Value Investment on Singapore Stock Exchange - Valuation Report of Singapore Exchange (revised on 28-Jan-2007)
As correctly pointed out by 3 blog readers (thanks folks!), the original post contains several data errors. Thus this posting is revised (original values in red, revised values in blue) to reflect a more accurate valuation. After correcting the data errors, the final word and conclusion is the same as the previous stand.
Evaluated on 25-Jan-2007 and I am currently not invested in this company.
About the company:
- Core Business: SGX owns and operates the only integrated securities exchange and derivatives exchange in Singapore and their related clearing houses.
- Date of Listing: Nov-2000
- What I like about this company: Its has monopoly over the singapore exchange! It is also diversifying its revenue sources, in terms of product types and geographical areas.
- What I do not like about this company: My personal opinion is that the current market is rallying, without much fundamental reasons. Thus, I am quite worried about when the next downturn will come about.
- Competitive advantage (if any): Of course! It is the only 'player' locally!
Valuation Statistics (base on 1H07 financial report)
- Earning Per Share: $.021 (projected, excl once-off gains) (correct value is $0.21)
- Price/Earnings ratio : 63.80 (annualized value is 32.14)
- Operating Profit: 58.6%
- Return on Equity Ratio: 38.9 (annualized)
- Current Ratio: 0.31 (correct value should be 1.68)
- Debt/Total Equity Ratio: 0.39 (correct value should be 0.78)
- Net Tangible Assets: $0.452 (correct value should be $0.5425)
- Price: $6.75 (25-Jan-07)
- Intrinsic Value: $0.981 (highly subjective) (revised to $1.60)
- Maximum Price I would purchase at: $0.785 (highly subjective) (revised to $1.28)
- Current Price to Max price I would buy at: 688% !!! (revised to 421%)
- Final word: At a 688% or 421% price to IV ratio, it must be one of the most pricey stock! I would defintely hesistate to purchase at this point in time.
- SGX company website at http://www.sgx.com/
- SGX Financial Statements for the Quarter Ended 31 December 2006 at http://tinyurl.com/22s9jk (pdf file)
Disclaimer: Completeness, accuracy and opinions based on information and comments mentioned via this website cannot be guaranteed. Investors should always conduct their own research before making investment decisions.