Thanks a lot for your hardwork shanrui_91. I'm very impressed by the in-depth research, especially Part 3A! Looking forward to Part 3B.
Hi shanrui_91, I think your write up is way better than those written by professional analysts.
I am floored with the details you have written up on this company. You have just won me over and I am now an avid reader of your blog.
Thank you a lot for the support
Don't forget that I have a vested interest, I will definitely want more people to buy into my presentation
It is a good analysis & its a good business. I may have missed it whats ur fair value & how do u arrive at it?
I will comment on the valuation in post 4 after my post 3B, but i can tell you that it is quite a fair value now even at the current PE with such business model and fundamental
Thanks shanrui. May I ask how did u manage to get so much info abt SETSCO?
(12-01-2012, 11:32 PM)FFNow Wrote: [ -> ]Thanks shanrui. May I ask how did u manage to get so much info abt SETSCO?
Well, I have always been better at finding information online than my peers in school because I will be able to find critical keywords from one piece of information which will lead me to a second source and so on and forth.
I started off with their website which listed their accreditations from SAC, so i decided to go SAC to search. This search then provides me with the name of its competitors TUV SUD and SGS. The search on SGS allows me to understand ITC industry and some of the largest player in the field. From the accreditation, i also try to understand what all those different aspect of testings are about which lead me to the ISO 9001, risk-based inspection and the building act.
Information from SETSCo has not been very forthcoming as their website is not updated and their IR gives std ans that can easily be derived from the annual report
"We do not disclose guidance on profit margin or revenue breakdown by business sector.
However, if you refer to our latest 3QFY11 results, operating profit margin for Test and Inspection Services came in at 18.8%.
2)Our contracts are varied across different sectors and we do have recurring clients.
3)The demand for the test and inspection business is expected to sustain despite the expected slowing down of the economy."
FY result is out.
Total profit increased by 14.2% and cash balance increased by 6 million.
Rev for both segment increased by 10%
Final dividend of 10.7 cents declared.
"GROUP OUTLOOK
The number of vehicles due for inspection is expected to remain high as the de-registration rate of
vehicles continues to be low.
With a comprehensive range and variety of services, it is expected that the test and inspection business
will continue to sustain its performance despite the anticipated economic slowdown."