SGX:U09

Stock Analysis Report

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.

Snowflake

Fundamentals

Undervalued with solid track record.

Share Price & News

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


Latest Share Price and Events


Market Performance


7 Day Return

-1.7%

U09

0.3%

SG Forestry

1.1%

SG Market


1 Year Return

-17.6%

U09

-9.1%

SG Forestry

2.6%

SG Market

Return vs Industry: U09 underperformed the SG Forestry industry which returned -9.1% over the past year.

Return vs Market: U09 underperformed the SG Market which returned 2.6% over the past year.


Shareholder returns

U09IndustryMarket
7 Day-1.7%0.3%1.1%
30 Day-2.9%-2.8%-0.3%
90 Day-11.1%-4.7%-5.9%
1 Year1.5%-17.6%-5.6%-9.1%6.7%2.6%
3 Year-18.1%-38.5%-19.4%-24.5%15.5%3.2%
5 Year3.5%-29.6%9.6%1.9%12.0%-6.6%

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?

>50%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: U09 (SGD0.17) is trading below our estimate of fair value (SGD4.56)

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


Price To Earnings Ratio

PE vs Industry: U09 is good value based on its PE Ratio (5.7x) compared to the Forestry industry average (13.6x).

PE vs Market: U09 is good value based on its PE Ratio (5.7x) compared to the SG market (13.4x).


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 is good value based on its PB Ratio (0.8x) compared to the XA Forestry industry average (0.8x).


Next Steps

Future Growth

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

-2.1%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: U09's earnings are forecast to decline over the next 3 years (-2.1% per year).

Earnings vs Market: U09's earnings are forecast to decline over the next 3 years (-2.1% per year).

High Growth Earnings: U09's earnings are forecast to decline over the next 3 years.

Revenue vs Market: Insufficient data to determine if U09's revenue is forecast to grow faster than the SG market.

High Growth Revenue: Insufficient data to determine if U09's revenue is forecast to grow faster than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: Insufficient data to determine if U09's Return on Equity is forecast to be high in 3 years time


Next Steps

Past Performance

How has Avarga performed over the past 5 years?

21.3%

Historical annual earnings growth


Earnings and Revenue History


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 earnings growth over the past year (67.9%) exceeds its 5-year average (21.3% per year).

Earnings vs Industry: U09 earnings growth over the past year (67.9%) exceeded the Forestry industry 14.3%.


Return on Equity

High ROE: U09's Return on Equity (13.9%) is considered low.


Return on Assets

ROA vs Industry: U09 has a higher Return on Assets than the Forestry industry average last year.


Return on Capital Employed

ROCE Improving: U09 has significantly improved its Return on Capital Employed over the past 3 years.


Next Steps

Financial Health

How is Avarga's financial position?


Financial Position Analysis

Short Term Liabilities: U09's short term assets (SGD380.0M) exceeds its short term liabilities (SGD262.7M)

Long Term Liabilities: U09's short term assets (380.0M) exceeds its long term liabilities (159.2M)


Debt to Equity History and Analysis

Debt Level: U09's debt to equity ratio (81.3%) is considered high

Reducing Debt: U09's debt to equity ratio has increased from 0.4% to 81.3% over the past 5 years.

Debt Coverage: U09's debt is well covered by operating cash flow (44.2%).

Interest Coverage: U09's interest payments on its debt are well covered by EBIT (4x coverage).


Balance Sheet

Inventory Level: U09 has a high level of physical assets or inventory.

Debt Coverage by Assets: U09's debt is covered by short term assets (assets are 1.9x debt).


Next Steps

Dividend

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

20.71%

Current Dividend Yield


Dividend Yield vs Market

company20.7%marketbottom25%2.5%markettop25%5.7%industryaverage2.9%forecastin3Yearsn/a

Current dividend yield vs market & industry


Stability and Growth of Payments

Notable Dividend: U09's dividend (20.71%) is higher than the bottom 25% of dividend payers in the SG market (2.54%).

High Dividend: U09's dividend (20.71%) is in the top 25% of dividend payers in the SG market (5.69%)

Stable Dividend: Whilst dividend payments have been stable, U09 has been paying a dividend for less than 10 years.

Growing Dividend: U09's dividend payments have increased, but the company has only paid a dividend for 9 years.


Current Payout to Shareholders

Dividend Coverage: With its high payout ratio (100.8%), U09's dividend payments are not 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

What is the CEO of Avarga's salary, the management and board of directors tenure and is there insider trading?

7.3yrs

Average management tenure


CEO

Kooi Ong Tong (60yo)

7.4yrs

Tenure

S$833,889

Compensation

Dr. Kooi Ong Tong has been an Executive Chairman and Chief Executive Officer of UPP Holdings Limited since May 2012. Dr. Tong is the Owner at The Edge Publishing Pte Ltd. He serves as the Chief Executive O ...


CEO Compensation Analysis

Compensation vs. Market: Kooi Ong's total compensation ($USD612.19K) is about average for companies of similar size in the SG market ($USD269.41K).

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


Management Age and Tenure

7.3yrs

Average Tenure

60yo

Average Age

Experienced Management: U09's management team is seasoned and experienced (7.3 years average tenure).


Board Age and Tenure

6.5yrs

Average Tenure

60yo

Average Age

Experienced Board: U09's board of directors are considered experienced (6.5 years average tenure).


Insider Trading

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


Ownership Breakdown


Management Team

  • Kooi Ong Tong (60yo)

    Executive Chairman & CEO

    • Tenure: 7.4yrs
    • Compensation: S$833.89k
  • James Koh (61yo)

    President of Paper Manufacturing

    • Tenure: 11.5yrs
    • Compensation: S$379.51k
  • Trent Balog

    CEO & President of Taiga Building Products Ltd.

    • Tenure: 0yrs
  • Lai Yeen Tai

    Group Finance Manager

    • Tenure: 0yrs
  • Ian Tong

    Executive Director

    • Tenure: 2.6yrs
    • Compensation: S$329.01k
  • Kevin Khoo (48yo)

    President of Investment & Power Generation

    • Tenure: 7.3yrs
    • Compensation: S$283.80k
  • Selena Leong

    Company Secretary

    • Tenure: 0.3yrs

Board Members

  • Kooi Ong Tong (60yo)

    Executive Chairman & CEO

    • Tenure: 7.4yrs
    • Compensation: S$833.89k
  • Kalimullah Bin Masheerul Hassan (61yo)

    Independent Director

    • Tenure: 6.5yrs
    • Compensation: S$70.00k
  • Lay Hoon Chan (55yo)

    Non Executive Non-Independent Director

    • Tenure: 0.6yrs
  • Gary Ho (64yo)

    Lead Independent Director

    • Tenure: 9.2yrs
    • Compensation: S$70.00k
  • Shin Ein Ng (44yo)

    Independent Director

    • Tenure: 6.5yrs
    • Compensation: S$70.00k
  • Ian Tong

    Executive Director

    • Tenure: 2.6yrs
    • Compensation: S$329.01k

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$162.896m
  • Shares outstanding: 947.07m
  • 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 Analysis2019/10/23 12:34
End of Day Share Price2019/10/23 00:00
Earnings2019/06/30
Annual Earnings2018/12/31


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.