Valuemax
$ValueMax (T6I.SG)$ is a traditional pawnshop, gold and jewelry business based in Singapore. Their revenue has been growing since day 1.
The CAGR of revenue in past 10 years is 15%, meaning their revenue doubles every 5 years. Unfortunately, given the small market in Singapore, their valuation always traded at below 1x PB and single digit PE, a typical case of paying 70 sen for a dollar investment thesis.
Recently they listed their subsidiary $WELLCHIP (5325.MY)$ in Malaysia. Despite doing the same level of profit (dollar to ringgit 1 to 1), the valuation of $WELLCHIP (5325.MY)$ traded at 2 times PB and almost 20x PE. Advocate argues that this is justifiable as Malaysian, in general, are “poorer” than Singaporean and Malaysia population is almost 6x of Singapore. Accordingly, the market size in absolute term, will allow $WELLCHIP (5325.MY)$ to grow faster and bigger.
While i will also concur the growth story, i will say the owner is smart to list their Malaysia operations given its much better valuation.
The major shareholder could use the fund raised from IPO and recycle the money back to Singapore to undertake a privatisation of $ValueMax (T6I.SG)$ given its lackluster valuation.
Will they do that? only time will tell.
Disclaimer: Community is offered by Moomoo Technologies Inc. and is for educational purposes only.
Read more
Comment
Sign in to post a comment
Started share investing since 18 years old, still honing the skills for greater good in days to come.
28Followers
27Following
122Visitors
Follow
山芭佬 :![[undefined]](https://static.moomoo.com/nnq/emoji/static/image/default/default-black.png?imageMogr2/thumbnail/36x36 "undefined")