First Resources Ltd. (Singapore) – Value Analysis (SINGAPORE:EB5) : December 26, 2017

Capitalcube gives First Resources Ltd. (Singapore) a score of 75.

Our analysis is based on comparing First Resources Ltd. (Singapore) with the following peers – Global Palm Resources Holdings Limited, Bumitama Agri Ltd., Golden Agri-Resources Ltd and Kencana Agri Limited (BLW-SG, P8Z-SG, E5H-SG and BNE-SG).

Investment Outlook

First Resources Ltd. (Singapore) has a fundamental score of 75 and has a relative valuation of OVERVALUED.

Fundamental Score

Access our research and ratings on First Resources Ltd. (Singapore)

Company Overview

  • EB5-SG has traded publicly for a relatively short period.
  • It currently trades at a Price/Book ratio of (2.24).
  • The market expects EB5-SG to grow at about the same rate as the peers and to maintain the median returns it currently generates.
  • EB5-SG‘s relatively high profit margins are burdened by relative asset inefficiency.
  • Changes in annual revenues (relative to peers) are better than the change in its earnings (relative to peers), implying the company is focused more on revenues.
  • EB5-SG‘s return on assets currently and over the past five years suggest that its relatively high operating returns are sustainable.
  • The company’s relatively high gross and pre-tax margins suggest a differentiated product portfolio and tight control on operating costs relative to peers.
  • EB5-SG‘s revenue growth in recent years and current P/E ratio are both around their respective peer medians suggesting that historical performance and long-term growth expectations for the company are largely in sync.
  • The company’s level of capital investment seems appropriate to support the company’s growth.
  • EB5-SG has the financial and operating capacity to borrow quickly.

Access our research and ratings on First Resources Ltd. (Singapore)

Leverage & Liquidity

EB5-SG has the financial and operating capacity to borrow quickly.

  • With debt at a relatively low 19.66% of its enterprise value compared to an overall benchmark of 25% (Note: The peer median is currently 26.12%), and a well-cushioned interest coverage level of 10.87x, EB5-SG can probably borrow quickly. We classify the company as Quick & Able in terms of its capacity to raise additional debt.
  • All 4 peers for the company have an outstanding debt balance.

EB5-SG has maintained its Quick & Able profile from the recent year-end.

  • EB5-SG‘s interest coverage is upward trending and is now similar to its five-year average interest coverage of 10.91x.
  • The increase in its interest coverage to 10.87x from 7.47x (in 2016) was also accompanied by an increase in its peer median during this period to 10.87x from 6.32x.
  • Interest coverage fell 1.16 points relative to peers.
  • EB5-SG‘s debt-EV is similar to its five-year average debt-EV of 19.71%.
  • Compared to 2016, debt-EV has remained relatively stable for both the company (19.66%) and the peer median (26.12%).

Access the detailed analysis for First Resources Ltd. (Singapore)

Key Liquidity Items

Company Debt/Enterprise Value (%) Current Ratio Interest Coverage (x) Cash Flow To Total Debt (%)
Global Palm Resources Holdings Limited 0.1 7.02 3512.45 29639.04
Bumitama Agri Ltd. 26.12 1.09 13.59 45.12
Golden Agri-Resources Ltd 48.88 1.03 1.97 17.65
Kencana Agri Limited 85.13 0.87 1.38 5.62
First Resources Ltd. (Singapore) 19.66 2.15 10.87 48.7
Peer Median 26.12 1.09 10.87 45.12
Best In Class 0.1 7.02 3512.45 29639.04

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Company Profile

First Resources Ltd. is an investment holding company, which engages in general trading, cultivation of oil palms, harvesting of fruits, and processing them into crude palm oil and palm kernel. It operates through the Plantation and Palm Oil Mills; and Refinery and Processing business segments. The Plantations and Palm Oil Mills segment focuses on the cultivation and maintenance of oil palm plantations and operation of palm oil mills. The Refinery and Processing segment deals with the marketing and sale of processed palm based products produced from the refinery, fractionation and biodiesel plants, and other downstream processing facilities. The company was founded in 1992 and is headquartered in Singapore.

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