Boustead Singapore analysis
Shareholder oriented Asian Conglomerate
Ticker: F9D, Singapore.
Price: 1 SGD
Market cap: 465 Million SGD.
I opened this position in 2023. This company is up about 20% plus 5% dividends since I added it to the portfolio last year as disclosed.
I wanted to do a deep analysis to know where we are now and what is the current appeal of holding the stock.
Today is not the sexiest thesis… an undervalued Asian conglomerate.
I will look for the value, try to understand the complex capital allocation, and dissect the real estate assets which are hidden from the earnings.
Here, we have a diversified conglomerate, with energy services, geospatial software services, real estate and healthcare.
As an introduction, and mentioned in their AGM, Earnings per share grew at a compounded annual growth rate of 9% from FY1997 to FY2024 (while paying dividends).
So maybe there is something interesting here?
This was a long and difficult write up to do because of the four divisions that the company has. Let’s go!
Short History
Boustead Singapore was established in 1828 as a trading company in Singapore.
Plenty of ancient events happened until 1996, the type which belongs more in history books or movies than in stock analysis. It can be found here: History
In 1996, the current Chairman Mr Wong Fong took a controlling shareholding and took over the management. The company was not very profitable, but had a brand name, and he used it to build engineering services with the Boustead name as a brand. Boustead now stands for excellence, conservative and seriousness.
The take over and new strategy was successful, and the company grew revenues and profits, expanding into Geospatial projects and real estate engineering.
In 2014 it peaked in share price at around 1.6 SGD. This coincided with the last oil capex boom.
In 2015 the real estate branch was listed (“Boustead Projects”)
In 2018 the company expanded into Healthcare with an acquisition from a related party. It was a small investment, but still a disaster as it could not scale and kept losing money.
In 2024, the real estate branch was delisted and bought back.
What I see is a history of two halves, a successful period, followed by an energy bear market and weaker capital allocation decisions, maybe due to the older age of the manager (80).
There is now what seems like third period starting in 2024.
Business overview
We have a diversified company:
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