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CityFarmer, thanks for the analysis. Do you get uncomfortable with PB of 7? I am vested in one counter whose PB is also around 7 - OSIM, but the cash pile coming in is very high; but even then, I am a little nervous with my holdings. One argument that "it's OK" is that if a business does not require high CAPEX to sustain his earnings (this is in fact a good attribute) and is generating very high rates of FCFs, then sooner or later its price will follow increased earnings, upwards, thus leading to high PB ratio. But my intuition tells me to be careful. What is your view on this subject? I'm still a novice in this game.
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these companies are valued at how consistent and how recurrent are these consistent free cash flow. if they are very predictable then you have a safe way of valuing them.
you just throw every kitchen sink at what could kill this cash flow stream. if you can buy a stream of cash flow after adjusting to all these kitchen sink thrown at it, you may have an undervalue gem.
why use book value on a company that doesnt keep its earnings, pay it out and have an asset light, capex light model.
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(08-05-2014, 11:25 PM)sykn Wrote: CityFarmer, thanks for the analysis. Do you get uncomfortable with PB of 7? I am vested in one counter whose PB is also around 7 - OSIM, but the cash pile coming in is very high; but even then, I am a little nervous with my holdings. One argument that "it's OK" is that if a business does not require high CAPEX to sustain his earnings (this is in fact a good attribute) and is generating very high rates of FCFs, then sooner or later its price will follow increased earnings, upwards, thus leading to high PB ratio. But my intuition tells me to be careful. What is your view on this subject? I'm still a novice in this game.
IMO, valuation with PB ratio for service base companies, is misleading. Service companies normally are asset-light. PE seems a better ratio for benchmarking, after all necessary adjustments.
I agree with Drizzt's view. The recurring of their cash generation, is much more important from the assets owned.
(not vested)
“夏则资皮，冬则资纱，旱则资船，水则资车” - 范蠡
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The revenue up, but net profit down. Will the margin erosion sustain? Let's see...
(not vested)
Neo Group posts 10.7% fall in earnings to $2.5 mil for 1H
Neo Group, the food catering group in Singapore, reported it has achieved earnings of $2.5 million for the six months ended July 2014 (6M2015).
Revenue was lifted 21.2% to $28 million by an increase in sales for the Food Catering Business and Food Retail Business, up from $23.1 million for the six months ended July 2013 (6M2014).
Food Catering business grew by 17.3% or $3 million mainly due to an increase in social catering events and an increase in market share for corporate and government sectors in 6M2015. With higher delivery sales and the commencement of new outlets, our Food Retail business also did well, growing 29.9%. Overall, revenue increased 21.2% to $28 million in 6M2015.
Net profit in 6M2015 was $2.5 million as compared to $2.8 million in 6M2014 mainly due to the bottomline not capturing the full length of Chinese New Year season in the period as well as an increase in sales team and in advertising to drive business growth.
Based on its latest set of results, the group achieved Earnings per Share (EPS) of 1.75 cents per share and Net Asset Value (NAV) per share of 14.2 cents as at 31 July 2014. Both EPS and NAV are based on 144 million ordinary shares in issue during the period.
In line with the group’s commitment to recommend and distribute dividends of not less than 60% of its earnings in each of FY2013 and FY2014, the directors have proposed a tax-exempt interim dividend of 1.05 cent per share for 6M2015.
http://www.theedgesingapore.com/the-dail...r-1h-.html
“夏则资皮，冬则资纱，旱则资船，水则资车” - 范蠡
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F&B is a tough high capex business with rapidly changing taste buds - so far only proven model seems to be fast foods
http://www.businesstimes.com.sg/premium/...2-20140911
NEO Group's net profit for the six months ended July fell 9.1 per cent from S$2.8 million to S$2.5 million.
The food catering group said this was due mainly to the bottom line not capturing the full length of the Chinese New Year season in the period, as well as an increase in sales team and advertising costs to drive business growth.
Neo Group announced the change of its financial year from Jan 31 to March 31 in May this year. The current financial year will thus cover a period of 14 months, from Feb 1, 2014, to March 31, 2015.
Meanwhile, revenue climbed 21.2 per cent from S$23.1 million to S$28 million, boosted by an increase in sales for the food catering business and food retail business.
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11-09-2014, 09:53 AM
(This post was last modified: 11-09-2014, 09:56 AM by yenyenpark.)
i wonder what is this.. "bottom line not capturing the full length of the Chinese New Year season"..
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Just manage to dig deeper into the report. The business isn't as bad as reported.
The GPM increased to more than 70%. It is a good GPM even for a service base business. It is definitely not a capital-intensive business.
The NPM suffered, ended with about 9%, with increased expenses. The top 3 culprits were staff, depreciation and rental.
The expenses aligned with current market condition, and the acquisition of properties by company in FY14
With an asset turnover of more than 1, the ROA still at a commendable >10%
(not vested, but monitoring)
(11-09-2014, 06:40 AM)greengiraffe Wrote: F&B is a tough high capex business with rapidly changing taste buds - so far only proven model seems to be fast foods
http://www.businesstimes.com.sg/premium/...2-20140911
NEO Group's net profit for the six months ended July fell 9.1 per cent from S$2.8 million to S$2.5 million.
The food catering group said this was due mainly to the bottom line not capturing the full length of the Chinese New Year season in the period, as well as an increase in sales team and advertising costs to drive business growth.
Neo Group announced the change of its financial year from Jan 31 to March 31 in May this year. The current financial year will thus cover a period of 14 months, from Feb 1, 2014, to March 31, 2015.
Meanwhile, revenue climbed 21.2 per cent from S$23.1 million to S$28 million, boosted by an increase in sales for the food catering business and food retail business.
“夏则资皮，冬则资纱，旱则资船，水则资车” - 范蠡
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The fools take away on the analyst briefing yesterday.
(not vested)
http://www.fool.sg/2014/09/11/heres-what...e-growth/
Time to roll!!!
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The company product variety continue to expand...
(not vested)
Neo Group launches three more brands
SINGAPORE (Nov 19) Neo Group ( Financial Dashboard), the food catering group in Singapore, say it has introduced another three new brands to capture a wider market segment.
Opened today, LJJ Café is a 60’s inspired eatery that is located at the neighbourhood shop house at Circuit Road. The cafe serves traditional local favourites such as kaya butter toast, curry chicken, mee siam, laksa as well as local savoury and sweet kuehs.
Neo Group also announced it has also acquired two other brands – Choz and Fu Yuan. Choz Confectionery, which joined the group on Nov 3, will offer confectionery for traditional Chinese wedding packages, full-month celebration cakes and an assortment of biscuits.
Fu Yuan offers assorted nonya kuehs and traditional hand-made snacks for every occasion, from ang ku kuehs to kueh lapis sagu to tapioca kuehs that are freshly made daily.
Neo Group closed unchanged at 86 cents today.
http://www.theedgemarkets.com/sg/article...ore-brands
“夏则资皮，冬则资纱，旱则资船，水则资车” - 范蠡
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