Raffles Infrastructure

About Raffles Infrastructure

Raffles Infrastructure is principally engaged in the infrastructure investment in Asia, having successfully secured large-scale roadway and railway projects and established close working relationships with numerous SOEs and government bodies

 

 

 

1QFY2020 Results Announcement
15 Nov (Est)

Investment Merits
  • Proxy to the region’s infrastructure development. RI’s involvement in reputable mega projects such as Dengfeng City railway is expected to raise the profile of the Group, strengthening its track record for future projects bidding, as it explores other parts of Asia such as Vietnam and Bangladesh for investment opportunities.
  • Current market cap ≈ money raised in recent placement. In Sep 18, RI successfully raised about S$30m from a share placement to investors at S$0.60/share, including strategic major shareholder, state owned enterprise, China Capital Group.
  • Trading at 5x PE following strong earnings turnaround. With maiden contributions from the infrastructure segment (5 of the 26 land parcels delivered for Xingwen project), RI is trading at an attractive PE of 5x based on FY2019 earnings.
  • “Guaranteed Profit”. With a projected return* over the amortized cost of construction, RI is expected to earn a “guaranteed” profit as long as it manages its project financing well.
  • Low customer credit risk with stable cashflow contribution for the next 10 years. Based on the agreement for Xingwen County project, the local authorities will underwrite the payment of the project, providing the group with a stable stream of cash flow over the next 10 years. 

*projected return based on 8.8%/year over the amortized cost of construction over a 10 years period

Stock Information
Price 0.435
Market Cap (SGDm) 29.6
YE 06/2019
Earnings Release Date (Est) 15/10/2019
52 wk high/low 0.550/0.190
YTD % change +35.9%
Free Float % 28.4%
Insiders Holding 24.5%
Key financial highlights
Key Highlights 4QFY19 5QFY19 FY2018 FY2019
Revenue (S$m) 6.8 31.2 5.4 41.8
Net Profit (S$ m) 4.4 7.3 -0.6 6.5
P/E 4.6
P/B 0.7
Return on Equity 20.0%
Net D/E Net cash
Est Dividend Yield N/A
Source: Bloomberg (Based on share price of S$0.435)
*FY2019 covers a period of 18 months from 1 Jan 2018 to 30 June 2019, following a change in financial year from 31 Dec to 30 June.

Risks

Inability to secure new projects, global economic slowdown