(08-10-2013, 11:06 AM)evolance Wrote: [ -> ]Tks Clement..anyway we can use the order book mentioned by Muck to finetune the projection? Though there are 3 other divisions not covered yet
The problem with dcf for Boustead is that a large portion of their cash flow is cyclical in nature and it is therefore necessary to look at part of the recent eps growth rate as part of the business capex cycle. The hard part is that if we use average past 5 year profits as a proxy for full cycle performance, it is then difficult to find a reasonable proxy for growth rates for future cycles. It does not help that the extreme liquidity in the market seems to be accelerating the normal business cycle. The investment property segment provides recurring income and is easier to value with dcf models.
Boustead Singapore Limited (“Boustead”) is pleased to announce that BP Lands Sdn Bhd (“BP Lands”), a wholly-owned subsidiary of Boustead Projects Pte Ltd (“Boustead Projects”), a wholly-owned subsidiary of Boustead), has entered into a Shareholders Agreement (“Shareholders Agreement”) with Tat Hong International Pte Ltd (“THI”), AME Land Sdn Bhd (“AME”) and L&M Ground Engineering Sdn Bhd (“L&M”) (collectively, the “JV Partners”) to jointly undertake mixed property development in Iskandar Malaysia, through Tat Hong Industrial Properties Sdn Bhd (the “JV Company”).
The JV Company intends to develop six parcels of vacant industrial land in Nusajaya, Iskandar Malaysia’s Flagship Zone B, which is home to several signature developments including Kota Iskandar (Johor State New Administrative Centre), the Southern Industrial and Logistics Clusters (SiLC), Puteri Harbour Waterfront Development, EduCity and Afiat Healthpark, among others.
http://info.sgx.com/webcoranncatth.nsf/V...F00329B24/$file/Boustead_Announcement-Boustead_Subsidiary_Enters_Joint_Venture_for_Developments_in_Iskandar_Malaysia-25.10.2013.pdf?openelement
It is a good project for track record. Lucrativeness may not be as attractive as Singapore based projects.
Currently, Boustead Project has 3 project companies pending: BP-SCC, BP-EA and BP-TN.
SCC if it turned out to be supply chain city will be a big one. However, formal announcements have been a long time coming - negotiations have been protracted it seems.
Anyway, the recent out-performance could be attributed to AM Frasers new coverage:
We ini?ate coverage on Boustead with a BUY
recommenda?on and a target price of S$1.91. Boustead
is a progressive global Infrastructure‐Related Engineering
Services and Geo‐Spa?al Technology Group listed on the
Singapore Exchange. Boustead’s Engineering services
include Energy‐Related Engineering, Water &
Wastewater Engineering and Real Estate Solu?ons.
Book value not reflec?ve of true underlying market
value. Boustead’s industrial leasehold proper?es are
currently carried on its books at cost, which stands at
approx. S$105.6mil. This is substan?ally lower than our
revalued net asset value of S$238.2mil. A REIT lis?ng
could poten?ally catalyze the realiza?on of the hidden
value and trigger its share price outperformance.
Building the recurring income stream. Boustead’s Geospa
?al division has tradi?onally been a cash cow,
consistently genera?ng stable recurring income between
2010‐2013. We highlight that Boustead’s emphasis on
expanding its design‐build‐lease por?olio would further
strengthen its recurring income stream. We forecast
recurring revenue from these 2 segments to encompass
59% of Group’s profit before tax in FY14.
Capturing the high growth poten?al in O&G. How o?en
do you see a company that has businesses in today’s high
growth sectors like Subsea, LNG and Floa?ng Produc?on
Storage and Offloading? With a mixture of products that
serve these a?rac?ve markets, we believe Boustead’s
engineering division prospects are extremely bright.
Pu?ng it all together. Relying on growth of its four
dis?nct divisions, Boustead’s fortunes are not solely
reliant on the cycle of just one division, and this will
con?nue to leave it well‐posi?oned to ride out economic
uncertain?es or downturns.
Ini?ate BUY with FV S$1.91. We derive a FV of S$1.91
from our sum‐of‐the‐parts (SOTP) valua?on, a?er
incorpora?ng a 20% conglomerate discount. Our SOTP
valua?on of S$2.39 includes a DCF‐derived valua?on of
S$1.05 per share for the Geo‐Spa?al technology
segment, which reflects the recurring cash‐genera?ve
ability and stable growth nature of the segment.
Vested
where are those sites located? Nusajaya very big.
(25-10-2013, 06:37 PM)greengiraffe Wrote: [ -> ]Currently, Boustead Project has 3 project companies pending: BP-SCC, BP-EA and BP-TN.
Hi GG, is there another BP-Mandai?
(25-10-2013, 06:43 PM)opmi Wrote: [ -> ]where are those sites located? Nusajaya very big.
I believe all 6 are in Southern Industrial and Logistics Clusters (SiLC). Pg 4 of attachment. The only remaining vacant land parcels apparently.
Boustead is definitely a much better BUY than counters like New Toyo , etc . Very well diversified and only trading at 10.6 times forward earnings ... This is taking into account the fact that it has already up 38% this year. It would very likely hit 2 dollars and beyond ... New toyo is overvalued based on its current P/E of 8 plus ...
