Lum Chang

Considerations

• 17 Feb: Announcement of Yishun mixed development valued at $487 million
• Brings total contract value to $1 billion in 2015
• director start buying back shares from Feb to Jun (after announcing contract win)
• Latest buyback price is at $0.375
• Increase of net cash from $79 million to $122 million in its 3rd Quarter Financial statements

F&N

Considerations

• Close to 5 year low (Figure 1.1)
• Strong SGD enable group to purchase goods at lower costs in Thailand and Malaysia
• Stable Vietnam economy with increase demand for dairy products. (F&N owns 11% stake in Vietnam's largest dairy producer Vinamilk)
• Myanmar brewery was valued at double the price offered by Myanma Economic Holdings.

Figure 1.1

Source: Bloomberg

Sources

• http://infopub.sgx.com/FileOpen/2Qtr-FN-HY15.ashx?App=Announcement&FileID=348596)
• http://www.financeasia.com/News/389490,fn-increases-stake-in-vinamilk.aspx 
• http://www.businesstimes.com.sg/companies-markets/fraser-neaves-myanmar-brewery-stake-worth-over-twice-the-bid-price

How to value companies

Hi everyone, in this article, i will talk about 1 method i use to value a company. The company i will be using is Falcon Energy.

Let's look at its net income for the past 4 years.

Source: SGX

The breakdown in net income in million is as shown below:

• FY2011 - 3.274 (price $0.67)
• FY2012 - 10.429 (price $0.27)
• FY2013 - (2.387) (price $0.42)
• FY2014 - 60.768 (price $0.335)

In FY2011, the net income is about 20 times less than FY2014 results and yet the the price is about 2 times lesser.

If their earnings can sustain at 60 million, their share price be valued more than $0.67. At the current market price of $0.31 is very undervalued.

This is one method you can use to value a company.

Thanks for reading everyone. :)