Value Investment on Singapore Stock Exchange - Valuation Report of Genting International PLC
Evaluated on 06-Jan-2007 and I am currently not invested in this company.
About the company:
- Core Business: Operating Integrated Resorts (including casinos, of course)
- Date of Listing: Dec-2005
- What I like about this company: Firstly, it is cash-rich with little outstanding debt, imaginable I guess, since it is running casino operations. It has got diversified operations in Europe, Asia Pacific and Malaysia.
- What I do not like about this company: Since it was only listed in Dec-2005, the simulated EPS over last 5 years has been increasing from $0.002 to $0.006 (minus once-off type of gains). Also, there was a recorded once-off investment gain of 82.5mil in 3Q05 and an investment lost of 27.6mil in 3Q06. Personally, I do not like the volatility.
- Competitive advantage (if any): Well, being only 1 of the 2 casino operators in Singapore, do you consider it to be a competitive advantage? Development of the Marina IR is set to begin in 2007 and end in 2009. The IR is targeted to start operation in 2010.
- Earning Per Share: $0.004 (projected, base on Sep-06 financial report)
- PE ratio : 210.2
- Operating Profit: 0.208%
- Return on Equity Ratio: 1.36
- Current Ratio: 10.124
- Debt/Total Equity Ratio: 0.052
- Net Tangible Assets: $0.241
- Price: $0.925 (05-Jan-07)
- Intrinsic Value: $0.26 (highly subjective)
- Price to IV: 352%
- Final word: At a 352% price to IV ratio, I would not consider it
- Genting International company website at http://www.gentinginternational.com/
- Share investment magazine, issue 296, 01/01/07 - 12/01/07
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