The investable Net cash company MUST have possess condition precedent such as consistent deliver POSITIVE EPS from CORE business, valuation PE <10x and consistent dividend payout to shareholder.
Dutaland, despite is net cash position due to disposal its palm oil, but it only promse to give 5 sen for 2 year to shareholder as special dividend. Dutaland have loss of core business, it need to conserve cash to buy NEW CORE business before can generate consistent profit
$HOMERIZ - Spring Art IPO oversubscribed by 14.7 times @acabks @takanoamin @fishfire
I believe this is a good news to HOMERIZ. Spring Art is another furniture company that's going listing soon, and it's valued at 13.5x PE. Its IPO being oversubscribed 14x confirms that the market is accepting its valuation.
I went to Spring Art roadshow, and personally met the owner and the CFO. I really like them, everything is about money, profit and margin. The company is running at full capacity and have order demand that they cannot meet. It's slightly different business model than other furniture companies in that it's RTA model (ready to assemble), similar to IKEA and not fully made furnitures, but in essence, it's still selling and exporting furniture components.
In comparing the 2 companies, it's very visible the valuation disparity. If the market accepts 13.5x valuation of Spring Art, then Homeritz, a company with similar profit margin (13-15%), ZERO debt, much more CASH rich and CAPACITY to expand, should be valued at the very least similar to that number, and not merely PE 10x (PE 6.5x ex cash) that they're trading at the moment.
Hopefully the market understand this and react in an efficient way.
ruby20, this is less convincing to compare Homeriz and Spring Art as they are selling different products. This is better to use Heveaboard to compare with Spring Art as both also producing RTA products to overseas.
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....
angkokann
705 posts
Posted by angkokann > 2019-10-30 11:32 | Report Abuse
will buy more if 55