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IFS Potential?
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ken888
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13-Aug-2007 13:07
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IFS giving 3 cents dividend for half year from their S44 tax credits. For a dividend yield stock, it is a good opportunity to buy and hold such company during market uncertainty. They still can give dividend for their year end. So total dividend for the year will be good. It NTA is much higher than its current traded price and current PE is low. |
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gazebo
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31-Jul-2007 14:32
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Thanks for info .......hopefully they got buy insurance...hehe |
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agesis
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31-Jul-2007 14:23
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No, I have not. IMHO the possibility that IFS can recover 100% of the loan amt is pretty slim. IFS may have to write-off the outstanding loan amount that it failed to recover from the liquidation. |
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gazebo
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31-Jul-2007 14:17
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Have u evaluated the financial impact on IFS after it manage to recover the US$6.2m loan from EC-Asia? |
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agesis
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31-Jul-2007 11:38
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Have u evaluated the financial impact on IFS after it failed to recover the US$6.2m loan from EC-Asia? EC-Asia have been placed under insolvent liquidation by Order of Court on May 07. http://www.asx.com.au/asx/research/CompanyInfoSearchResults.jsp?searchBy=asxCode&allinfo=on&asxCode=ECI#headlines |
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ken888
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31-Jul-2007 11:01
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Releasing their results on 10th August after trading hrs. which is next week. Low PE and High NAV. Worth to take a look . |
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gazebo
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26-Jul-2007 11:24
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IFS Capital Limited - is a Singapore-based small cap financial services group incorporated in 1987, but only listed on SGX in 1993. Its main business is in providing financing to companies, mainly SMEs (small to medium enterprises), for their working capital needs. It achieves this by providing the companies with working capital loans, hire purchase, leasing, and machinery loans as well as investments, and also credit insurance and guarantee, mezzanine capital and structured finance, as well as cross border loans and finance. However, its main specialisation is in factoring services. What is factoring: Factoring is a well-established means of providing companies with working capital. Very simply, our clients assign their accounts receivables to us in return for a cash advance of up to 90%. We undertake the task of collecting the receivables as and when they fall due and keep our clients informed of their account status. Not only does this service help our clients to increase their turnover, it also relieves them of the time-consuming tasks of sales ledgering and credit management. As a full member of the International Factors Group (IF Group), IFS Capital Limited is able to offer factoring as an international service to its clients via a worldwide factoring network of more than 30 countries globally. Besides Singapore, it also has operations in Malaysia, Indonesia, and Thailand. On 29 May 2007, it also set up a wholly owned subsidiary in Hong Kong to handle financing business activities over there. Comparable Peers: Obviously, its most comparable peer on SGX would be HL Finance, which also provides financing (but not factoring) especially towards the SMEs. Based on their corporate profile, HL Finance is definitely the more established company, with a history that dates back to 1961. Its other strong point is the presence of a strong parent in the Hong Leong Group. Because of its noteworthy profile, HL Finance is probably the most noticed finance company on SGX outside of the big three banks of DBS, UOB, and OCBC, which is why its currently trades at $4.10 or 17x PE, a figure which is in line with its historical PE. On the other hand, IFS is barely recognised by most investors, and definitely not in the radar of all traders because of its small trading volume. But because of its obscurity, it is currently trading below its Fair Value in my opinion. Let's review the numbers. Financials Its most recent results were for 4QFY2006 on 22 Feb 2007 and the results were as such: Revenue: $24.5m Profit: $11.8m NAV: $0.9326 EPS: $0.0952 Based on its EPS, IFS's current price of $0.78 - $0.80 would only give it an approx. 8x PE, whereas its historical PE is at 10x, which is a fair discount to the usual 15x - 18x PE for finance stocks because of its small cap. Its NAV is also at a very healthy 18% premium to its traded price. furthermore, it managed to pay an ordinary dividend of $0.05 for FY2006, which works out to a generous 6.33% yield. This is not considering the bonus $0.125 special dividend it also paid out to provide shareholders with a one-for-five rights issue completed in May 2007. At present moment, it is extremely rare to be able to find a stock giving such a high yield at a price significantly below NAV. Other considerations Naturally, the immediate question to ask would be whether its yield and NAV are sustainable. Here's the answer:
Another point to note is that 75% of its stock is tightly held by its top 20 shareholders, which include several big banks and brokerages. Conclusion: IFS is clearly not the typical stock I buy that has explosive growth potential. In fact, its earnings growth was more or less flat for FY2006. However, at this price and for this kind of yield, I feel that IFS is definitely a good bargain in this overpriced market for a company which has given money back to its shareholders for 14 years even through SARS, the Asian financial Crisis, and 911. |
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solochn
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10-Jun-2007 00:42
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This one looks intresting. Anyone has any comment? |
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