Fundamental Data for SIA Engineering | Investment Moats Skip to Content

Fundamental Data for SIA Engineering

This is not an analysis but in my verification of SIA vs SIA Engineering I compiled this data. This is for anyone who are interested in it.

This is a past 10 year data for SIA Engineering

(Click to show larger image)

A few conclusions I gathered from this data:

  1. Very consistent net income
  2. Very consistent operating cashflow
  3. Free Cashflow is positive for all 10 years
  4. Capex have not rise in 10 years!
  5. Zero debts
  6. Net and Gross Profit margins constant for the whole 10 years
  7. Take a look at {Other + FCF} that is how much cash is generated by business and joint ventures. It is positive for all 10 years
  8. The most intriguing: the highest {Other + FCF} reached was in 2010 at 225 mil. That against a market cap of $4784 mil is 4.7%. Inverting it gives you a Mkt Cap over cashflow of 21 times.

Would you pay $4.41 for a rising 4.7% yield at 20 times?

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Drizzt

Monday 7th of February 2011

Hi Dnhh, happy chinese new year to you.

Firstly why we are basing on 225 mil is because we expect that this is a rising segment that drives net profits and cashflow.

you would have noticed that in the previous article on SIA i use average more but that is because SIA does not have consistent cashflow.

on your last statement, yes it is quite true it has beensome time since i visited that. but my take is that these figures are already accounted under either net profit or increase in long term short term assets.

ultimately my take is: current yield is 4.7%. you buy now you are really buying because

1) its got a cast iron wide moat 2) its got no debt risk 3) its very defensive vs down turn 4) most of all, its yield will grow at least 10% for the next 10 years.

else its a very expensive deal.

donmihaihai

Monday 7th of February 2011

From your data, if I use 10 years average it become 33X.

Other investing CF mainly from dividends received which by itself lumpy. Check out on dividend payment by SIA Engineering over 10 years say lumpy as well.

Under what situation would someone use the most bullish number of 225 mil?

From you data I can see one consistent item which is reducing operating margin.

Be careful when looking at Net profit or net profit margin of SIA Engineering or any group company with significant JV and/or associate companies. Standard sccounting rule make margin move upward as is the case for SIA Engineering. One way to look at the data is to seperate them out.

And don't look too much into other investing cashflow higher than income contributed by associate and JV in income statement without understand what is equity accounting. Or I should just say, money doesn't rain from sky.

Willy

Monday 7th of February 2011

Thanks for the informative post again..

I think I need to relook at my corporate finance text-book again to make more sense of the number again. :)

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