By Mystic Dax
ISOTeam - Watchlist and perhaps an ideal time to enter due to Wuthelam holding last Friday deal to raise stakes to almost 60% worth $15.6billion, becoming the majority shareholder.
<FYI, the Wuthelam group (Nippon Paint Singapore)is also a substantial shareholder of ISOTeam with slightly over 5% shareholdings>
(Currently, trading at $0.138)
(Below details extracted from POEMS)
- Current Price : $0.141
- NAV : Approx. $0.20
- Business Summary: A/A upgrading, maintenance related, M&E services, coating & painting works, bike sharing (new venture)
- Placed out new shares to Japan?s Taisei Oncho at $0.24 this year (At least 62,000,000 new shares this year to, raising more than $13.6 million so far)
- Average Dividend : 2 to 3%
- Gearing ration/ Debt to Equity : 22.10%
- Recently Secured new contracts worth $32.5million in June (good sign amidst COVID19 situation)
- Prior to above award, they have already secured order book of $106 mil in FY2020
- Company did 3 share buybacks this year at (200,000 shares @ $0.19x, 200 shares @ $0.155, 100,000 shares @ $0.12x)
- over the past several years, they have done plenty of company share buy blacks at much higher prices of over $0.58 too.
- they are In installation of solar powered related business sector too
- Have Nippon Paint Singapore as substantial shareholder
(Their past placement was as high as $0.50 or even more)
- Exclusive applicator of Nippon Paint in for various government segment (I.e JTC, HDB, Town Councils etc)
1) At current prices, ISOteam looks to be trading cheaply at a massive discount, especially when compared to Taisei Oncho buying in at $0.24
2) Japanese companies tend to go by the book and with their investment into ISOteam, it shows they see potential and more importantly, they have seen the books and have surely conducted strict due dilligence in covered all aspects of business. This is actually quite assuring to any new retail investors who decides to invest in ISOteam.
3) Their business are mainly in maintenance/upgrading and bulk of their work is with the government (HDB/Town council) which helps as they would definitely paid end of the day. In addition, we can expect them to secure more contracts as many housing development are aging.
1) The sector that ISOteam is in are considered quite recession proof. However, the recent COVID19 situation has indeed put strain in their business as they are very dependent on foreign workers to carry out their works
(If unable to work due to various reasons like dormitory shutdown, BCA requirement, it affects their ability to claim the contract sum) Nevertheless, it seems that government have taken better control in this area and we believe that most projects and work will resume eventually.
2) Investment from Japan company Taisei Oncho and company doing share buybacks a amidst COVID19 shows belief in ISOteam business capability to recover in time.
3) Nevertheless, price has been sliding down from most recent high of $0.189 (18th June 2020) and a better entry trigger would be once new bottom is found and price reverse back up strongly (look for bullish signal).
This will be for a longer term investment play to be safe.
4) Target price : Easily $0.20 when market situation gets better and when news report shows construction sector going back to normalcy, along with most foreign workers going back to workforce. (Which currently SG government is working on now)
5) Now that ISOTeam substantial shareholder Wuthelam Holdings have become the majority shareholder of Nippon paint, this might be a good catalyst for the stock since they are vested, they can provide better rates which may help ISOTeam improve their margins and give them an added edge over the competitors. In addition, it shows that they are optimistic that the coating and painting industry would be improved.