Bukit Sembawang Analysis

What it does

1. Residential Property Development
2. UK Rubber Plantation

Financials

Why buy?
1. Income
     a. Revenue has been on long term upward trend.
 
(Total revenue of Bukit Sembawang for 5 years starting from 2008 on the right)

     b. Net income as been on consistent and strong upward trend.

(Net income of Bukit Sembawang for 5 years starting from 2008 on the right)

2. Assets
     a. Long term debt on 5-year downtrend. Currently, very low compared to equity.


Why not?
1. nil

Environmentals

Bukit Sembawang was able to benefit from the strong surge in property prices, hence allowing its income to grow so much, so fast. Given the current housing prices outlook, there is much uncertainty in whether housing prices can continue to climb. The growth and performance of Bukit Sembawang is largely dependent on the rate of increase of property prices, hence one has to be cautious when entering such an industry at this state.

Technicals

1. Looking at the 10-year chart (below), we can see that prices have hit a strong resistance at or about $6-7. There is definitely a large upside to current prices now. However, prices have already moved past the moving averages and has experienced significant capital appreciation.

Final Verdict

It is with no doubt that Bukit Sembawang has rock solid balanced sheets. Its income fluctuates based on property prices which is a concern at this point in time. However, this company seems to have strong management competencies which have shown to be able to stay profitable through the worst crisis (2008). With good divident yield and reasonable prices, Bukit Sembawang might be something worth betting on.