Operation = Singapore, Middle East, Thailand, China, India
52Wk High = 0.320
52Wk Low = 0.220
ROA = 7.78%
ROE = 21.37%
EPS = 0.0426 (based on 1H2010)
P/E = 5.39 (7.29 Historical high)
Intrinsic Value
P/E Model = 0.311 SGD (Based on Fair P/E of 7.29)
DCF Model = N.A (Inconsistent Operating Cash Flow and extreme CAPEX from 2007)
EPS Model = 0.453 SGD
Comment
Taking the more conservative P/E of 0.311, Yongnam is a good buy. Keeping in mind that it is one of the pioneer in modular strutting steel construction, which seems to be the one of the main reason for numerous contracts win in Singapore after the nicole highway accident. Furthermore, it also provides professional civil engineering services which includes sophisticated engineering designs.
Further supported by satisfactory 1Q2010 result, I believed that prospect of Yongnam would be good. Even if its penetration into foreign market fails, it still has long term contract such the MRT line construction.
I believe that this stock would raise to its fair price in 6months-1 year time.
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