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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UOL Group Limited: 5 Key Earnings Highlights
- Original Post from The Motley Fool Sg

UOL Group Limited (SGX: U14) reported a strong increase in net profit excluding one-offs for the first quarter of 2019.


UOL is a Singapore-listed property company with S$20 billion of assets under management. The property group is spread across many aspects of the property market such as property development, property investments and hotel operations.


Here are the important points to take note of from UOL’s latest earnings report.


Key numbers



  1. Revenue for the quarter was up 12% to S$741.2 million while gross profit grew 27% to S$314.02 million. Looking at the breakdown, the property development segment saw a 24% increase in revenue year-on-year. This was on the back of revenue recognition from development projects. Similarly, the Property Investment and Hotel Operations segments saw revenue increase by 4% and decrease by 6% respectively. The property investments segments saw an increase due to a ramp-up in occupancy of UIC building and maiden contribution from 72 Christie Street which was acquired in December 2018. Hotel Operations, on the other hand, saw a decrease due to the closure of Pan Pacific Orchard for redevelopment, and lower revenue from hotel operations in Australia. Lastly, the management services and technologies segment saw growth of 16% year-on-year.




Source: UOL first quarter presentation slides



  1. UOL’s profit attributable to equity holders decreased by 5% year-on-year to S$72.4 million. However, if a one-off accounting reversal due to UIC consolidation is excluded, attributable profits would have increased by 27% to S$104.3 million.

  2. UOL’s earnings per share (EPS), followed suit decreasing by 4% to S$0.086 cents year-on-year.

  3. Moving on, the property conglomerate saw its net asset value (NAV) per share increasing by 2% sequentially to S$11.49.

  4. Lastly, UOL saw its financial position strengthening with net debt decreasing from S$4.03 billion to S$3.79 billion and the net gearing ratio reducing from 28% to 26% sequentially.


Looking ahead


UOL Group Chief Executive Liam Wee Sin commented:


“We are pleased with the strong operating results for 1Q19 and are particularly encouraged by the good sales momentum in the last two months for The Tre Ver, which is now over 70% sold. We expect keen interest for Avenue South Residence which capitalizes on the Greater Southern Waterfront growth story.”


Additionally, UOL commented that:


“UOL expects steady demand and tightening vacancy to support office rents, while retail rents remain under pressure amidst competition from e-commerce and a tight labor market.”


The Foolish conclusion


At the end of trading on Friday, UOL shares closed at S$7.26 apiece, translating to a price-to-book ratio of 0.63 and a dividend yield of 2.41%.


Click here nowfor yourFREEsubscription toTake StockSingapore, The Motley Fool’s free investing newsletter. Written byDavid Kuo,Take Stock Singaporetells you exactly what’s happening in today’s markets, and shows how you can GROW your wealth in the years ahead.


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Motley Fool Singapore contributor Esjay contributed to this article. Esjay does not own shares in UOL.


The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore contributor Tim Phillips doesn’t own shares in any companies mentioned.


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Is Thai Bev A Bargain Now?
- Original Post from The Motley Fool Sg

Thai Beverage Public Company Limited (SGX: Y92), or Thai Bev for short, is Thailand’s largest and one of Southeast Asia’s biggest beverage companies, with distilleries in Thailand, Scotland, China, and Myanmar.


It is listed on the Singapore market and sports a market capitalisation of S$18.2 billion. It has four core segments – spirits, beer, non-alcoholic beverage, and food.


Between 1 Jan to 31 Dec 2018, Thai Bev’s total return, which includes reinvested dividends, has underperformed the Straits Timnes Index (SGX: ^STI). The former dropped a staggering 31.7% compared to the latter’s drop of 6.5%.


Has the lacklustre performance by Thai Bev’ made it a bargain at current prices?


To find out we will be using four metrics, namely, its price-to-earnings (P/E) ratio, its price-to-book (P/B) ratio, its dividend yield and its net-debt-to-equity ratio.


The F&B conglomerate’s fiscal year ended on September 2018, for FY18. It recorded earnings per share (EPS) of THB$ 0.74 which converts to S$0.03 (S$1 = THB$23.4). With Thai Bev’s current share price at S$0.72, this implies a P/E ratio of 24 at current prices.


Over the past four years (2015-2018), the F&B conglomerate’s EPS hasbeen beteweenTHB$ 1.37 to THB$0.74. So, Thai Bev’s latest EPS was the lowest in the past four years.


At the end of the of FY2018, Thai Bev reported a Net Asset Value of THB$4.82 (S$0.21). This results in a P/B ratio of 3.4 at current prices. Being a services company, it is not unusual to see a high P/B ratio for Thai Bev.


A better comparison couldits P/B ratioagainst the industry average or the company’s historical P/B for a better idea of its current valuation.


At end September 2018, Thai Bev had a net debt position of THB$208.6 billion, while total equity stood at THB$121.2 billion. This indicates that it has a net debt to equity position of 172%. Thai Bev is highly leveraged and any hiccups in its operations could be uncomfortable.


Lastly, Thai Bev’s dividend has decreased over the last four years, moving from THB$0.61 in 2015 to THB$0.39 in 2018. This means that at current prices, Thai Bev is offering investors a dividend yield of 2.4%.


Thai Bev might not be a bargain, despite its underwhelming performancelast year. The four metrics don’t paint a glowing picture for the company. But it could be wortha closer look.


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1 Simple Number for Understanding 3 Important Areas of UOL Group Limited
- Original Post from The Motley Fool Sg

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


Let’s examine the conglomerate using one simple metric: the return on investment, or ROE.


Why ROE?


But why should we use the ROE?


This financial metric gives investors important insight on a company’s ability to generate a profit using the shareholders’ capital it has. An ROE of 20% means a company generates S$0.20 in profit for every dollar of shareholders’ capital invested. In general, the higher the ROE, the more profitable a company is. A high ROE can also be a sign that a company has a high-quality business.


That being said, it’s worth noting that the use of high leverage – which increases the financial risk faced by a company – can also increase a company’s ROE.


Calculating the ROE


The ROE can be calculated using the following commonly used formula:


ROE = net profit / shareholder’s equity


The ROE can also be calculated using a different approach, as shown below:


ROE = asset turnover x net profit margin x leverage ratio


Doing so will reveal three important aspects about a company: How well it is managing its assets, how efficient it is at turning revenue into profit, and how much financial risk it could be taking on.Click here for more information about using this formula to calculate the ROE.


Let’s turn our attention to the ROE of UOL Group.


The acid test


Asset turnover measures a company’s efficiency in using its assets to generate revenue. It is calculated by dividing a company’s total revenue by its assets.


UOL Group had total revenue of S$2.1 billion and total assets of S$19.6 billion in its fiscal year ended 31 December 2017 (FY2017). These two figures giveus an asset turnover of 0.107.


The net profit margin measures the percentage of revenue that is left as a profit after deducting all expenses. For FY2017, UOL Group had a net profit margin of 47%, based its net profit of S$987 million and revenue of S$2.1 billion.


Lastly, we have the leverage ratio, which shows the relationship of a company’s total assets to its equity. It is calculated by dividing total assets by equity.Ahigher ratio means a company is funding its assets with more liabilities, resulting in higher risk.In FY2017, UOL Group had total assets and total equity of S$19.6 billion and S$14.1 billion, respectively. The two numbers combine to gives it a leverage ratio of 1.4.


When we put all the numbers together, we arrive at an ROE of 7% for UOL Group.


Click here nowfor yourFREEsubscription toTake StockSingapore, The Motley Fool’s free investing newsletter. Written byDavid Kuo,Take Stock Singaporetells you exactly what’s happening in today’s markets, and shows how you can GROW your wealth in the years ahead.


TheMotley Fool’s purpose is to help the world invest, better.Like us on Facebook to keep up-to-date with our latest news and articles.


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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore contributor Lawrence Nga doesn’t own shares in any companies mentioned.



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The Weekly Nibble: Best Dividend Shares
- Original Post from The Motley Fool Sg

Here are some of the most popular articles that have appeared on The Motley Fool Singapore’s website for the week.


Singapore’s Top 5 Dividend Shares Among the World’s Best


Do you like income stocks?


In this article, I looked at the top five Singapore-listed companies that are part of the FTSE All-World High Dividend Yield Index sporting the highest dividend yields. The FTSE All-World High Dividend Yield Index contains 1,389 globally-listed shares that have a higher-than-average dividend yield. The index does not include real estate investment trusts (REITs) and stocks that are forecast to pay no dividend over the next 12 months.


Companies discussed in the article include Hutchison Port Holdings Trust (SGX: NS8U), StarHub Ltd (SGX: CC3), Singapore Telecommunications Limited (SGX: Z74), M1 Ltd (SGX: B2F) and Venture Corporation Ltd (SGX: V03).


2 Singapore REITs I Am Watching This Week


My Foolish colleague, Jeremy Chia, touched on why he kept a lookout for two REITs – Keppel DC REIT (SGX: AJBU) and CapitaLand Mall Trust (SGX: C38U) – when they released their earnings during the week.


Keppel DC REIT released its earnings on 22 January while CapitaLand Mall Trust announced its financial results on 23 January.


3 Singapore Blue Chips That Have More Than Doubled Their Profits In The Last Decade


In this piece, Lawrence Nga explored a total of three Straits Times Index (SGX: ^STI) stocks that have more than doubled their profits in the last 10 years. Do jump into the article to know what the companies are.


Maximise dividends on your REITs with our brand-new Complete Guide To Buying The Best Singapore REITs. We reveal everything we think you need to know about finding the best REITs that hands you a fat dividend cheque ...even if you have no REITs experience at all! Get instant access to your 100% FREE, actionable, 42-page PDF guide here.


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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. The Motley Fool Singapore has recommended units of CapitaLand Mall Trust. Motley Fool Singapore contributor Sudhan P owns units in CapitaLand Mall Trust.


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1 Risk That Dividend Investors Should Know Before Investing In SATS Ltd Now
- Original Post from The Motley Fool Sg

SATS Ltd (SGX: S58) is a company with two business segments: Food Solutions and Gateway Services. The Food Solutions segment covers airline catering, food distribution, and industrial catering whereas the Gateway Solutions segment is involved in ground handling services of passengers, flights, and cargo.


In a previous article, I highlighted a number of reasons why SATS might be a good share for dividend investors to own for the long term. As a quick recap, those reasons were:



  1. SATS has a solid financial track record

  2. It has a growing dividend

  3. The balance sheet is strong


But, all companies come with risk and there is one risk with SATS that investors should take into account as well before deciding whether they should be investing in the company right now.


The risk: A high valuation


As investors, we should always invest in a share at a price that’s less than its value. This applies not only to value investors, but also to dividend investors.In simple terms, that means we should be paying less than a dollar for each dollar of assets.


One way to gauge SATS’s valuation is to compare its price-to-earnings (PE) and price-to-book (PB) ratios with those of the market. 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 barometer, theStraits Times Index (SGX: ^STI).


SATS’s share price is at S$4.77 currently, which gives the company PE and PB ratios of 20.5 and 3.3, respectively. These are significantly higher than the SPDR STI ETF’s selfsame ratios of 11.5 and 1.1.


On one hand, it is clear that SATS exhibits some positive traits (its good track record of growth, history of growing its dividend, and strong balance sheet). On the other hand, investors need to consider whether these traits will be sustainable in the long run; it’s a crucial consideration given the company’s high valuation right now.


Conclusion


There are many things to like about SATS as a dividend stock for the long-term. But, investors need to consider whether its current high valuation (as compared to the market average) is justifiable.


Click here nowfor yourFREEsubscription toTake StockSingapore, The Motley Fool’s free investing newsletter. Written byDavid Kuo,Take Stock Singaporetells you exactly what’s happening in today’s markets, and shows how you can GROW your wealth in the years ahead.


TheMotley Fool’s purpose is to help the world invest, better.Like us on Facebook to keep up-to-date with our latest news and articles.


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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore contributor Lawrence Nga doesn't own shares in any companies mentioned. The Motley Fool Singapore has a recommendation for SATS Ltd.


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