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Tuan Sing - severely undervalued?



Is Tuan Sing overly discounted?

At at a price to NAV of just 0.445, investors are paying 41 cents to own a share having a net asset value of $0.9217.






How does this compare with other property developers?
Price
NAV
Price/NAV
Tuan Sing
0.41
0.9217
0.444830205
Frasers Property
1.77
2.566
0.689789556
Capitaland
3.5
4.5395
0.771010023
Citi Dev
9.07
11.07
0.819331527


Clearly Tuan Sing is a bit more undervalued compared to its peers.


What about its level of debt?
Debt/ Ebidta
Tuan Sing
34.48
Frasers Property
12.529
Capitaland
10.301
Citi Dev
5.381


 However, Tuan Sing seems to have a very high level of debt relative to its peers.

One reason for its comparatively higher debt/EBITA ratio may be due to the fact its investment properties (e.g., R18) have not begun to contribute rental income to the company.

What about its dividend yield ?

Tuan Sing is miserly in this regard, preferring to retain cash and strengthen its balance sheet. Which is probably not a bad choice, given that its cash flow to interest coverage ratio is not the greatest.

Tuan Sing fares badly in this regard, having a yield of only 1.5% compared to Frasers Property, which is hovering around a 5% yield, and Capitaland (around 3.5%). 


What I like about Tuan Sing

Freehold Grade A office assets.
Recurring income from investment properties - so it is not a pure build and sell play.
Low price to book ratio.



What I don't like about Tuan Sing 

Relatively high debt levels and low interest coverage from operating cash flow.
Stingy dividend yield.




DYODD.Onward to FI my brethren. 

Comments

  1. AnonymousMarch 23, 2019 at 5:46 PM

    Tuan Sing's true value is not even reflected in its NAV, given that many are prime freehold properties, like Robinson Road, Melbourne CBD, Bukit Timah. It would like the RNAV is Northwards of $1.20 or higher.

    ReplyDelete

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