Quick review of 3 stocks’ fundamental situations and Your stock vote!

Quick review of 3 stocks’ fundamental situations and Your stock vote!

This column is jointly written by @fayewang and @calvinwee.

interact-with-our-analyst-by-voting-3

Faye is both a fundamental analyst and economist by nature. She is a global thinker who’s open-minded and enjoys learning. Calvin is a fundamental analyst at heart and an ardent disciple of value investing. He relishes the process of searching for undervalued stocks and enjoys collecting dividends from his stocks.

If you like this column, please start voting which of these 3 stocks you would like them to write on in their next article! This is your chance to interact with them and they will write on the most voted stock of your choice!

How to vote: Comment the stock of your choice: either GuocoLand, ST Engineering or 800 Super. The most number of likes/comments by the end of the day will be chosen. It’s that simple!

Voting starts now and ends when the market’s close on today (5 May) at market’s close (5pm)!

Disclaimer: this article simply provided analysis on stocks from the fundamental perspective, it does not represent any buy/sell recommendation from Investingnote. *All the dollar unit ($) in this article refer to SGD.
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1. $GuocoLand(F17)

guocoland

a. Brief introduction
As a brief review, GuocoLand Limited is an investment holding company based in Singapore. The principal activities of the Company and its subsidiaries include investment holding; property development and investment; hotel operations, and provision of management, property management, marketing and maintenance services.

b. Company Structure

coy-structure
Data source: GuocoLand official website, https://www.guocoland.com.sg/corp_str.shtml
GuocoLand in this article refers to the GuocoLand limited that listed in Singapore exchange and owned by Hong Leong Group. GuocoLand targets the upmarket residential developments and competes with distinguished quality.

c. Overall Performance

guoco-overall-perform

Data source: GuocoLand financial reports, refer to all the reports at https://www.guocoland.com.sg/fin_fs.shtml
From the chart, it is obvious that GuocoLand suffered from decreased revenue since 2014. It is interesting that net profit surged from $216.452m in 2015 to $588.425m. However, this is mainly due to the $560.94m gain on disposal of interests in subsidiaries. In other words, the amount of net profit would has dropped without the disposal gain.

d. Segments Break Down
It has five segments based on geographic categories including:
GuocoLand Singapore, 2) GuocoLand China, 3) GuocoLand Malaysia, 4) GuocoLand Vietnam and Others.

Since the amount of revenue of others segment is negligible when compared to other segments, data of this part is combined with the Vietnam segment.

Based on data of financial year 2016, Singapore is the degment that contributed the greatest portion (61.46%) of operating revenue of GuocoLand. China segment took the second largest position in the business, which occupied 25.7% of the total revenue. Guoco Singapore and Guoco China jointly contributed 86% of GuocoLand’s income. Thus, the deteriorated performance of both Singapore and China market resulted in the downtrend of GuocoLand’s revenue since 2014.

guoco-segment

guoco-segment-2

Segment highlight – Singapore:
In 2014, the Singapore carried several rounds of cooling measure, which severely affect the sales of the upmarket condo. Sales in the core central region (CCR) suffered shrinkage of 300% on a yoy base, the drop in outside central region (OCR) also reach the number of 156%. (Refer to different region in Singapore at https://www.mingproperty.sg/region-map-sin… ). However, GuocoLand managed to achieve 84.7% growth in revenue and 665.57% growth in net profit, which is mainly driven by GuocoLand’s project of Goodwood Residence in Singapore and Seasons Park in Tianjin, China.

In 2015, with the continuous cooling measure and further price correction, the property investment sales crash to six-year low, and GuocoLand observed a drop of 7% in revenue, but the firm held a strong portfolio that includes tanjong Pagar Centre, Goodwood Residence in the orchard Scotts area and Leedon Residence.
In 2016, the property price decline further with higher volatility in the industry, sales of private residential house decreased 16% on a yoy base at the beginning of the year, and reached the lowest number in January since 2009. Under the unfavourable market situation, GuocoLand has witnessed 8.63% drop in revenue, but net profit was more than doubled because of the disposal gain. However, GuocoLand gained 142.6% growth in cash flow from operating activities and generated $2229.7m net cash from the disposal of interests in subsidiaries, which made the firm abundant with cash for further expansion or projects.

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