Tai Sin

[Shrivathsa]

I did a quick estimate of the future cash flows and expected value of the future cash flows.

The basic assumptions made are

Risk Free rate is 4% i.e. CPF SA rate

ROIC of 10%, which is the lowest they have done in the last 5 years.

Book Value growth rate of 8%.

AAA bond rate of 4.76%, so gives us a discounting rate of 8.76%

The discounted value of all the future cash flow @ 8.76% is 97 cents, which assuming a payout ratio of 46% will translate into cash of 45 cents (SGD).

This will leave one with a stub value of 28 cents after 20 years.