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Valuation charts of 6 companies

Questions › Category: Valuation Quadrant › Valuation charts of 6 companies
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Zeniv Kwang asked 6 months ago

Hi Victor,
I have sent the excel files for valuation charts and corresponding intrinsic value of 6 companies to your email. Please help to check if they are correct.
If the charts are correct, Q&M Dental and iFAST appears undervalued and would be possible buys?
 
Q&M Dental has dividend yield ard 6.4%, i think the business fundamental should be quite good, looks like attractive buy.
 
As for iFAST, the dividend yield only 1%, current price only slightly undervalued, maybe should have higher margin of safety before buying?
 
Your comments please.
 
Thanks and regards
Zeniv

2 Answers
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Victor Chng answered 6 months ago

Hi Zeniv,
 
Your charts are correct some of them:
 
Raffles Medical – They have a history of share split, so you have to adjust the earnings per share
Boustead Singapore – The company is a conglomerate; hence it is tricky to use PE valuation. You have to do a sum of the parts valuation. 
Haw Par – The company is an asset-based company, PB is more suitable. 
Q&M – Same as Raffles Medical, have a share split history. So you need to adjust the EPS.
 
As we are not allowed to give recommendations to buy/sell due to MAS regulation. You may want to share your analysis of Q&M and iFast here so that I can give you some of my insights. 

Zeniv Kwang replied 6 months ago

Hi Victor,

Thank you for your pointers on my valuation charts. I have re-done 3 of them and sent to your email based on your feedback. Please help to check, thanks.

For Q&M, i think the business fundamentals are good, and management team is decent (founder holds significant stake in company and still running the company), and financials looking good. At current share price which is quite significantly below my intrinsic value calculated, I would think it is attractive buy.

For iFast, i think it fits the characteristics of a simple, asset light business model, with high recurring revenues. I believe it is highly scalable too. Financials is good also: i.e. revenue for the 2Q2022 rose 4.7% year on year to S$53.2 million, although there is net loss of 2.7 million for this quarter due to increasing expenses and some impairment loss. Despite the loss, free cash flow stayed healthy for 2Q2022 at S$5.2 million while 1H2022 saw free cash flow of S$6.6 million But for valuation, based on my calculated intrinsic value of $5.17, current share price is $4.08, so it is undervalued, but not too significantly undervalued, so I am thinking of waiting for higher margin of safety, share price to drop further before buying.

For your thoughts/insights please.

Thanks and regards
Zeniv

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Victor Chng answered 6 months ago

Hi Zeniv,

The charts are correct.

Please see below questions regarding Q&M and iFast:

Q&M Dental

  • How has the company been growing their profits since IPO? is it organic or non-organic?
  • What is the reason that justifies that the company is fundamentally good?
  • What is the reason that you feel that the management is decent other than holding significant stakes?

iFast

  • What is the reason for the spike in 2020 profits? is it sustainable?
  • Why has the revenue slowed down in 2Q2022?