AEM - FY2021 (SGD 4.20) - 03 Mar 2022

Target

AEM's Target in Year 2021 is SGD550mil and they able to hit the target. 

Company has provided Year 2022 target between S$670 million to S$720 million. 

Let's look at financial Yr 2021 results. 

Income Statement

In 1H2021, company has mentioned that there are strong uptick on year 2H2021 and from the revenue we can see that it is a fact. Integrity and honesty are always the most expensive thing in the world. 

In Yr 2021, company able to achieved 565mil revenue but not to forget some of this revenue contributed by CEI that recently acquired. Nonetheless, company able to generate gross profit of 186mil which 12 percents higher than FY2020. 

From the income statement, we can clearly see that company is heavily invested in R&D which is about 10percent of Gross Profit. Hence, the net profit for this year is lower than last year about  6percent. Hopefully with 10percent of investment in R&D can get a better return for Yr2022. 

High SG&A is due to transfer and professional fees of acquisition of CEI. 

Balance Sheet

Looking at the balance sheet, the 1st thing 1st I will look at intangible assets or goodwill. Intangible or goodwill shouldn't more than 30percent of Total assets. Company has about 13 percent of intangible assets against Total assets. 

Inventories jump significantly and company explained that inventories increased due to the consolidation of CEI Limited and higher inventory holdings at year-end to meet anticipated increase in production and sales volume.

Trade and receivable increase significantly, it is a warning if the TR keep increasing. But looking at the Trade payable, it also increase significantly. With this, it should not have cash turn around issue. 

From Balance sheet, we can see that the company is net cash company. 

Cash Flow

Company able to generate positive cash flow. With termasek private placement, company has extra cash on hand to acquire ATECO and buy assets. 

Calculation

Let's do a quick calculation, assume net profit margin is 15.5% 

SHE - 301,889,000

Revenue - 670 and 720 mil

Net profit - 104mil and 127mil

EPS - 0.34 and 0.42

Today price - SGD 4 (7 Mar 2022) 

Price / EPS = 4 / 0.34  = 11.7 and 4/0.42 = 9.5

ROE = 104 mil / 402,514,000 = 25 and 127 mil / 402,514,000 = 31

Undervalue stock.

SingMedical FY2021 (26 Feb 2022) - (SGD 0.305)

 Financial Information

FY2021 Singmedical report, my biggest lost at this moment. Holding for 5 years and keep seeing the company grow but price is not grow yet. Let's look at the performance. 

Income Statement

FY2021 revenue increased 13mil or 15.5percent compare to FY2020. But this is not a fair comparison as we know that FY2020 was hit hard by pandemic. Let's compare it with pre-covid moment. 

FY2021 - 100 mil , GP - 44mil , EPS - 3.23 , GPM - 44%

FY2020 - 87mil , GP - 38mil , EPS - 1.81 , GPM - 44%

FY2019 - 95mil , GP - 43mil , EPS - 2.83 , GPM - 45%

From the comparison, we can see that the business is back to pre-covid year. 

Balance Sheet

I can't emphasis enough on the importance of the balance sheet, especially on the goodwill and intangible assets, goodwill should not more than 30 percent of total assets . Besides these 2 items, we also need to look at account receivable,  it should not more than 30 percent of revenue as well. 

From the report, we can see that loan and borrowings were reduced which is a good sign and also the cash and bank balances were increased. 

Cash flow

CFFO increased 4mil and management keep acquire businesses into the group. Overall, company generate positive FCF. 

Segmentation:

Revenue is about 100mil and 62 mil from health segment and 39 mil from diagnostic and aesthetics. 

Summary

No doubt the revenue is keep increasing YoY and company able to increase the EPS. CEO mentioned that aesthetic business is overwhelmed and wanted to expand locally in women's and children's business also aesthetic business. Dr.Beng keeps emphasize on medical tourism which previously contributed 15-20percent of the company revenue. With opening border, will medical tourism back to normal? Aesthetic business will still overwhelm or customer will go over Malaysia to do the facial treatment? Nonetheless, this result I would say is acceptable. 

Dr.Beng has mentioned that they focus will be at suburban expansion . 

Simple calculation:

Outstanding shares: 486,382,109

EPS: 3.22

P/E = 9.47

ROE: Net profit / Total equity =  15,716 / 166,538 = 9.4%

CAGR Rev - 5 years (2017 - 2021) - 8%

CAGR EPS - 5 Years (2017 - 2021) = 9%

Sasseur Reit (22 Jan 2022) - Current price - 0.815, DY - 8 percents

Introduction

Sasseur Reit listed on SGX in 2018.  There are 4 properties under Sasseur which located in:

1) Chongqing Liangjiang

2) Chongqing Bishan

3) Hefei

4) Kunming

All these shopping mall is outlet store. 

Financial

Referring to the table above, occupancy rate was dropped in 2020, it is due to Covid restriction in china. In Year 2021, occupancy rate has overall increased to 93.7 in Q3 2021. 

My thought

I've tried to do some research through tik-tok and found that Sasseur outlet business is not that good as I thought. Nonetheless, I would think that outlet definitely a business that can maintain as I prefer to shop at outlet rather than other retail shop because it is cheaper than others. 

Risk - WALE 1.3 years, meaning that turn over is fast and company may have difficulty to get another tenant in the short time. 

Let's do some calculation: 

Price - 0.815

est DPU - 6.545 x 2 + 6.533 / 3 = 6.541

Dividend yield: 0.06541 / .815 = 8 percents

I think 8 percents is really a good return. This can be consider.