Please read the previous post for more information first on 28 Sep 2015.
Based on the Triple S Scorecard:
Although I suffered paper losses, but...
1. Cash is King - The company is still loaded with cash. As usual, having cash is important especially during period of downturn.
2. Order Book - For a construction firm, order book is important. Currently the company has an order book of $126 million with completion up till FY'18.
3. Able to Maintain Net Profit Margin - If you look closer at the profit margin breakdown above, the company is able to maintain it at 10% for the last 5 years. This is spectacular for a construction company, especially during these down times.
4. Future Projects - With so many infrastructure projects coming up, the company may have the possibility of getting more projects in future. Thus, increasing their order book in future.
5. Pass Triple S Scorecard - Based on the current lower price, the company still passes the Triple S Scorecard with flying colours.
What are the question marks?
Unable to Keep up the Dividend - The company most probably will not be able to keep up the 8 cents dividend. It should dropped back to "normal" for FY'16. In addition, Cash will be greatly reduced after the 8 cents dividend was paid up. How much will be left?
"Cash Cow" Dormitory Gone! - The dormitory leasehold will be up in Jan 2017. Revenue may dropped after that. Is the order book able to hold up the profit margin and revenue?
Dividend to drop or Revenue to drop or Profit to drop - any single result may cause the share price to drop between 2016 to 2017.
As usual, my view on this company is that - if you intend to invest now, it is a good time. But go slow and add slow.
I may consider to add more if the price remains at 0.255 or dropped further. A point to note is that after the 8 cents dividend, the NCAV price should be $0.235.
Current Price: 0.255 as of 27 Feb 2016
Please do your own due diligence before you invest in this stock.
Do note the author is vested in this stock/company.
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