- 3 years of free cash flow is around 34 mil, current market cap is 20x of FCF.
- ROE/ROIC has improved significantly in 2015 but there is question about sustainability considered the track record of ROE sits at closer to 10%.
- To find out ROE sustainability, company needs to have moat or competitive advantage that others cannot easy replicate, i.e. process advantage, cost or consumer advantage.
- It is in my opinion that Hevea has none of the advantage. Anything Hevea does can be easily copied by competitors.
- That means paying a company for 2x book value is considered 'rich' for me. Hevea is a buy but not at this price IMO.
- News & plans such as Japan and currency advantage is 'temporary'. Temporary I mean any company can go into Japan market if they choose to and Hevea has no advantage against them. Currency doesnt matter in the determining the value of a company in the long run.
HEVEA still a very good and potential counter to keep as USD strengthen further to 4.42 with good FA. Based on TA, still is uptrend, no any counter is continue going up all the time, important is the right timing when we should stay in or out in the stock market.
This book is the result of the author's many years of experience and observation throughout his 26 years in the stockbroking industry. It was written for general public to learn to invest based on facts and not on fantasies or hearsay....
Posted by Ven Felix > 2016-01-06 23:45 | Report Abuse
Tan Kw , dumb up explanatory article .