Yangzijiang Financial Holdings (YZJFH) has delivered full year results which is within expectations.
Summary
- Earnings per share of 8.6 cents
- Dividends of 3.45 cents
- Earnings was boosted by china government grant (1 SG cents) and no more credit allowance provisions in losses
Currently YZJFH trades at a share price of 56.5 cents or SGD$1.98 billion market cap.
Earnings
As said, YZJFH recorded SG$40mil in government grant, SG$30 mil in exchange rate gains. I am sure this will not be replicated in FY 2025. However, as the company's debt investment portfolio continues to decrease, we might see more reversal in credit allowance which is a "gain". This will offset government grant income.
I expect YZJFH to log a 8 SG cents in annual earnings for FY2025. 02 reasons: first, its maritime investment business in Singapore is growing and second, the company will start reversing its credit allowance because its china debt investment is growing smaller.
$1,380 Million in Cash and Cash products in Singapore
One important point from the year end results is that YZJFH has transferred a significant amount of cash from China to Singapore. With the cash in Singapore, it can be easily verified and reduces the allegations that the cash items in its balance sheet is fake.
The total amount of funds in Singapore cash and yield enhancement produces is now SGD$1.380 billion. The company has 52 cents in cash equivalent products. This means 90% of its current market cap is in easily realised assets.
Cheap at Current Price
Even at 56.5 SG cents, the stock is way too cheap. At future 8 SG cents earnings and 3.2 SG cents dividend, this stock is at least a 5% dividend yielder. Hence target price is at least 64 SG cents.
However, I do not think this is a fair value as it slowly winds down its China debt investment, with continuing share buybacks, YZJFH should march towards a $1.20 NAV. Putting it at 0.8 times price book, it is 96 SG cents. There is a lot more upside to go.
<Author is vested in YZJFH>
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