SGX:O10

Stock Analysis Report

Executive Summary

Far East Orchard Limited, an investment holding company, engages in property development and investment activities in Singapore, Australia, New Zealand, the United Kingdom, and internationally.

Rewards

Earnings grew by 30.4% over the past year

Risk Analysis

Earnings have declined by -8.3% per year over past 5 years

Dividend of 5.08% is not well covered by earnings

Large one-off items impacting financial results

Shareholders have been diluted in the past year



Snowflake Analysis

Acceptable track record unattractive dividend payer.


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Share Price & News

How has Far East Orchard's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: O10 has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

0%

O10

1.4%

SG Real Estate

0.8%

SG Market


1 Year Return

-3.3%

O10

1.4%

SG Real Estate

2.2%

SG Market

Return vs Industry: O10 underperformed the SG Real Estate industry which returned 1.1% over the past year.

Return vs Market: O10 underperformed the SG Market which returned 2.1% over the past year.


Shareholder returns

O10IndustryMarket
7 Day0%1.4%0.8%
30 Day1.7%4.4%2.5%
90 Day2.6%6.8%5.3%
1 Year1.5%-3.3%4.5%1.4%6.4%2.2%
3 Year-8.4%-19.3%8.4%-0.3%17.4%4.8%
5 Year-14.1%-29.6%-1.0%-13.7%12.9%-6.1%

Price Volatility Vs. Market

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


Simply Wall St News

Valuation

Is Far East Orchard undervalued compared to its fair value and its price relative to the market?

18.28x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Below Fair Value: O10 (SGD1.18) is trading above our estimate of fair value (SGD0.91)

Significantly Below Fair Value: O10 is trading above our estimate of fair value.


Price To Earnings Ratio

PE vs Industry: O10 is poor value based on its PE Ratio (18.1x) compared to the Real Estate industry average (10.3x).

PE vs Market: O10 is poor value based on its PE Ratio (18.1x) compared to the SG market (13.5x).


Price to Earnings Growth Ratio

PEG Ratio: Insufficient data to calculate O10's PEG Ratio to determine if it is good value.


Price to Book Ratio

PB vs Industry: O10 is good value based on its PB Ratio (0.4x) compared to the SG Real Estate industry average (0.5x).


Next Steps

Future Growth

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

5.4%

Forecasted Real Estate 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 Far East Orchard 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 Far East Orchard performed over the past 5 years?

-8.3%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: O10 has a large one-off gain of SGD17.2M impacting its September 30 2019 financial results.

Growing Profit Margin: O10's current net profit margins (18.8%) are higher than last year (14.5%).


Past Earnings Growth Analysis

Earnings Trend: O10's earnings have declined by -8.3% per year over the past 5 years.

Accelerating Growth: O10's earnings growth over the past year (30.4%) exceeds its 5-year average (-8.3% per year).

Earnings vs Industry: O10 earnings growth over the past year (30.4%) exceeded the Real Estate industry -7.2%.


Return on Equity

High ROE: O10's Return on Equity (2.3%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Far East Orchard's financial position?


Financial Position Analysis

Short Term Liabilities: O10's short term assets (SGD437.5M) do not cover its short term liabilities (SGD444.9M).

Long Term Liabilities: O10's short term assets (SGD437.5M) do not cover its long term liabilities (SGD671.4M).


Debt to Equity History and Analysis

Debt Level: O10's debt to equity ratio (33.6%) is considered satisfactory.

Reducing Debt: O10's debt to equity ratio has increased from 9.1% to 33.6% over the past 5 years.

Debt Coverage: O10's debt is not well covered by operating cash flow (3.1%).

Interest Coverage: O10's interest payments on its debt are not well covered by EBIT (2.4x coverage).


Balance Sheet

Inventory Level: O10 has a high level of physical assets or inventory.

Debt Coverage by Assets: O10's debt is covered by short term assets (assets are 1.1x debt).


Next Steps

Dividend

What is Far East Orchard's current dividend yield, its reliability and sustainability?

5.04%

Current Dividend Yield


Dividend Yield vs Market

company5.0%marketbottom25%2.4%markettop25%5.4%industryaverage3.1%forecastin3Yearsn/a

Current dividend yield vs market & industry

Notable Dividend: O10's dividend (5.08%) is higher than the bottom 25% of dividend payers in the SG market (2.5%).

High Dividend: O10's dividend (5.08%) is low compared to the top 25% of dividend payers in the SG market (5.41%).


Stability and Growth of Payments

Stable Dividend: O10's dividend payments have been volatile in the past 10 years.

Growing Dividend: O10's dividend payments have increased over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: With its high payout ratio (92.2%), O10'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 Far East Orchard's salary, the management and board of directors tenure and is there insider trading?

5.0yrs

Average management tenure


CEO

Alan Tang 0

0yrs

Tenure

0

Mr. Yew Kuen Tang, also known as Alan, serves as Group Chief Executive Officer and Executive Director at Far East Orchard Limited since January 1, 2020. He brings with him a rich and balanced experience in ...


Management Age and Tenure

5.0yrs

Average Tenure

58yo

Average Age

Experienced Management: O10's management team is seasoned and experienced (5 years average tenure).


Board Age and Tenure

3.0yrs

Average Tenure

61yo

Average Age

Experienced Board: O10's board of directors are not considered experienced ( 3 years average tenure), which suggests a new board.


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

Dilution of Shares: Shareholders have been diluted in the past year, with total shares outstanding growing by 2.3%.


Management Team

  • Philip Ng (60yo)

    Strategic Advisor

    • Tenure: 7yrs
  • Chong Chee Lui (58yo)

    • Compensation: S$35.00k
  • Arthur Kiong (58yo)

    Chief Executive Officer of Far East Hospitality

    • Tenure: 7.3yrs
  • Brian Stampe

    Head of Operations - Far East Hospitality

    • Audrey Phua

      Company Secretary

      • Tenure: 3.1yrs
    • Joanna Gok

      Chief Financial Officer

      • Tenure: 2yrs
    • Renee Goh

      Assistant Manager of Investor Relations

      • Alan Tang

        Group CEO & Executive Director


        Board Members

        • Jennie Chua (74yo)

          Non-Executive Lead Independent Director

          • Tenure: 2.8yrs
          • Compensation: S$99.71k
        • Ramlee Bin Buang

          Non-Executive Independent Director

          • Tenure: 2.8yrs
          • Compensation: S$77.61k
        • Boon Hwee Koh (68yo)

          Non-Executive Chairman

          • Tenure: 7yrs
          • Compensation: S$77.50k
        • Kah Sek Koh (47yo)

          Non-Executive Director

          • Tenure: 3.2yrs
          • Compensation: S$42.50k
        • Diana Ee (61yo)

          Non-Executive Independent Director

          • Tenure: 8.8yrs
          • Compensation: S$108.00k
        • Shailesh Ganu (37yo)

          Non-Executive Independent Director

          • Tenure: 0.9yrs
        • Alan Tang

          Group CEO & Executive Director

          Company Information

          Far East Orchard Limited's company bio, employee growth, exchange listings and data sources


          Key Information

          • Name: Far East Orchard Limited
          • Ticker: O10
          • Exchange: SGX
          • Founded: 1967
          • Industry: Diversified Real Estate Activities
          • Sector: Real Estate
          • Market Cap: S$521.648m
          • Shares outstanding: 438.36m
          • Website: https://www.fareastorchard.com.sg

          Location

          • Far East Orchard Limited
          • Orchard Rendezvous Hotel
          • 1 Tanglin Road No. 05-01
          • Singapore
          • 247905
          • Singapore

          Listings

          TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
          O10SGX (Singapore Exchange)YesOrdinary SharesSGSGDJan 1992
          O5PDB (Deutsche Boerse AG)YesOrdinary SharesDEEURJan 1992

          Biography

          Far East Orchard Limited, an investment holding company, engages in property development and investment activities in Singapore, Australia, New Zealand, the United Kingdom, and internationally. It primarily develops residential, commercial, hospitality, and purpose-built student accommodation properties. The company also owns and operates hospitality assets, including hotels. In addition, its portfolio includes medical suites in Novena Medical Center and Novena Specialist Center. The company was formerly known as Orchard Parade Holdings Limited and changed its name to Far East Orchard Limited in July 2012. The company was founded in 1967 and is headquartered in Singapore. Far East Orchard Limited is a subsidiary of Far East Organisation Pte Ltd. 


          Company Analysis and Financial Data Status

          All financial data provided by Standard & Poor's Capital IQ.
          DataLast Updated (UTC time)
          Company Analysis2020/01/18 12:42
          End of Day Share Price2020/01/16 00:00
          Earnings2019/09/30
          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.