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

 

 

 

FY19 Results Announcement
Friday, 30 Aug (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 4x PE following strong earnings turnaround. With only 2 quarters of contributions from the infrastructure segment (5 of the 26 land parcels delivered for Xingwen project), RI is already trading at an attractive PE of 4x based on 15MFY2019 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 12/2017
Earnings Release Date (Est) 15/08/2019
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 15MFY2018 15MFY2019
Revenue (S$m) 6.8 31.2 5.9 38.0
Net Profit (S$ m) 4.4 7.3 -1.0 7.3
P/E 4.0
P/B 0.7
Return on Equity 18.7%
Net D/E Net cash
Est Dividend Yield N/A
Source: Bloomberg (Based on share price of S$0.435)

Risks

Inability to secure new projects, global economic slowdown