ChanKitWhyePrior to his retirement, Chan Kit Whye (left) worked more than 30 years as Regional Finance Director, Financial Controller and Manager in a multinational specialty chemical business. He has played an active role in CPA (Australia) Singapore Branch, taking up positions in its Continuing Professional Development and Social Committees. Kit Whye is a Fellow of CPA Australia, CA of Institute of Singapore Chartered Accountants and CA of the Malaysian Institute of Accountants. He holds a BBus(Transport) Degree from RMIT, MAcc Degree from Charles Sturt University and MBA from Durham Business School.



GENTING SINGAPORE: Full year profit for 2014 declined 10% from $708 million in 2013 to $635 million. Of the $635 million, $118 million belongs to perpetual security holders, therefore, the difference really belong to ordinary shareholders which translate to 4.3 cents a share.

At current share price, Genting S'pore's PE is 25 times, NAV is 61 cents, and with only 1 cent dividend, its dividend yield is only 1%. Its big ticket item is the impairment loss on trade receivables of
 $262 million, 42% higher than 2013.

What drives that huge impairment, I really don't know, cannot figure out, and cannot understand why. Is Genting worth 1.00 a share?. That is the floor from a technical view. If it drops below that floor, it may end up close to its NAV, and give it a reasonable PE of 14 times. I also see lower high all the time from the chart, but not lower low. Someone supporting the share price from falling below 1.00? Not so sure.

 
NERA TELECOM: Nera Telecom reported a full year 2014 net profit of $16.2 million which is about similar to 2013, if excluding a one time $7 million negative goodwill booked into 2013 is taken into consideration.

EPS is 4.5 cents, while its NAV is 16.8 cents. Final dividend is cut by half from 4 cts in 2013 to 2 cents currently, giving a total dividend paid for the year of 4 cents, which translate into 5.2% dividend yield. The telecom segment revenue has declined 12% to $61 million while its infocomm segment revenue has improved by the same percentage to $121 million. Asean revenue improves by $15 million managed to counter the decline in revenue from Middle East and Africa by $9 million.

Free cash flow for 2014 is $2.5 million versus 2013 of $12.3 million. It means that its free cash flow per share has dropped from 3.3 cts to less than 1 cent a share, which is why there is a cut in dividend. Market may react negatively to the cut in dividend payout. From the technical chart, dropping back to 0.72 at Fibo 38.2% may also be possible, but cum-dividend may support its share price temporary in my opinion.
 


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