Company Review: ComfortDelgro (CPF)

ComfortDelgro is formed with the merger of Comfort and Delgro in 2003.  The company has stated upon merging, that the group aims to achieve 50% of its revenue from overseas operation within 5 to 7 years after merging and based on 2006 Annual Report, the company is well on its way.  The company has become the second largest land transport operator in 2006 with footprints in China, Australia, UK, Ireland, Vietnam and Malaysia.  Locally, the company owns SBSTransit, VICOM and Comfort Taxi fleets.  In 2006, the company has finally made a gain in NEL which will continue to do well with the North East getting more populated.  One major concern for the company is the volatile high oil price which has a negative financial impact on the company.  The group has coped with this problem quite well, continue to achieve reasonable growth in earning.

The group has a net profit margin of about 8% to 10% and ROE of about 13%.  The company has a generous dividend policy which pays out approximately 50% of its net earning.  Based on what I have read, Chairman Lim Jit Poh appears to be a detailed person with strong belief in his vision.

I have 5 lots of the group shares purchased at an average price of $1.538 which translates to a forward PE of about 13, cheap considering it has a market cap of about four billions.  At my purchased price, my dividend yield stands at approximately 5.8%.   I will continue to hold on to my shares as I am happy with its dividend and am pretty confident that the group can even be better for their 2^nd 5 years.

20071H Results

The company has posted a credible first half result with 8% and 10% growth in revenue and net profit respectively.  Oil price remains a major concern but I am sure the group has the capability to cope with it.

Financial Info Analysis Pte Ltd - Shareowl

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A new investment website which I discovered this year that gives a new perspective in investing.

Investing in Singapore small-cap stocks and fine French wines

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Company Review: Kingsmen Creatives

As a one-stop design, production and logistics center, Kingsmen tops as a leading communications design and production entity in the Asia Pacific region. Providing clients with integrated solutions in Exhibitions & Museums, Retail & Office Interiors, Research & Design and Integrated Marketing Communications, Kingsmen is the epitome of a reliable global marketing communications firm.

Listed on SESDAQ in 2003, the company was affected by SARS in 2004.  However, since then, the company has posted a CAGR of 30% in earning over the past 3 years.  Net profit margin has improved from a low of 2% in 2004 to 5.9% in 20071H with its average ROE around 20%.  The company has a net cash position and insiders hold about 25% of the total shares.

I was attracted to the company due to the big name clients that it served such as Adidas, Chanel, Hour Glass, Esprit, Nokia, DFS, DBS/POSB, FJ Benjamin and others.  This is an impressive list of clients and having seen some of the interior designs, I am impressed by their works.  One concern that I have is its low net profit margin, hopefully it can be better with new production facilities in Malaysia.  With its expansion plan on track, it is expected the company would grow further this year.

I was lucky to come across this company in Dec. 2006 and purchased 15 lots at a price of $0.22 (at an amazing low historical PE of 4.5).  The market has recognized the potential of this micro cap over the year and its price has more than double over the past 9 months.  I will continue to hold on to my 15 lots as long as the company continues to perform well.

20071H Results

The company has posted a good first half results in August with its bottom line improves by 65%.  It is expected that company to continue to do well in the second half of 2007 which traditionally contributes a higher percentage to company’s revenue and profit.