Boustead Singapore

[Curiousparty]

I am interested in the geo spatial segment.

Over the past 5 years, revenue has grown CAGR of 11% and profits before tax by 14%. It shows that due to operating leverage, net profits can grow faster than revenue.

If it follows the P/E of software companies, the valuation can range from 15-20 times of current earnings which is slightly more than the current market cap of Boustead Singapore.

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May I ask where did you get the PE ratios of the software companies?

Boustead's geo-spatial segment is essentially a monopoly services - should merit the higher end of the PE ratios??

First of all, they only own 88% of the subsidiaries operating the geo-spatial business, so you'll have to add a 12% discount to any valuation.

Second, there is a non-zero chance that they will lose the distributorship (l know I know, it's a very low probability). But if that happens, your valuation for this segment will not settle at any P/E ratio. It will be zero.

good

There is a low chance that Boustead will go bankrupt too. Any valuation would thus be quite meaningless...haha...

There is also a chance (albeit very low) that some banks may lose their coveted banking license from MAS right?