GSH Corp. Ltd. – Value Analysis (SINGAPORE:BDX) : August 25, 2017

Capitalcube gives GSH Corp. Ltd. a score of 56.

Our analysis is based on comparing GSH Corp. Ltd. with the following peers – TT International Limited, Alpha Energy Holdings Limited, Epicentre Holdings Limited and Challenger Technologies Limited (T09-SG, 5TS-SG, 5MQ-SG and 573-SG).

Investment Outlook

GSH Corp. Ltd. has a fundamental score of 56 and has a relative valuation of OVERVALUED.

Fundamental Score

Access our research and ratings on GSH Corp. Ltd.

Company Overview

  • Compared to peers, relative outperformance over the last year has faded more recently.
  • It’s current Price/Book of 2.18 is about median in its peer group.
  • BDX-SG‘s operating performance is relatively good compared to its peers. The market currently does not expect high earnings growth relative to its peers but seems to expect the company to maintain its relatively high rates of return.
  • BDX-SG‘s relatively high profit margins are burdened by relative asset inefficiency.
  • Compared with its chosen peers, the company’s annual revenues and earnings change at a slower rate, implying a lack of strategic focus and/or lack of execution success.
  • BDX-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.
  • While BDX-SG‘s revenues growth has been below the peer median in the last few years, the market still gives the stock a P/E ratio that is around peer median and seems to see the company as a long-term strategic bet.
  • The company is likely overinvesting in a business with only median returns.
  • BDX-SG‘s operating performance may not allow it to raise additional debt.

Access our research and ratings on GSH Corp. Ltd.

Leverage & Liquidity

BDX-SG would seem to have a hard time raising additional debt.

  • With debt at 23.90% of its enterprise value compared to an overall benchmark of 25% (Note: The peer median is currently 34.67%), and relatively tight interest coverage level of 0.50x, BDX-SG would have a hard time raising much additional debt.
  • Of the 4 chosen peers for the company, only 3 of the stocks have an outstanding debt balance. Companies with no debt include 573-SG.

BDX-SG has moved to a relatively low liquidity from a Limited Flexibility profile at the recent year-end.

  • BDX-SG‘s interest coverage is greater than (but within one standard deviation of) its five-year average interest coverage of -5.21x.
  • Compared to 2016, interest coverage has remained relatively stable for both the company (0.50x) and the peer median (-0.49x).
  • BDX-SG‘s debt-EV continues to trend downward and is below (but within one standard deviation of) its five-year average debt-EV of 48.01%.
  • The decrease in its debt-EV to 23.90% from 53.36% (in 2016) was also accompanied by a decrease in its peer median during this period to 34.67% from 52.68%.
  • Relative to peers, debt-EV fell 11.45 percentage points (and is now lower than its peer median). Unlike the peer median, it is also below the 25% leverage benchmark.

Access the detailed analysis for GSH Corp. Ltd.

Key Liquidity Items

Company Debt/Enterprise Value (%) Current Ratio Interest Coverage (x) Cash Flow To Total Debt (%)
TT International Limited 83.91 0.24 -1.48 -3.14
Alpha Energy Holdings Limited 52.68 0.09 0 -19.63
Epicentre Holdings Limited 34.67 1.26 -11.13 -52.98
Challenger Technologies Limited 0 3.67 No interest exp 999
GSH Corporation Limited 23.9 4.17 0.5 -1
Peer Median 34.67 1.26 -0.49 -3.14
Best In Class 23.9 4.17 No interest exp 999

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Company Profile

GSH Corp. Ltd. engages in the hospitality, property development, and trading and distribution businesses. It operates through Hospitality and Property Development segments. The Hospitality segment engages in the operation of hotels, golf and marina clubs. The Property Development segment engages in the sale of properties and rental income from investment properties. The company was founded on September 18, 2001 and is headquartered in Singapore.

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