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Wednesday, 29 March 2017

Isoteam

29/3/2017
Accumulate:
  • Attractive valuation PE 12.47 for high growth
  • Favorable macro factors - Singapore government infrastructure initiatives
  • Potential growth - expansion into Myanmar, Malaysia and other countries
Metrics
  • Last done (as of 29/3/2017): S$0.40
  • PE 12.47 (cheap for growth), PB 2.06
  • Revenue CAGR ~21%, Earnings CAGR ~25%
  • Total Debt to Equity 16.49%
  • Dividend yield 1.9%, Dividend CAGR ~10%
  • ROE 18.49%, 11.27%
Operations
  • Building maintenance and estate upgrading - Repairs & Redecoration, Addition & Alteration, complementary niche specialist services, Eco-conscious solutions
    • Industry leader with 19- year track record
  • Growing order book
Growth story
  • Singapore government initiatives - Ongoing rejuvenation of mature and middle aged estates
  • 80% of buildings to be Green Marked by 2030
  • Expanding into Myanmar (won 4 contracts in 2016) and Malaysia
  • Expand R&R and A&A services into untapped sectors in Singapore - educational institutions, army camps, industrial
  • Renewable energy - Grow renewable energy installation business in Singapore (Solar panels and hydrogen fuel cells)
Risks
  • Projects lost, competition, failure to execute growth plans




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