Base on Q2, 2009 financial report:
- PE = 5.8
- Dividend Yield = 4.3%
- NAV = $0.3438
- Net Earning = 7.8% (12% in 2008)
- Current Ratio = 3.72
- ROA = 13.6% (Base on 2008 Full Year)
- ROE = 18.5% (base on 2008 Full Year)
- Cash Flow = S$46.3Million (103% increase with reference to 2008 Full Year)
- 3 years historal high = $1.46
- Current Price = $0.31 (only 21% of 3 years high)
Intrinsic Value Calculation
- EPS Annual Growth = 12% (from 2004A to 2009F)
- Discount Rate = 5%
- Intrinsic Value = $0.73 (58% Discount of Current Price to Intrinsic Value)
Genting Singapore is getting very speculative recently as everyone is putting very high hope on Integrated Resorts and Casino. However, I am staying out of this stocks due to the following reasons:
(1) There is no fundamental to support the increase in the stock price. The company has been losing money for the past two year and expected to continue to make a loss this year.
(2) All future earnings of the company base on numerous assumptions. There are assumptions that the economy will recover as per plan, tourism will pick up in Singapore, the IR will be launched on time and have no delay, all revenues and profit are base on projection, etc. For those who have involved in drafting a business plan and doing a sales projection will know that everyone want to make the plan looks GREAT in front of the management and analysts, otherwise we will be challenged if the numbers do not meet the expectation. Very soon everyone will start to realise that the reality is very far away from plan, and the stock price will plunge!
(3) Looking at the chart, the stock price climbs too fast and become a parabolic curve. This parabolic curve happened before in Dec 2007 where the stock price went up 175% in one month. Then the stock price crashed 40% back to $0.75 within two months. History always repeat itself, now the similar parabolic curve is seen again. The price has gone up 70% in two months (remember: WITHOUT any fundamental), we can predict what is going to happen next. In addition, there are many speculative professional traders in the game. Unless we as retail investors know what we are doing, it is better to stay out of this counter.