Sunday, February 23, 2014

Sing Holdings

Sing Holdings is a property developer listed on the SGX.

Here is a link to their web-site

http://www.singholdings.com/index.html

The idea for this post came about from some forum comments on valuebuddies.com.

http://www.valuebuddies.com/thread-23-page-99.html

Put simply, there seems to be quite some angst among small shareholders that the share price is not motoring along up.

I have used a simple way to value the share price.

All the value for a developer is in its assets, so, reasonably, one can expect their NAV to tell the story.

Without going too much into whether they will grow NAV at current rate, it is reasonable to estimate their current NAV, historic trends on how their NAV is valued to estimate what is the downside and upside to an investment today.

http://infopub.sgx.com/FileOpen/SHLFY2013.ashx?App=Announcement&FileID=275250 is a link to get their up to date NAV.

Over the last five years, their NAV has grown from 0.44 in 2009, dipped in 2010 and then grown over the last four years.

Parameter 2009 2010 2011 2012 2013
Net Asset 146465 154116 179511 231216 253265
# Shares 362009 400995 400995 400995 400995
NAV/Share 0.404589 0.384334 0.447664 0.576606 0.631591

Over the same period, their share price has fluctuated from a high of 1.1 times book value to a low of 0.6 times book value

Price - High 0.44 0.36 0.44 0.51
Price - Low 0.285 0.255 0.3 0.37
PTB - High 1.1 0.9 1.0 0.9
PTB - Low 0.7 0.7 0.7 0.6

With the current NAV at 63.1 cents, reasonable estimate is that the share price will at best appreciate to 62.9 cents i.e. 0.99 times NAV, which is the average over the last five years of PTB. 

The implicit upside potential at current share price of 36 cents is 74%, which seems too high.

However, against this, one has to consider that unlike previous years, there is a fear of property stocks. 

The downside is that the share at 36 cents is price at PTB of 0.6. Hence, there is very little downside. 

However, chances are it will stay at this level for a year till the mood for property stocks improves, it will improve over a long enough time, but that wait is likely to be quite long

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