SGX:U09

Stock Analysis Report

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Executive Summary

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


Snowflake Analysis

Adequate balance sheet and slightly overvalued.

Share Price & News

How has Avarga's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: U09 is more volatile than 75% of SG stocks over the past 3 months, typically moving +/- 10% a week.

Volatility Over Time: U09's weekly volatility (10%) has been stable over the past year, but is still higher than 75% of SG stocks.


Market Performance


7 Day Return

13.6%

U09

9.5%

SG Forestry

1.4%

SG Market


1 Year Return

104.3%

U09

23.8%

SG Forestry

-10.9%

SG Market

Return vs Industry: U09 exceeded the SG Forestry industry which returned 23.8% over the past year.

Return vs Market: U09 exceeded the SG Market which returned -10.9% over the past year.


Shareholder returns

U09IndustryMarket
7 Day13.6%9.5%1.4%
30 Day34.0%20.3%5.4%
90 Day31.4%23.9%17.3%
1 Year119.3%104.3%26.4%23.8%-6.1%-10.9%
3 Year74.2%26.4%-1.6%-10.4%-9.4%-20.5%
5 Year217.4%105.5%45.9%32.5%27.3%3.9%

Long-Term Price Volatility Vs. Market

How volatile is Avarga's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Avarga undervalued compared to its fair value and its price relative to the market?

13.29x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Below Fair Value: U09 (SGD0.34) is trading above our estimate of fair value (SGD0.32)

Significantly Below Fair Value: U09 is trading above our estimate of fair value.


Price To Earnings Ratio

PE vs Industry: U09 is good value based on its PE Ratio (13.3x) compared to the XA Forestry industry average (17.6x).

PE vs Market: U09 is good value based on its PE Ratio (13.3x) compared to the SG market (15.1x).


Price to Earnings Growth Ratio

PEG Ratio: Insufficient data to calculate U09's PEG Ratio to determine if it is good value.


Price to Book Ratio

PB vs Industry: U09's PB Ratio (1.5x) is in line with the SG Forestry industry average.


Next Steps

Future Growth

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

26.1%

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.


Next Steps

Past Performance

How has Avarga performed over the past 5 years?

21.3%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: U09 has a large one-off gain of SGD11.0M impacting its June 30 2020 financial results.

Growing Profit Margin: U09's current net profit margins (1.7%) are lower than last year (1.9%).


Past Earnings Growth Analysis

Earnings Trend: U09's earnings have grown significantly by 21.3% per year over the past 5 years.

Accelerating Growth: U09's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: U09 had negative earnings growth (-13.8%) over the past year, making it difficult to compare to the Forestry industry average (-4%).


Return on Equity

High ROE: U09's Return on Equity (12.5%) is considered low.


Next Steps

Financial Health

How is Avarga's financial position?


Financial Position Analysis

Short Term Liabilities: U09's short term assets (SGD386.0M) exceed its short term liabilities (SGD243.1M).

Long Term Liabilities: U09's short term assets (SGD386.0M) exceed its long term liabilities (SGD135.2M).


Debt to Equity History and Analysis

Debt Level: U09's debt to equity ratio (57.5%) is considered high.

Reducing Debt: Insufficient data to determine if U09's debt to equity ratio has reduced over the past 5 years.

Debt Coverage: U09's debt is well covered by operating cash flow (40.6%).

Interest Coverage: U09's interest payments on its debt are well covered by EBIT (5x coverage).


Balance Sheet


Next Steps

Dividend

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

2.15%

Current Dividend Yield


Dividend Yield vs Market

Notable Dividend: U09's dividend (2.15%) isn’t notable compared to the bottom 25% of dividend payers in the SG market (2.15%).

High Dividend: U09's dividend (2.15%) is low compared to the top 25% of dividend payers in the SG market (5.04%).


Stability and Growth of Payments

Stable Dividend: U09's dividend payments have been volatile in the past 10 years.

Growing Dividend: U09's dividend payments have increased over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: With its reasonably low payout ratio (34.1%), U09's dividend payments are well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: Insufficient data to determine if a dividend will be paid in 3 years and that it will be covered by earnings.


Next Steps

Management

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

0.8yrs

Average management tenure


CEO

Ian Tong (32 yo)

0.58

Tenure

S$385,000

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 ($USD289.65K) is below average for companies of similar size in the SG market ($USD698.36K).

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


Leadership Team

NamePositionTenureCompensationOwnership
Kooi Tong
Executive officer & Chairman8.67yrsS$1.04m31.73%
SGD 98.9m
Ian Tong
CEO & Executive Director0.58yrS$385.00k0.30%
SGD 938.0k
Hsien Ming Khoo
President of Investment & Power Generation8.5yrsS$33.07kno data
Lai Tai
Group Finance Managerno datano datano data
Lee Huang Ng
Managing Director of Paper Manufacturing0.58yrno data0.0048%
SGD 15.1k
Trent Balog
CEO & President of Taiga Building Products Ltd.no datano datano data
Hui Yee Cheok
Joint Company Secretary1.08yrsno datano data
Sim Ving Lim
Joint Company Secretary1.08yrsno datano data

0.8yrs

Average Tenure

49yo

Average Age

Experienced Management: U09's management team is not considered experienced ( 0.8 years average tenure), which suggests a new team.


Board Members

NamePositionTenureCompensationOwnership
Kooi Tong
Executive officer & Chairman8.67yrsS$1.04m31.73%
SGD 98.9m
Ian Tong
CEO & Executive Director0.58yrS$385.00k0.30%
SGD 938.0k
Chen Peng Loh
Non-Executive Independent Director1.17yrsS$9.22kno data
Lay Hoon Chan
Non-Executive Non-Independent Director1.83yrsS$49.82kno data
Kuat Ho
Lead Independent Director10.42yrsS$70.00kno data
Shin Ein Ng
Independent Director7.75yrsS$70.00k0%
SGD 0
Weng Foong Moey
Independent Director0.58yrno data0.067%
SGD 209.4k

3.8yrs

Average Tenure

58.5yo

Average Age

Experienced Board: U09's board of directors are considered experienced (3.8 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.


Recent Insider Transactions

Ownership Breakdown

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


Top Shareholders

Company Information

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


Key Information

  • Name: Avarga Limited
  • Ticker: U09
  • Exchange: SGX
  • Founded: 1967
  • Industry: Paper Products
  • Sector: Materials
  • Market Cap: S$311.820m
  • Shares outstanding: 930.81m
  • 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

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
U09SGX (Singapore Exchange)YesOrdinary SharesSGSGDJan 1992

Biography

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


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2021/01/16 11:10
End of Day Share Price2021/01/15 00:00
Earnings2020/06/30
Annual Earnings2019/12/31


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.