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U09

Avarga SGX:U09 Stock Report

Last Price

S$0.23

Market Cap

S$213.5m

7D

2.2%

1Y

-21.7%

Updated

09 Aug, 2022

Data

Company Financials
U09 fundamental analysis
Snowflake Score
Valuation4/6
Future Growth0/6
Past Performance4/6
Financial Health5/6
Dividends0/6

U09 Stock Overview

Avarga Limited, an investment holding company, engages in manufacturing and trading of paper products, and providing management services in Canada, the United States, Malaysia, Singapore, Myanmar, Sri Lanka, Australia, and internationally.

Rewards

Trading at 93% below our estimate of its fair value

Earnings grew by 33.7% over the past year

Risk Analysis

No risks detected for U09 from our risk checks.

Avarga Competitors

Price History & Performance

Summary of all time highs, changes and price drops for Avarga
Historical stock prices
Current Share PriceS$0.23
52 Week HighS$0.32
52 Week LowS$0.21
Beta1.08
1 Month Change0%
3 Month Change0%
1 Year Change-21.67%
3 Year Change25.00%
5 Year Change-11.32%
Change since IPO-47.19%

Recent News & Updates

Shareholder Returns

U09SG ForestrySG Market
7D2.2%0.4%0.8%
1Y-21.7%-11.3%-0.6%

Return vs Industry: U09 underperformed the SG Forestry industry which returned -11.3% over the past year.

Return vs Market: U09 underperformed the SG Market which returned -0.6% over the past year.

Price Volatility

Is U09's price volatile compared to industry and market?
U09 volatility
U09 Average Weekly Movement3.5%
Forestry Industry Average Movement5.6%
Market Average Movement4.8%
10% most volatile stocks in SG Market12.4%
10% least volatile stocks in SG Market2.2%

Stable Share Price: U09 is not significantly more volatile than the rest of SG stocks over the past 3 months, typically moving +/- 4% a week.

Volatility Over Time: U09's weekly volatility (4%) has been stable over the past year.

About the Company

FoundedEmployeesCEOWebsite
1967n/aIan Tonghttps://www.avarga.com.sg

Avarga Limited, an investment holding company, engages in manufacturing and trading of paper products, and providing management services in Canada, the United States, Malaysia, Singapore, Myanmar, Sri Lanka, Australia, and internationally. The company operates through four segments: Paper Mill, Power Plant, Building Products, and Others. The company manufactures and sells industrial grade paper products, such as test liner, corrugating medium, chipboard, and core boards that are primarily used to manufacture corrugated carton boxes and other finished paper products.

Avarga Fundamentals Summary

How do Avarga's earnings and revenue compare to its market cap?
U09 fundamental statistics
Market CapS$213.45m
Earnings (TTM)S$73.30m
Revenue (TTM)S$2.44b

2.9x

P/E Ratio

0.1x

P/S Ratio

Earnings & Revenue

Key profitability statistics from the latest earnings report
U09 income statement (TTM)
RevenueS$2.44b
Cost of RevenueS$2.10b
Gross ProfitS$334.41m
Other ExpensesS$261.11m
EarningsS$73.30m

Last Reported Earnings

Dec 31, 2021

Next Earnings Date

n/a

Earnings per share (EPS)0.081
Gross Margin13.73%
Net Profit Margin3.01%
Debt/Equity Ratio16.7%

How did U09 perform over the long term?

See historical performance and comparison
We’ve recently updated our valuation analysis.

Valuation

Is U09 undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

4/6

Valuation Score 4/6

  • Price-To-Earnings vs Peers

  • Price-To-Earnings vs Industry

  • Price-To-Earnings vs Fair Ratio

  • Below Fair Value

  • Significantly Below Fair Value

  • Analyst Forecast

Key Valuation Metric

Which metric is best to use when looking at relative valuation for U09?

Other financial metrics that can be useful for relative valuation.

U09 key valuation metrics and ratios. From Price to Earnings, Price to Sales and Price to Book to Price to Earnings Growth Ratio, Enterprise Value and EBITDA.
Key Statistics
Enterprise Value/Revenue0.2x
Enterprise Value/EBITDA2.4x
PEG Ration/a

Price to Earnings Ratio vs Peers

How does U09's PE Ratio compare to its peers?

U09 PE Ratio vs Peers
The above table shows the PE ratio for U09 vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
CompanyPEEstimated GrowthMarket Cap
Peer Average8.6x
N08 New Toyo International Holdings
10.3xn/aS$83.9m
C8R Jiutian Chemical Group
2.1x-8.7%S$186.9m
OAJ Fortress Minerals
11.7x41.2%S$175.0m
DM0 PSC
10.5x5.9%S$204.8m
U09 Avarga
2.9xn/aS$213.5m

Price-To-Earnings vs Peers: U09 is good value based on its Price-To-Earnings Ratio (2.9x) compared to the peer average (8.6x).


Price to Earnings Ratio vs Industry

How does U09's PE Ratio compare vs other companies in the Asian Forestry Industry?

Price-To-Earnings vs Industry: U09 is good value based on its Price-To-Earnings Ratio (2.9x) compared to the Asian Forestry industry average (12.2x)


Price to Earnings Ratio vs Fair Ratio

What is U09's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

U09 PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio2.9x
Fair PE Ration/a

Price-To-Earnings vs Fair Ratio: Insufficient data to calculate U09's Price-To-Earnings Fair Ratio for valuation analysis.


Share Price vs Fair Value

What is the Fair Price of U09 when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: U09 (SGD0.24) is trading below our estimate of fair value (SGD3.34)

Significantly Below Fair Value: U09 is trading below fair value by more than 20%.


Analyst Price Targets

What is the analyst 12-month forecast and do we have any statistical confidence in the consensus price target?

Analyst Forecast: Insufficient data to show price forecast.


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Future Growth

How is Avarga forecast to perform in the next 1 to 3 years based on estimates from 0 analysts?

Future Growth Score

0/6

Future Growth Score 0/6

  • Earnings vs Savings Rate

  • Earnings vs Market

  • High Growth Earnings

  • Revenue vs Market

  • High Growth Revenue

  • Future ROE


10.4%

Forecasted Materials industry annual growth in earnings

In this section we usually present revenue and earnings growth projections based on the consensus estimates of professional analysts to help investors understand the company’s ability to generate profit. But as Avarga has not provided enough past data and has no analyst forecast, its future earnings cannot be reliably calculated by extrapolating past data or using analyst predictions.

This is quite a rare situation as 97% of companies covered by SimplyWall St do have past financial data.


Discover growth companies

  • Examine whether Avarga is trading at an attractive price based on how much it is expected to earn in the future, and relative to its industry peers and the wider market.
  • Avarga competitive advantages and company strategy can generally be found in its financial reports archived here.

Past Performance

How has Avarga performed over the past 5 years?

Past Performance Score

4/6

Past Performance Score 4/6

  • Quality Earnings

  • Growing Profit Margin

  • Earnings Trend

  • Accelerating Growth

  • Earnings vs Industry

  • High ROE


44.7%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: U09 has high quality earnings.

Growing Profit Margin: U09's current net profit margins (3%) are lower than last year (3.2%).


Past Earnings Growth Analysis

Earnings Trend: U09's earnings have grown significantly by 44.7% per year over the past 5 years.

Accelerating Growth: U09's earnings growth over the past year (33.7%) is below its 5-year average (44.7% per year).

Earnings vs Industry: U09 earnings growth over the past year (33.7%) exceeded the Forestry industry 33.1%.


Return on Equity

High ROE: U09's Return on Equity (26.7%) is considered high.


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Financial Health

How is Avarga's financial position?

Financial Health Score

5/6

Financial Health Score 5/6

  • Short Term Liabilities

  • Long Term Liabilities

  • Debt Level

  • Reducing Debt

  • Debt Coverage

  • Interest Coverage

Financial Position Analysis

Short Term Liabilities: U09's short term assets (SGD509.9M) exceed its short term liabilities (SGD263.3M).

Long Term Liabilities: U09's short term assets (SGD509.9M) exceed its long term liabilities (SGD127.9M).


Debt to Equity History and Analysis

Debt Level: U09 has more cash than its total debt.

Reducing Debt: U09's debt to equity ratio has increased from 1.6% to 16.7% over the past 5 years.

Debt Coverage: U09's debt is well covered by operating cash flow (203.4%).

Interest Coverage: U09's interest payments on its debt are well covered by EBIT (14.2x coverage).


Balance Sheet


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Dividend

What is Avarga current dividend yield, its reliability and sustainability?

Dividend Score

0/6

Dividend Score 0/6

  • Notable Dividend

  • High Dividend

  • Stable Dividend

  • Growing Dividend

  • Earnings Coverage

  • Cash Flow Coverage

Dividend Yield vs Market

Notable Dividend: Unable to evaluate U09's dividend yield against the bottom 25% of dividend payers, as the company has not reported any recent payouts.

High Dividend: Unable to evaluate U09's dividend yield against the top 25% of dividend payers, as the company has not reported any recent payouts.


Stability and Growth of Payments

Stable Dividend: Insufficient data to determine if U09's dividends per share have been stable in the past.

Growing Dividend: Insufficient data to determine if U09's dividend payments have been increasing.


Earnings Payout to Shareholders

Earnings Coverage: U09 is not paying a notable dividend for the SG market.


Cash Payout to Shareholders

Cash Flow Coverage: Unable to calculate sustainability of dividends as U09 has not reported any payouts.


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Management

How experienced are the management team and are they aligned to shareholders interests?

2.2yrs

Average management tenure


CEO

Ian Tong (34 yo)

2.17yrs

Tenure

S$563,522

Compensation

Mr. Ian Tong is the Founder of Axio Developments Ltd. and serves as its President. Mr. Ian has been Chief Executive Officer of Avarga Limited since June 1, 2020.Mr. Tong was Executive Director of Operatio...


CEO Compensation Analysis

Compensation vs Market: Ian's total compensation ($USD408.95K) is below average for companies of similar size in the SG market ($USD712.28K).

Compensation vs Earnings: Ian's compensation has been consistent with company performance over the past year.


Leadership Team

Experienced Management: U09's management team is considered experienced (2.2 years average tenure).


Board Members

Experienced Board: U09's board of directors are considered experienced (5.4 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

Company Information

Avarga Limited's employee growth, exchange listings and data sources


Key Information

  • Name: Avarga Limited
  • Ticker: U09
  • Exchange: SGX
  • Founded: 1967
  • Industry: Paper Products
  • Sector: Materials
  • Implied Market Cap: S$213.454m
  • Shares outstanding: 908.31m
  • Website: https://www.avarga.com.sg

Location

  • Avarga Limited
  • No. 13-10, Great World City West Lobby
  • 1 Kim Seng Promenade
  • Singapore
  • 237994
  • Singapore

Listings


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2022/08/09 00:00
End of Day Share Price2022/08/08 00:00
Earnings2021/12/31
Annual Earnings2021/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.