Stamford Land Corp. Ltd. – Value Analysis (SINGAPORE:H07) : October 6, 2017

Capitalcube gives Stamford Land Corp. Ltd. a score of 59.

Our analysis is based on comparing Stamford Land Corp. Ltd. with the following peers – Hotel Properties Limited, OUE Ltd., Bonvests Holdings Limited, HL Global Enterprises Limited, Hotel Grand Central Ltd., Banyan Tree Holdings Limited, GL Limited, JK Tyre & Industries Limited, AF Global Limited and City Developments Limited (H15-SG, LJ3-SG, B28-SG, AVX-SG, H18-SG, B58-SG, B16-SG, 530007-IN, L38-SG and C09-SG).

Investment Outlook

Stamford Land Corp. Ltd. has a fundamental score of 59 and has a relative valuation of UNDERVALUED.

Fundamental Score

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Company Overview

  • H07-SG has traded publicly for a relatively short period.
  • It’s current Price/Book of 0.85 is about median in its peer group.
  • We classify H07-SG as Harvesting because of the market’s relatively low growth expectations despite its relatively high returns.
  • H07-SG‘s median net profit margins and relatively high asset efficiency give it some operating leverage.
  • The company’s year-on-year change in revenues and earnings are better than the median among its peer group.
  • Over the last five years, H07-SG‘s return on assets has improved from median to better than the median among its peers, suggesting the company has found relative operating advantages.
  • The company’s margins are around the peer medians and do not suggest any benefit from a pricing or an operating cost advantage versus peers.
  • While H07-SG‘s revenue growth in recent years has been above the peer median, the stock’s P/E ratio is less than the peer median suggesting that the company’s earnings may be peaking and the market expects a decline in its growth expectations.
  • The company’s capital investment program suggests it is under-investing in a business that is producing peer median returns.
  • H07-SG might have enough interest coverage to take-on additional debt prudently.

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Leverage & Liquidity

H07-SG might have enough interest coverage to take-on additional debt.

  • While H07-SG‘s debt to enterprise ratio of 53.84% is on the high side compared to an overall benchmark of 25% (Note: The peer median is currently 37.63%), it also enjoys a relatively high interest coverage level of 6.62x which may give the company enough financial strength to support additional debt. Thus, the company is classified as having Some Capacity to raise more debt.
  • All 10 peers for the company have an outstanding debt balance.

H07-SG has maintained its Some Capacity profile from the recent year-end.

  • H07-SG‘s interest coverage is its highest relative to the last five years and compares to a low of 2.49x in 2013.
  • Though its interest coverage increased to 6.62x from 5.87x (in 2017), its peer median remained relatively stable during this period at 4.42x.
  • Interest coverage rose 1.14 points relative to peers.
  • H07-SG‘s debt-EV is over one standard deviation above its five-year average debt-EV of 48.94%.
  • While its debt-EV increased to 53.84% from 51.46% (in 2017), its peer median decreased during this period to 37.63% from 48.32%.
  • Relative to peers, debt-EV rose 13.06 percentage points.

Access the detailed analysis for Stamford Land Corp. Ltd.

Key Liquidity Items

Company Debt/Enterprise Value (%) Current Ratio Interest Coverage (x) Cash Flow To Total Debt (%)
Hotel Properties Limited 35.26 1.75 3.18 9.09
OUE Ltd. 61.19 1.86 2.23 3.54
Bonvests Holdings Limited 30.33 0.83 4.42 16.23
HL Global Enterprises Limited 84.14 4.24 2.09 3.3
Hotel Grand Central Ltd. 19.56 8.87 7.83 30.63
Banyan Tree Holdings Limited 57.1 2.91 0.07 0.86
GL Limited 30.21 3.47 6.89 30.58
JK Tyre & Industries Limited 66.65 1.05 0.97 9.54
AF Global Limited 28.3 1.69 5.74 20.82
City Developments Limited 37.63 3.1 9.8 14.17
Stamford Land Corporation Ltd 53.84 10.74 6.62 14.93
Peer Median 37.63 2.91 4.42 14.17
Best In Class 19.56 10.74 9.8 30.63

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Company Profile

Stamford Land Corp. Ltd. operates as an investment holding company, which engages in hotel owning and management, travel agency, trading, and property investment and development. It operates through the following business segments: Hotel Owning & Management, Property Development, Property Investment, Trading, and Others. The Hotel Owning & Management segment engages in the ownership and management of hotels. The Property Development segment develops, constructs, and trades properties. The Property Investment segment holds properties for rental income and capital appreciation. The Trading segment involves interior decoration companies and a travel agency. The Other segment includes dividend income and management fees charged to relate parties. The company was founded by Kim Swee Ow in 1935 and is headquartered in Singapore.

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