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01-10-2014, 09:58 PM
I am a little surprised that the New York based value-investing website ValueWalk.com has on 26Sep14 posted quite a detailed report on Mun Siong entitled "Mun Siong Engineering Ltd: A Compelling Valuation Story"…..
http://www.valuewalk.com/2014/09/mun-sio...ering-ltd/
In the report, the authors highlighted that as at 30Jun14, Mun Siong had a NCAV (i.e. Net Current Asset Value = Current Assets - Total Liabilities) /share of $0.071, and a Revised (i.e. including the total proceeds of and assuming the full conversion of the 166.683m warrants) NCAV/share of $0.056. The authors also provided their Fair Value estimate - again assuming full conversion of the 166.683m warrants - of the Mun Siong share at $0.09.
My own simple view is that the authors's Fair Value estimate of the Mun Siong share at $0.09 is too conservative and quite unrealistic. Just based on asset coverage and Mun Siong's latest (as at 30Jun14) NAV/share of $0.1228, the revised NAV/share (including the total proceeds of and assuming the full conversion of the 166.683m warrants) is already $0.091. And this is before considering any further business growth, any future earnings, and the recovery of Mun Siong's profitability underway as suggested by substantially higher NP in 1H ended 30Jun14.
Isn't a Fair Value including a fair premium over the revised NAV/share of $0.091 more appropriate for Mun Siong's well-established business?
http://www.valuewalk.com/2014/09/mun-sio...ering-ltd/
In the report, the authors highlighted that as at 30Jun14, Mun Siong had a NCAV (i.e. Net Current Asset Value = Current Assets - Total Liabilities) /share of $0.071, and a Revised (i.e. including the total proceeds of and assuming the full conversion of the 166.683m warrants) NCAV/share of $0.056. The authors also provided their Fair Value estimate - again assuming full conversion of the 166.683m warrants - of the Mun Siong share at $0.09.
My own simple view is that the authors's Fair Value estimate of the Mun Siong share at $0.09 is too conservative and quite unrealistic. Just based on asset coverage and Mun Siong's latest (as at 30Jun14) NAV/share of $0.1228, the revised NAV/share (including the total proceeds of and assuming the full conversion of the 166.683m warrants) is already $0.091. And this is before considering any further business growth, any future earnings, and the recovery of Mun Siong's profitability underway as suggested by substantially higher NP in 1H ended 30Jun14.
Isn't a Fair Value including a fair premium over the revised NAV/share of $0.091 more appropriate for Mun Siong's well-established business?