Cedric Yang-Yitra (not his real name) contributed this article to NextInsight.

Stock price 
(16 Sept 2020)

38 c

52-week range

13.4 – 48 c

PE (ttm) 


Market cap

S$163 m

Shares outstanding

429.6 m



One-year return


Source: Yahoo!
I had invested in ISDN Holdings since Jan 2017.  Let me share few fundamental reasons why.

1) Net cash company. In all kinds of crisis, having net cash is always a safer bet as investors are not open to “rights” issue or placements, resulting in dilution.

That said, ISDN placed out shares to Novo Tellus in March 2019. I will explain later why this placement is excellent.

2) In my line of work, I wrote a confidential paper for my company, highlighting major macro trends that can take a company forward in the next decade.

Companies operating in 3 or more of these areas are generally hard to find, let alone undervalued ones.

Out of the 10 macrotrends I wrote about, ISDN is in 7 of them. These are: 

a) Automation is their core engine. Ever since their entrance into China in 1995, ISDN is deeply rooted in the China market,  deriving 70% of their revenue from China.

Robot 8.20Photo: ISDNThe US-China trade war forces China to be independent of USA’s semiconductor superiority, pushing Chinese companies to set up automated lines of production on their own.

With Covid-19, automation is accelerated as companies seek solutions that can replace workers prone to sickness and distancing.

During the recent results brief, the ISDN boss mentioned record earnings was achieved in July 2020, as ISDN continued to capture the automation market strongly.

The entry barrier is extremely high, as the know-how and market entry are both not achievable without long presence and experience.

b) Biotech, with recent JV with ERST APAC producing disinfectant and coating, which are tested by end users to be a far superior product during benchmarking.

Since the JV in May 2020, ISDN has captured several users including construction companies, tourism companies, transport companies in Singapore. They are also going into the huge anti-mold industry in painting (imagine a home without mold!).

Singapore is currently their foothold and testbed. Once travel restrictions are relaxed, with their long presence in China, this JV is going to take off. Additionally, the company is also going into B2C area, pushing this product to consumers (to coat their cars, smart phones, etc)

c) 3D Additive Manufacturing through a joint lab agreement with A*STAR. This is still under R&D phase, however, it shows what a cash-rich company can do.

ISDN looks to take its technology level to the next value chain, upgrading itself constantly and investing in R&D for the future.

d) Renewable Energy via Hydroplants in Indonesia. The renewable market consists of 3 big types – Hydro, Solar, Wind.

hydro2Photo: ISDN

Of these, Hydroplants are the most established in terms of technology. Since investing in 3 hydroplants in Indonesia, shareholders can finally reap the rewards as the plants are near completion.

The delay in the construction also brought about tangible benefits. Indonesian government has increased the electricity tariffs, and law has been passed to move from a BOT model to BOO model, giving the company a good ground to spin off the plant for a huge return.

d) 5G as a core engine upgrade. 5G will be undeniably massive and ISDN is already preparing itself to ride this wave of innovation.

f) Healthcare in producing high value medical components. One of the reasons why Novo Tellus invested in ISDN was because they supply medical parts that cannot fail.

Few companies in the world, let alone one from Singapore, have that confidence in producing such high quality parts.

Public does not know such information as ISDN branding is not widely marketed. However now the company is looking to build its brand as a shining MNC from Singapore.

g) IoT through ISDN software business. Ever since its initiation, ISDN software business has collaborated with big players such as Skkynet, Stratus Technologies, AVEVA, and Schneider Electric. This software business will act as a final cover to present ISDN as a one stop solution provider, a presidential suite with every solution under one roof.

3) Ever since the entry of Novo Tellus, ISDN has been focusing not just on top line revenue, but bottom line productivity.

In this, the company has made significant resource and contact sharing across its huge network. The company has also made significant progress in shifting from decentralized to centralized resource set up so as to improve its efficiency and boosting the integrativeness of the company.

KeithToh Novo11.19Keith Toh of Novo Tellus. NextInsight file photo4) Novo Tellus commissioned due diligence on ISDN by independent reviewers, who produced a 200-page report, and found that the company is worth investing into.

Novo Tellus is the PE fund that brought about the stellar performance of AEM Holdings. Now, if a layman like me can see that ISDN is a gem undiscovered, a professional like Novo Tellus would have dug deeper and know more.

Additionally, Novo Tellus has a prodigy Keith Toh, who enrolled into Stanford University at the age of 16, as one of ISDN board members.

(See also: )

5) Despite all the above, the company traded at $0.18-$0.2 before the recent rally.

After sieving through company after company, finding one that is undervalued, holding net cash, has been profitable every year since listing, fitting itself perfectly for growth in macroeconomic trends, a management that communicates with its shareholders, a company that I can travel to and view their operations at ease, and a company which envisions that growth and learning can never stop, I found only ISDN Holdings that fulfils all my criteria.

Though the recent run-up in stock price is impressive, it is still far too undervalued in my opinion.

Of course, my opinion is not to be treated as gospel truth, however well it is substantiated. Therefore, do your own studies and diligence to see if this is a company worth putting your money into.

But as for me and my team, such a deep fundamental analysis has never failed me in my 15 years of investment. So I maintain my bullishness for this business, management, and company.


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