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Saturday, February 27, 2016

(ValueGrowthInvesting) A look at SHH's 2nd quarter results

(ValueGrowthInvesting) A look at SHH's 2nd quarter results

Author: ValueGrowthInvestor | Publish date: Fri, 26 Feb 2016, 09:40 AM

The set of results is nothing short of amazing. Per my earlier posts, data do not lie. If the data is there, the results will follow and looking at current data which I will share with you soon, SHH's prospects are bright (mildly speaking). Safe to say, investors (not traders) can expect a healthy dividend soon for a record breaking year.

What impresses me most about SHH apart from its earnings growth is its cashflow. It generated RM15m in operating cashflow and RM13m in free cash flow! That means that at market cap of RM100m, shareholders just got back RM13m (13%) of their investment in COLD HARD CASH in only 6 months. Think about that for a moment, 13% return in cash in 6 months. Pretty sweet.

Next is SHH's valuation. Annualizing first half results, you end up with a PE of 5.76 times. Even more interestingly, SHH has a cash hoard of 60 cents (30% of its share price is in COLD HARD CASH). If you strip out the cash, SHH is trading at only 4 times PE. I don't think you can find another stock on Bursa trading at that valuation, offering the kind of growth SHH offers with the same quality (operating cash flow, free cash flow, ROE, net profit margin, properties last revalued in 1994).

However, the markets are always forward looking. Will SHH continue its growth trajectory? The short answer is Yes. The long answer and its elaborations I will share with you in my next blog posting.

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