800 Super has grown steadily since its inception as a waste management
solutions provider to a one-stop provider of waste and environmental solutions
by expanding into the cleaning, recycling and horticulture industries. It is
one of the four licensed public waste collectors in Singapore appointed by the
National Environment Agency (NEA). Its industrial and commercial waste
collection services span across various industries including shopping
complexes, hotels, factories, shipyards, etc.
In Singapore, 800 Super was awarded by the NEA
for the cleansing of public areas including public roads and pavements in the
North West and South West district which almost covers half of Singapore. Its horticultural
services include grass-cutting, planning and maintenance of landscape and
aboricultural services that include the planting and pruning of trees and
plants.
800 Super’s business is considered non-cyclical and defensive as the waste still needs to be collected and
the roads still needs to be swept during both good and bad times.
Between FY2011 to FY2015, its profit has a
compound annual growth rate of 39.86%. The company has been giving out
dividends in the past years and FY2015 being the highest at S$0.02. This translates
to a dividend yield of 3.03 percent based on the closing price of $0.66 on 27
May 2016.
The trailing price-earnings ratio is at 6.73x.
800 Super largest shareholder Yong Seong
Invesment increased its holdings in the group in February at a price of 43 to
44 cts, which has increased its stake in 800 Super from 66 to 66.8 percent.
Being defensive and in an industry that has relatively
high entry barriers, the worst case scenario will be that the company has
stopped growing and will maintain its p/e at 6.73x, this should give its
investors a return of
14.86 percent per year, some of which will come from the dividend declared
by the management board, and some in the retained earnings which should be
reflected in the surge in share price.
The transaction volume of the share is usually
very low but both the prices and its volume have gone up substantially lately
as market players started to have interest in it. Due to the illiquidity of the
transactions, chart reading is not useful. This is a stock more for investors
with a long-term horizon.
Going forward, there are three highly possible scenarios
that I think of:
1.
Privatisation of the company: the share price
will surge.
2.
Bonus issue: the share price will surge.3. Giving better dividend: the share price will surge.
Superphang
http://superphang.blogspot.sg
