed rights during this exercise. This might result in an increase in stake from 40% to 76%.

My Opinion:
1) The primary objective of the company now is to get out of watchlist. With the rights issue coming up, IFS will exit the watchlist.

2) Whats up with the S$49 million raised from the rights? The easiest way to boost its earnings is to privatise its thai listed subsidery. The market cap of IFS capital PCL is S$49 million at B$2.62. My guess is that IFS will take its thai arm private.

3) Short term pain for long term gain. Given that the last 3 years of losses by providing provision & impairment, IFS looks like it is taking the painful step of doing a major impairment & writeoff in FY2016, so as to start tFY2017 profitable. In the latest announcement, IFS will be registering a loss for its 3rd FY2016, due to allownance for loan losses & impairments.

4) After the rights issue, IFS will have $48 million in cash & cash equivalents as report on 1HFY2016, + $49 million from rights issue, bringing its cash to S$97 million or S$0.25 after the enlarged share capital. Including its listed thai subsidery, its cash($0.25) + listed subsidery($0.044 ) will worth $0.294.

My guess is $0.29 is a fair value to look at ...

Sunday, September 18, 2016

Is Rickmers worth a bet at 5cts ?

In the latest announcement by Rickmers, it is stated that the re-sale market of vessels are very weak.

The prices for 4400 TEU & 3500 TEU 10 years old vessels are trading at below US$10 million.

Rickmers has 20 fleets of vessels. Assuming all the vessels are 4400 or 3500 TEUs, the market values of its vessels should not be more than US$200 million.

Its outstanding debts before debt restructure, is about US$400 million.

On its financial statement, its vessel is recorded as US$640 million , but market value is worth US$200 million or less.

Technically, rickmers is worth negative US$200 ( US$200 million asset - US$400 million ) ,
we are looking at negative US$0.22 per share.

In my opinion, it is not worth the bet....

Monday, September 05, 2016

Aspial : Re-gaining its shine

Aspial has been growing its portfolio of business in mainly 3 areas,
1) Property development
2) Jewellery
3) Pawn Broking Business

As of 30th June 2016, Aspial has booked in S$1.5 billion in sales for its local & Australia property project.

S$1.1 billion of revenue in Australia property to be recognize over 2018 - 2020.

S$485 million of revenue in Singapore property projects to be recongise from 2HFY2016 onwards.

My Analysis:

1) Using its 5 year average net profit margin of 11%, Aspial is expected to earn about $165 million from now till 2020.

2) Aspial has issued listed bonds which expires on 2020. This is also in-line with the end of recognise of its Australia property projects. From my understanding of Australia's property framework,  revenue can only be recognise after TOP  & handing over the keys to owners. It is unlike Singapore, where revenue is recognised progressively as the project is being built. The deposit of the purchase of property is placed in custody with a Law Firm in Australia. I would believe there is some credibility in the figures given.

3) Aspial is replenishing its  land bank overseas. It will focus on Penang & Brisbane properties in coming years.

4) Aspial has been able to create value for its shareholders. The share price has rose from 2cts in 2002 to 26cts currently. Thats a 1200% returns in 14 years or 85% on a yearly basis since listing. I believe the board of management is on  the right track to bring the company to greater heights.