Operation = Singapore, Middle East, Thailand, China, India
52Wk High = 0.574
52Wk Low = 0.270
ROA = 35% (2009)
ROE = 39% (2009)
EPS = 0.0381 (based on 1H2010)
P/E = 11.81
Intrinsic Value
P/E Model = 0.572 SGD (Based on Fair P/E of 15)
DCF Model = N.A (Inconsistent Operating Cash Flow )
EPS Model = 0.535 SGD
It seems that the company is experiencing slow growth with revenue from its Sea Deep Shipyard falling sharply due to the effect of 2009 crisis.
Outcome of the court case with regard to the sale of 15% stake in PPL Shipyard would be a crucial factor as if the sale to Yangzhijiang holdings limited is passed, Baker Tech would made made a revenue of 155 million USD as compared to SMC which only offers 60 million SGD.
It seems that Baker Tech need to take higher gearing ratio and make use of its good financial heatlh with almost no debt and high amount of cash to expand through acquisition of companies in the sector. Otherwise, it seems to me that Sea Deep, the main source of revenue for Baker Tech has lost its competitive advantage as the fall of revenue could not be explained due to 2009 crisis alone.
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