TTJ Holding Ltd - Fairly Valued?
Now I shall write about another of my stock holding in the portfolio - another value gem found - TTJ Holding Ltd.
Profile in Short
TTJ Holdings Ltd is a company that deals with steel structure works and works on various government projects. It also operates one dormitory under the name of Terusan Lodge 1 in Singapore (but it will end in 2017 ~ A Cash Cow Gone!).
However I am not worried after looking at the presentation slides below:
In addition, anyone who is interested in this stock should take a look at this forum thread (more good stuff)!
The Value Stock Scorecard
Price: $0.385 (as at 28 Sep 2015)
Net Current Asset Per Share: $0.299 (-28.55%)
% Cash of Price: 62.51%
% Cash of Current Asset: 65.91%
Cash/Debt: 506.687 times
Discounted Net Asset Value: $0.316 (-21.69%)
Price to Sales: 1.429
Earning Yield: 11.59%
Dividend Yield: 20.78% (FY2015 Dividend has increased till 8 cents but not deem as special).
Debt to Equity: 0.13%
Profit Margin over 10 years: Able to improve/maintain profit margin at more than 15% despite lower Revenue.
10 year average PE: 9.12.
10 years Average ROE: 20.63%
10 years Average ROA: 11.54%
Value Stock: Yes – 9/14
Why So Good?
Great Profit Margin, ROA, ROE - The ability to generate great returns despite having lower revenue and within a difficult environment.
Order Book for 2016/2017 fulfilled - With the order book has been fulfilled for 2016 & 2017, revenue should be "saved". The question is if the management is able to maintain the Profit Margin. However, over the last few years, the company has managed to improved the profit margin since it was listed. Thus, without any change in the management team, I deem the ability to continue to maintain the profit margin to be unchange as well.
Further Potential Projects - As the Singapore Government will continue to improve the country's infrastructure and also to "save" the GDP, the company's track record will put them in the lead to get these projects as well.
Why So Bad?
Dormitory Business will end in 2017 - A big chuck of the revenue will be gone in 2017 as the lease expires. This has been a Cash Cow for the company since it was leased. Other than its main business, the company will need to find other avenues to earn more passive income.
In Short
Current net asset value is already more than 20% below the current share price. After 2017, profit margin may also fall and the quarterly result in 2016 will be a major indication of how the company will move in. With the above factors taken into account, TTJ Holdings Ltd seem to be near to the fair value now (I believe the price should be slightly more than 40cents in view that it is still deem as a value stock), unless the bumper dividend of 8 cents in 2015 will continue till 2016 or the management managed to secured another passive income avenue.
Please do your own due diligence before you invest in this stock.
Profile in Short
TTJ Holdings Ltd is a company that deals with steel structure works and works on various government projects. It also operates one dormitory under the name of Terusan Lodge 1 in Singapore (but it will end in 2017 ~ A Cash Cow Gone!).
However I am not worried after looking at the presentation slides below:
 |
| Order Book For 2016 and 2017 |
 |
| Industry Outlook |
 |
| Potential Projects |
The Value Stock Scorecard
Price: $0.385 (as at 28 Sep 2015)
Net Current Asset Per Share: $0.299 (-28.55%)
% Cash of Price: 62.51%
% Cash of Current Asset: 65.91%
Cash/Debt: 506.687 times
Discounted Net Asset Value: $0.316 (-21.69%)
Price to Sales: 1.429
Earning Yield: 11.59%
Dividend Yield: 20.78% (FY2015 Dividend has increased till 8 cents but not deem as special).
Debt to Equity: 0.13%
Profit Margin over 10 years: Able to improve/maintain profit margin at more than 15% despite lower Revenue.
10 year average PE: 9.12.
10 years Average ROE: 20.63%
10 years Average ROA: 11.54%
Value Stock: Yes – 9/14
Why So Good?
Great Profit Margin, ROA, ROE - The ability to generate great returns despite having lower revenue and within a difficult environment.
Order Book for 2016/2017 fulfilled - With the order book has been fulfilled for 2016 & 2017, revenue should be "saved". The question is if the management is able to maintain the Profit Margin. However, over the last few years, the company has managed to improved the profit margin since it was listed. Thus, without any change in the management team, I deem the ability to continue to maintain the profit margin to be unchange as well.
Further Potential Projects - As the Singapore Government will continue to improve the country's infrastructure and also to "save" the GDP, the company's track record will put them in the lead to get these projects as well.
Why So Bad?
Dormitory Business will end in 2017 - A big chuck of the revenue will be gone in 2017 as the lease expires. This has been a Cash Cow for the company since it was leased. Other than its main business, the company will need to find other avenues to earn more passive income.
In Short
Current net asset value is already more than 20% below the current share price. After 2017, profit margin may also fall and the quarterly result in 2016 will be a major indication of how the company will move in. With the above factors taken into account, TTJ Holdings Ltd seem to be near to the fair value now (I believe the price should be slightly more than 40cents in view that it is still deem as a value stock), unless the bumper dividend of 8 cents in 2015 will continue till 2016 or the management managed to secured another passive income avenue.
Please do your own due diligence before you invest in this stock.
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