SGX:S69

Stock Analysis Report

Executive Summary

Serial System Ltd, an investment holding company, distributes electronic and electrical components, and consumer products.

Rewards

Trading at 98.3% below its fair value

Risk Analysis

Has a high level of debt

Unstable dividend track record

Large one-off items impacting financial results

Does not have a meaningful market cap (SGD71M)



Snowflake Analysis

Undervalued with adequate balance sheet and pays a dividend.

Share Price & News

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


Latest Share Price and Events

Stable Share Price: S69 has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

3.9%

S69

0.02%

SG Electronic

0.1%

SG Market


1 Year Return

-12.2%

S69

16.2%

SG Electronic

3.7%

SG Market

Return vs Industry: S69 underperformed the SG Electronic industry which returned 16.2% over the past year.

Return vs Market: S69 underperformed the SG Market which returned 3.7% over the past year.


Shareholder returns

S69IndustryMarket
7 Day3.9%0.02%0.1%
30 Day3.9%3.1%-0.2%
90 Day-1.3%4.9%0.3%
1 Year-4.9%-12.2%22.5%16.2%8.0%3.7%
3 Year-26.5%-43.6%62.0%40.3%17.5%4.9%
5 Year-11.1%-39.2%65.0%33.7%14.2%-4.9%

Price Volatility Vs. Market

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


Simply Wall St News

Valuation

Is Serial System 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: S69 (SGD0.08) is trading below our estimate of fair value (SGD4.64)

Significantly Below Fair Value: S69 is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: S69 is good value based on its PE Ratio (6.9x) compared to the Electronic industry average (12.1x).

PE vs Market: S69 is good value based on its PE Ratio (6.9x) compared to the SG market (13.1x).


Price to Earnings Growth Ratio

PEG Ratio: Insufficient data to calculate S69's PEG Ratio to determine if it is good value.


Price to Book Ratio

PB vs Industry: S69 is good value based on its PB Ratio (0.4x) compared to the SG Electronic industry average (0.9x).


Next Steps

Future Growth

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

20.7%

Forecasted Tech 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 Serial System 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 Serial System performed over the past 5 years?

2.0%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: S69 has a large one-off gain of $12.7M impacting its September 30 2019 financial results.

Growing Profit Margin: S69's current net profit margins (0.8%) are lower than last year (1.1%).


Past Earnings Growth Analysis

Earnings Trend: S69's earnings have grown by 2% per year over the past 5 years.

Accelerating Growth: S69's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: S69 had negative earnings growth (-57.5%) over the past year, making it difficult to compare to the Electronic industry average (-1.2%).


Return on Equity

High ROE: S69's Return on Equity (4.1%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Serial System's financial position?


Financial Position Analysis

Short Term Liabilities: S69's short term assets ($309.0M) exceed its short term liabilities ($211.9M).

Long Term Liabilities: S69's short term assets ($309.0M) exceed its long term liabilities ($11.2M).


Debt to Equity History and Analysis

Debt Level: S69's debt to equity ratio (84.6%) is considered high.

Reducing Debt: S69's debt to equity ratio has reduced from 137.4% to 84.6% over the past 5 years.

Debt Coverage: S69's debt is well covered by operating cash flow (82.7%).

Interest Coverage: Insufficient data to determine if S69's interest payments on its debt are well covered by EBIT.


Balance Sheet

Inventory Level: S69 has a high level of physical assets or inventory.

Debt Coverage by Assets: S69's debt is covered by short term assets (assets are 2.5x debt).


Next Steps

Dividend

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

8.53%

Current Dividend Yield


Dividend Yield vs Market

company8.5%marketbottom25%2.6%markettop25%5.5%industryaverage4.3%forecastin3Yearsn/a

Current dividend yield vs market & industry

Notable Dividend: S69's dividend (8.53%) is higher than the bottom 25% of dividend payers in the SG market (2.56%).

High Dividend: S69's dividend (8.53%) is in the top 25% of dividend payers in the SG market (5.51%)


Stability and Growth of Payments

Stable Dividend: S69's dividend payments have been volatile in the past 10 years.

Growing Dividend: S69's dividend payments have increased over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: With its reasonable payout ratio (58.6%), S69's dividend payments are 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 Serial System's salary, the management and board of directors tenure and is there insider trading?

12.9yrs

Average management tenure


CEO

Derek Goh 0

22.9yrs

Tenure

US$2,992,741

Compensation

Dr. Bak Heng Goh, also known as Derek, BBM, serves as Chief Executive Officer of Serial Microelectronics Korea Limited. Dr. Goh founded Serial System Ltd. in 1988 and has been its Executive Chairman and Gr ...


CEO Compensation Analysis

Compensation vs Market: Derek's total compensation ($USD2.21M) is above average for companies of similar size in the SG market ($USD362.82K).

Compensation vs Earnings: Derek's compensation has increased by more than 20% whilst company earnings have fallen more than 20% in the past year.


Management Age and Tenure

12.9yrs

Average Tenure

Experienced Management: S69's management team is seasoned and experienced (12.9 years average tenure).


Board Age and Tenure

2.8yrs

Average Tenure

56.5yo

Average Age

Experienced Board: S69's board of directors are not considered experienced ( 2.8 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 not been meaningfully diluted in the past year.


Management Team

  • Alex Wui

    Group CFO & Group Company Secretary

    • Tenure: 8.7yrs
  • Derek Goh

    Founder

    • Tenure: 22.9yrs
    • Compensation: US$2.99m
  • Teck Ng

    Senior Vice President of Operations & Asset Management

    • Tenure: 0yrs
  • Jesse Jeng

    President of Serial Microelectronics Inc - Taiwan

    • Tenure: 12.9yrs
  • Lawrence Ho

    President of Serial Microelectronics (Hk) Ltd - Hong Kong & China

    • Tenure: 18.4yrs
  • Sang Kim

    President of Serial Microelectronics Korea Limited - South Korea

    • Tenure: 20.6yrs
  • Sean Goh

    Group Chief Operating Officer

    • Tenure: 0.5yrs
  • Victoria Goh

    Director of Business Development & Marketing

    • Tenure: 0.7yrs

Board Members

  • Cher Yan Ng (60yo)

    Non-Executive & Independent Director

    • Tenure: 2.8yrs
    • Compensation: US$45.00k
  • Derek Goh

    Founder

    • Tenure: 22.9yrs
    • Compensation: US$2.99m
  • Ravi Ramasamy (59yo)

    Non-Executive & Independent Director

    • Tenure: 18.3yrs
    • Compensation: US$45.00k
  • Paul Tan (54yo)

    Non-Executive Lead Independent Director

    • Tenure: 0yrs
    • Compensation: US$45.00k
  • Ser-Luck Teo (50yo)

    Non-Executive Independent Deputy Chairman

    • Tenure: 2.4yrs
    • Compensation: US$62.00k

Company Information

Serial System Ltd's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Serial System Ltd
  • Ticker: S69
  • Exchange: SGX
  • Founded: 1988
  • Industry: Technology Distributors
  • Sector: Tech
  • Market Cap: S$70.772m
  • Shares outstanding: 895.84m
  • Website: https://www.serialsystem.com

Number of Employees


Location

  • Serial System Ltd
  • No. 05-01, Serial System Building
  • 8 Ubi View
  • Singapore
  • 408554
  • Singapore

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
S69SGX (Singapore Exchange)YesOrdinary SharesSGSGDApr 1997

Biography

Serial System Ltd, an investment holding company, distributes electronic and electrical components, and consumer products. It operates in three segments: Electronic Components Distribution, Consumer Produc ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2019/12/14 12:38
End of Day Share Price2019/12/13 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.