UOL Group Limited Is Trading Close To Its 52-Week Low Share Price: Is It Cheap Now?
- Original Post from The Motley Fool Sg

UOL Group Limited (SGX: U14) is a property company that is involved in property development and management, property investments, and hotel businesses.


At the current price of S$6.26, UOL’s shares are just slightly higher than the 52-week low price of S$6.00. This raises a question: Is UOL cheap now? This question is important because if the firm’s shares are cheap, it might be a good opportunity for investors.


Unfortunately, there is no easy answer. However, we can still get some insight by comparing UOL’s current valuations with the market’s valuation. The three valuation metrics I will focus on are the price-to-book (PB) ratio, price-to-earnings (PE) ratio, and dividend yield.


I will be using the SPDR STI ETF (SGX: ES3) as a proxy for the market; the SPDR STI ETF is an exchange-traded fund that tracks the fundamentals of Singapore’s stock market benchmark, the Straits Times Index (SGX: ^STI).


UOL currently has a PB ratio of 0.6, which is lower than the SPDR STI ETF’s PB ratio of 1.1. Yet, its PE ratio is higher than that of the SPDR STI ETF’s (13.5 vs 11.5). Also, the property company’s dividend yield of 2.8% is lower than the market’s yield of 3.5%. The lower a stock’s yield is, the higher is its valuation.


In sum, we can argue that UOL is priced fairly to the market average due to its low PB ratio, offset by its high PE ratio and low dividend yield.


$STI(^STI.IN) $STI ETF(ES3.SI) $UOL(U14.SI)

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Should You Invest In Genting Singapore Ltd Shares Now?
- Original Post from The Motley Fool Sg

Genting SingaporeLtd (SGX: G13) became the first operator of an integrated resort in Singapore whenResorts World Sentosastarted operating in 2010. The destination offers a casino (one of only two casinos in Singapore), a water theme park, an aquarium, the Universal Studios Singaporetheme park, hotels, and many more.


Are Genting Singapore’s shares something you can consider investing in? For help to the answer, let’s look at the key historical financial figures and valuation numbers of the company.


Revenue and profit


We will start with the income statement. This statement, also known as the profit and loss statement, shows us how much revenue the company brought in by providing services or selling goods, and how much is left after paying all the various overheads needed to run the business. What’s leftover is known as profit.


The table below shows the key figures from Genting Singapore’s income statement in its last five financial years (the company has a 31 December year-end):

Source: S&P Global Market Intelligence


Genting Singapore’s revenue and net profit fell from 2013 to 2017. However, its gross profit and net profit margin improved over the years, which is excellent. I prefer companies with consistently rising revenue, gross profit, net profit, and net profit margin. Such a positive trend could point to sustainable competitive advantages at the company.


Cash and debt


Although revenue and profit are important, they do not tell investors the whole story. For instance, the income statement does not show if a company can survive a prolonged economic crisis. That is where the balance sheet comes into play. It can reveal the health of a company by providing a snapshot of its financial condition.


The table below shows the key figures from Genting Singapore’s balance sheet over the last five years:

Source: S&P Global Market Intelligence


Genting Singapore has a strong balance sheet; as of 31 December 2017, it had more cash than debt. It is very likely to able to meet its short-term financial obligations too since its current ratio is healthy. But, I do think that Genting Singapore’s current ratio of 4.8 at end-2017 is too high; cash sitting in the company’s bank account could be put to better use to generate higher returns.


Cash flow


Many of you may have heard the saying, “Cash is king”. Although the income statement shows the amount of profit a company makes every year, this profit does not necessarily translate into the actual cash that flows into a company’s coffers due to accrual accounting.


Accrual accounting requires businesses to record revenues and expenses when transactions happen, not when cash is exchanged. Also, the income statement usually includes non-cash revenues or expenses. To get a true picture of the flow of money in and out of a company, we have to look at the statement of cash flows.


The table below shows the key figures from Genting Singapore’s statement of cash flows, for the same period as its income statement and balance sheet shown above:

Source: S&P Global Market Intelligence


Genting Singapore had generated positive free cash flow in all the years under study. The figure has grown consistently as well, which is commendable. Free cash flow is cash that the company can use to dish out dividends to shareholders, buy back shares, make acquisitions, or strengthen its balance sheet, among other things.


Valuation


Yesterday, Genting Singapore’s share price closed the trading session at S$0.97, which gives the company a price-to-earnings (PE) ratio of 16 and a dividend yield of 3.6%. To put things into perspective, the SPDR STI ETF (SGX: ES3), an exchange-traded fund which tracks the fundamentals of Singapore’s stock market benchmark, theStraits Times Index (SGX: ^STI), had a PE ratio of 11.0 and a dividend yield of 3.6% on the same day.


The Foolish takeaway


The positives for Genting Singapore include a strong balance sheet and growing free cash flow. However, its revenue and net profit declined from 2013 to 2017, which is of concern to me. The company is also valued at a PE ratio that is higher than that of the market. Due to the aforementioned factors, I would put Genting Singapore on my watchlist and monitor it to see if things improve.


$STI(^STI.IN) $STI ETF(ES3.SI) $Genting Sing(G13.SI)

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Should You Invest In Genting Singapore Ltd Shares Now?
- Original Post from The Motley Fool Sg

Genting SingaporeLtd (SGX: G13) became the first operator of an integrated resort in Singapore whenResorts World Sentosastarted operating in 2010. The destination offers a casino (one of only two casinos in Singapore), a water theme park, an aquarium, the Universal Studios Singaporetheme park, hotels, and many more.


Are Genting Singapore’s shares something you can consider investing in? For help to the answer, let’s look at the key historical financial figures and valuation numbers of the company.


Revenue and profit


We will start with the income statement. This statement, also known as the profit and loss statement, shows us how much revenue the company brought in by providing services or selling goods, and how much is left after paying all the various overheads needed to run the business. What’s leftover is known as profit.


The table below shows the key figures from Genting Singapore’s income statement in its last five financial years (the company has a 31 December year-end):

Source: S&P Global Market Intelligence


Genting Singapore’s revenue and net profit fell from 2013 to 2017. However, its gross profit and net profit margin improved over the years, which is excellent. I prefer companies with consistently rising revenue, gross profit, net profit, and net profit margin. Such a positive trend could point to sustainable competitive advantages at the company.


Cash and debt


Although revenue and profit are important, they do not tell investors the whole story. For instance, the income statement does not show if a company can survive a prolonged economic crisis. That is where the balance sheet comes into play. It can reveal the health of a company by providing a snapshot of its financial condition.


The table below shows the key figures from Genting Singapore’s balance sheet over the last five years:

Source: S&P Global Market Intelligence


Genting Singapore has a strong balance sheet; as of 31 December 2017, it had more cash than debt. It is very likely to able to meet its short-term financial obligations too since its current ratio is healthy. But, I do think that Genting Singapore’s current ratio of 4.8 at end-2017 is too high; cash sitting in the company’s bank account could be put to better use to generate higher returns.


Cash flow


Many of you may have heard the saying, “Cash is king”. Although the income statement shows the amount of profit a company makes every year, this profit does not necessarily translate into the actual cash that flows into a company’s coffers due to accrual accounting.


Accrual accounting requires businesses to record revenues and expenses when transactions happen, not when cash is exchanged. Also, the income statement usually includes non-cash revenues or expenses. To get a true picture of the flow of money in and out of a company, we have to look at the statement of cash flows.


The table below shows the key figures from Genting Singapore’s statement of cash flows, for the same period as its income statement and balance sheet shown above:

Source: S&P Global Market Intelligence


Genting Singapore had generated positive free cash flow in all the years under study. The figure has grown consistently as well, which is commendable. Free cash flow is cash that the company can use to dish out dividends to shareholders, buy back shares, make acquisitions, or strengthen its balance sheet, among other things.


Valuation


Yesterday, Genting Singapore’s share price closed the trading session at S$0.97, which gives the company a price-to-earnings (PE) ratio of 16 and a dividend yield of 3.6%. To put things into perspective, the SPDR STI ETF (SGX: ES3), an exchange-traded fund which tracks the fundamentals of Singapore’s stock market benchmark, theStraits Times Index (SGX: ^STI), had a PE ratio of 11.0 and a dividend yield of 3.6% on the same day.


The Foolish takeaway


The positives for Genting Singapore include a strong balance sheet and growing free cash flow. However, its revenue and net profit declined from 2013 to 2017, which is of concern to me. The company is also valued at a PE ratio that is higher than that of the market. Due to the aforementioned factors, I would put Genting Singapore on my watchlist and monitor it to see if things improve.


$STI(^STI.IN) $STI ETF(ES3.SI) $Genting Sing(G13.SI)

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How To Outrun A Bear
- Original Post from The Motley Fool Sg

It was not long after Diwali was over when Singapore started getting ready for the next major festive event – Christmas.


I sometimes wonder why we can’t celebrate Diwali just that little bit longer.


Diwali, or the Festival of Light, for me is a reminder of the victory of light over darkness. It’s about the triumph of knowledge over ignorance. It is also about appreciating and understanding what is going on around us.


What’s volatility?


It was around the time of Diwali when I was asked by the morning crew on MoneyFM why Genting Singapore (SGX: G13), City Developments (SGX: C09) and Venture Corp (SGX: V03) were the three worst performers in the Straits Times Index (SGX: ^STI) in October.


Point is, I don’t think anyone really knows.


But what I do know is that October certainly lived up to its reputation as a volatile month for shares. Actually, stock markets could have gone either way – they could have ended the month deep in the red, which they did, or firmly in the green, which they certainly didn’t.


That is what happens with volatility. As it turned out, it was a very Red October.


Thing with volatility is that we deem it to be bad if shares fall. But we think it’s fabulous if the stock market rises. We can’t have it both ways….


….. we can’t vilify volatility if stock markets fall but praise it if shares rise.


Take your pick


In fact, during Red October, any one of the 30 companies that comprise the benchmark index could have ended up at bottom of the heap. It just so happened that the market decided to pick on those three.


That reminds me of a story I was told when I was a young boy. It was about two lads who were chased up a tree by a grizzly bear….


…. After a couple of hours, one boy turned to the other and suggested that they should make a run for it. The other boy pointed out that they could never outrun a bear….


…. the first boy then said he didn’t need to outrun the bear, he just had to outrun his friend. So, much for friends, eh!


The good and bad


Point is, the three biggest fallers in the Straits Times Index were just unfortunate to be caught in the crosshairs of seller. Volatility doesn’t discriminate. Good shares can be dragged down just as easily as bad ones.


But informed investors know the difference between good companies and bad ones. And when markets behave erratically – as they did in October – it can be a good time to buy.


Good companies, we need to remember, don’t turn into bad companies just because their shares have been sold off in the market….


…. Warren Buffett said: “We should only buy something if we would be happy to hold it, if the market shuts down for 10 years.”


Guiding light


That has been my guiding light. It should be yours too.


We should only buy a share if we are confident about its long-term prospects. We should only commit our money, if we can estimate how that share could reward us over the long term.


I am fortunate to have seen the benefits of income investing a long time ago. As such the stock market has been good place for me to park my money. In the short term, I get to fill my boots with dividends….


…. and in the long term, the shares of those companies that I own should grow and appreciate in price.


Something stupid


For me, investing means never being fixated about whether share prices will be higher or lower in the short term. It’s about buying wonderful companies at fair prices, then sitting back to enjoy the dividends, as they roll in.


And if the dividends grow over time, then so too could the share price. That is what I call the beauty of long-term dividend investing.


So, spend time looking for wonderful companies, then wait to buy them when prices look fair. You can always count on the market to do something stupid….


…. You just don’t know when it will happen. But Red October was one of those times. It was a great buying opportunity, and it will happen again.


A version of this article first appeared in Take Stock Singapore.


$STI(^STI.IN) $CityDev(C09.SI) $Genting Sing(G13.SI) $Venture(V03.SI)

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3 Things To Like About China Sunsine Chemical Holdings Ltd Right Now
- Original Post from The Motley Fool Sg

China Sunsine Chemical Holdings Ltd (SGX: CH8) is a leading speciality rubber chemicals producer. It also ranks as the world’s largest producer of rubber accelerators, and China’s largest producer of insoluble sulphur. The company serves more than 65% of the top 75 tire makers in the world, including brands such asBridgestone,Michelin,Goodyear,andPirelli.


China Sunsine was one of the best performers in Singapore’s stock market from September 2008 to September 2018. During that time frame, its share price rose more than 380% to S$1.05 on 24 September 2018. At the time of writing, China Sunsine’s share price is S$1.29, up by 23% from S$1.05. Behind the company’s long-term share price appreciation is a strong business. Here are three things to like about the company.


Good recent results


China Sunsine announced its 2018 third-quarter financial results in early November and reported that its revenue rose 22% year-on-year to RMB 775.6 million while net profit surged 85% to RMB 143.4 million. Free cash flow for the quarter ballooned more than 400% to RMB 245 million.


Increases in both sales volume and average selling price (ASP) of the company’s products led to the year-on-year revenue growth of 22% in 2018’s third-quarter; China Sunsine’s sales volume and ASP climbed by 9% and 12%, respectively, in the reporting period. On a quarter-on-quarter basis, however, the company’s ASP fell by 11% mainly because of a decrease in raw material prices and weakening demand from domestic tire makers.


In the first nine months of 2018, China Sunsine’s net profit jumped by 154% to RMB 532.6 million, with revenue climbing 35% to RMB 2.51 billion.


China Sunsine’s balance sheet was rock-solid. As of 30 September 2018, it had cash and bank balances of RMB 822.3 million with no debt. The robust balance sheet should enable the company to weather through harsh market conditions, if any.


Tailwinds ahead


Even though the ASP for rubber chemicals started to fall since the end of June 2018, China Sunsine’s management noted in the 2018 third-quarter earnings update that the ASP had stabilised in October. The company added that Chinese tire makers have also started to increase their production utilisation rate in the fourth quarter of the year.


China is also considering a tax cut to revive its slowing automotive market. Such a move could indirectly increase China Sunsine’s ASP of rubber chemicals due to stronger demand from tyre makers.


Furthermore, there are tailwinds from higher production capacity at China Sunsine’s factories. The company announced at the end of November 2018 that it had received regulatory approval for a trial run of its 10,000-tonne insoluble sulphur production line. Once the trial run is successfully completed, commercial production will start. Meanwhile, a10,000-tonne expansion in TBBS rubber accelerator production is currently at the finalisation stage for China Sunsine and is expected to receive approval soon. Collectively, these developments could boost the company’s annual production capacity by 13% to 172,000 tonnes of rubber chemicals.


Low valuation


At China Sunsine’s share price of S$1.29 right now, the company has a low price-to-earnings ratio of just around 5. In comparison, the SPDR STI ETF (SGX: ES3), an exchange-traded fund which tracks the fundamentals of Singapore’s stock market benchmark, theStraits Times Index (SGX: ^STI), has a PE ratio of around 11.


$STI(^STI.IN) $China Sunsine(CH8.SI) $STI ETF(ES3.SI)

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3 Things To Like About China Sunsine Chemical Holdings Ltd Right Now
- Original Post from The Motley Fool Sg

China Sunsine Chemical Holdings Ltd (SGX: CH8) is a leading speciality rubber chemicals producer. It also ranks as the world’s largest producer of rubber accelerators, and China’s largest producer of insoluble sulphur. The company serves more than 65% of the top 75 tire makers in the world, including brands such asBridgestone,Michelin,Goodyear,andPirelli.


China Sunsine was one of the best performers in Singapore’s stock market from September 2008 to September 2018. During that time frame, its share price rose more than 380% to S$1.05 on 24 September 2018. At the time of writing, China Sunsine’s share price is S$1.29, up by 23% from S$1.05. Behind the company’s long-term share price appreciation is a strong business. Here are three things to like about the company.


Good recent results


China Sunsine announced its 2018 third-quarter financial results in early November and reported that its revenue rose 22% year-on-year to RMB 775.6 million while net profit surged 85% to RMB 143.4 million. Free cash flow for the quarter ballooned more than 400% to RMB 245 million.


Increases in both sales volume and average selling price (ASP) of the company’s products led to the year-on-year revenue growth of 22% in 2018’s third-quarter; China Sunsine’s sales volume and ASP climbed by 9% and 12%, respectively, in the reporting period. On a quarter-on-quarter basis, however, the company’s ASP fell by 11% mainly because of a decrease in raw material prices and weakening demand from domestic tire makers.


In the first nine months of 2018, China Sunsine’s net profit jumped by 154% to RMB 532.6 million, with revenue climbing 35% to RMB 2.51 billion.


China Sunsine’s balance sheet was rock-solid. As of 30 September 2018, it had cash and bank balances of RMB 822.3 million with no debt. The robust balance sheet should enable the company to weather through harsh market conditions, if any.


Tailwinds ahead


Even though the ASP for rubber chemicals started to fall since the end of June 2018, China Sunsine’s management noted in the 2018 third-quarter earnings update that the ASP had stabilised in October. The company added that Chinese tire makers have also started to increase their production utilisation rate in the fourth quarter of the year.


China is also considering a tax cut to revive its slowing automotive market. Such a move could indirectly increase China Sunsine’s ASP of rubber chemicals due to stronger demand from tyre makers.


Furthermore, there are tailwinds from higher production capacity at China Sunsine’s factories. The company announced at the end of November 2018 that it had received regulatory approval for a trial run of its 10,000-tonne insoluble sulphur production line. Once the trial run is successfully completed, commercial production will start. Meanwhile, a10,000-tonne expansion in TBBS rubber accelerator production is currently at the finalisation stage for China Sunsine and is expected to receive approval soon. Collectively, these developments could boost the company’s annual production capacity by 13% to 172,000 tonnes of rubber chemicals.


Low valuation


At China Sunsine’s share price of S$1.29 right now, the company has a low price-to-earnings ratio of just around 5. In comparison, the SPDR STI ETF (SGX: ES3), an exchange-traded fund which tracks the fundamentals of Singapore’s stock market benchmark, theStraits Times Index (SGX: ^STI), has a PE ratio of around 11.


$STI(^STI.IN) $China Sunsine(CH8.SI) $STI ETF(ES3.SI)

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