On Bonvest
I mentioned that during this correction, some of these stocks that you like have come down to rather reasonable valuations. Bonvest could be one of them.
I do like Bonvest when it is below $1, much because of its diversified business of Food,Industrial, Hotel and Property. A check shows that the last quarter has edge decent revenues and profits.
The more important question is whether, like most of the property shares, they are correcting from absurd valuations. Capitaland, Wingtai, Wheelock are some of the companies that have come down alot. That seems to mirror what Albert Lam from IPP Financials said in the talk I attended yesterday that the smart money is moving to the lower and higher end residential property as the mid range one is getting absurd pricing.
Anyway here is a look at some Fundamentals:
- A return on investment of 11%
- Based on last annual operating profit after tax, its current cashflow value is 94% of current share price of $1.00
- discount this cashflow to perpetually and its value is 134% of current share price value
- Last profit margin is 12%
- Operating Cashflow / Enterprise Value is 16%
- Operating Cashflow / Mkt Cap is 17%
- Price to book is 0.71 times
- Debt is 8% of Assets
The majority of the revenue streams comes from its property and hotel arm and a large part of recent outperformance is attributed to the property sector.
I apologise as there is an amendment to the figures. The profit from operations was wrong when i used it. The revised figure is that current performance is 94% of share price and return premium is 134%.
This is about inline with the past 8 years average.
The last 8 years of operating cashflow generated from business is on average 47 million, so current stock price is pretty close to there.Capital expenditure on average is 11 million. We are looking at a net free cashflow of 36 million here.
As a dividend investor, based on that average, it can pay out 8% based on current market cap without putting it in a bad state.
I believe, that if it goes down further, it will only be a plus. Very interested now.
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