Saturday, May 7, 2016

Sim Lian Group - My CNAV Analysis

Recently, when I did a stock screening on the stocks with dividend yield higher that 6 % (plus other criteria), Sim Lian Group (S05) is one of the non-REITS stock came in the top few. Of course, as constantly reminded by peer financial blogger friends, we should not focus too much on the dividend yield alone (which I totally agree). Hence, this post when I dig in further...

Sim Lian Group engages in the property investment and development, and building construction activities in Singapore. It also develops residential, industrial, and commercial projects; and leases investment properties. In addition, the company trades in industrial and marine lubricants; and leases, services, and maintains construction and industrial equipment and parts, as well as mobile sanitation facilities. Further, it engages in the design, consultancy, installation, maintenance, and related import and export sales of offshore module; and investment, development, operation, and management of real estate and real estate related assets. The company was founded in 1976.

The Key Quantitative Indicators of CNAV Strategy (Basing on the Dec 2015 Result in Yahoo Finance):

Net Asset Value (NAV) = $1.1257
Conservative Net Asset Value (CNAV2) = $0.4431
Current Price = $0.79
Discount For CNAV2 = -78%

Conclusion : From the price's perspective, it is traded above the CNAV2 but at a discount when compared it with NAV. 

The P.O.F Scores of CNAV Strategy:

Profitability Score = 1 (With the PE ratio of 4.4)
Operational Efficiency = 1 (with three consecutive years of positive operating cashflow)
Financial Efficiency = 1 (Debt To Equity Ratio of 52%)

Conclusion : A perfect POF indicators.

Other information:
1. The company has a strong Balance Sheet.
2. A stable stream of dividend yield throughout the years, especially in 2012 and 2015:

3. As at 30/06/2015, the Group's outstanding order book is approximately $566.6 millions.
4. Top 5 shareholders of the company are:
5. One area to take note is that the trading volume of the counter is quite low on most of the days.  

Click here for the pdf copy of Sim Lian Group's 2015 Annual Report!

Sim Lian Group is not a CNAV stock but still worth a second look for potential INCOME play. 

Are you vested on this counter? What is your take?


Note : Do You Own Due Diligence!

I've learnt this not-difficult-to-do calculation from the Value Investing Mastery Course (Big Fat Purse) last year. Immediately after the one day course, I am on my own to calculate the CNAV myself. With the help of the idiot-proof spreadsheet (provided free after the course), it makes calculating the CNAV a breeze.

Oh, by the way, they are still conducting the one-full-day Value Investing Master Course at $98, which is unbelievable. From what I know, most of their classes, which usually happen on the weekend, are fully booked. So, if you are interested to learn more about Value Investing and how to calculate the CNAV, you should find out more from the horse's mouth!


  1. Is there any tool to screen out CNAV stocks?

    1. CW8888 : I think BigFatPurse has a database housing all the CNAV stocks but only for the premium members ;-)

      Have a great weekend!


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