28 Cm Dive into Engro Corporation (SGX: S44)

As the title suggest, it will be a shallow 28 cm dive into Engro Corporation as a CNY Post.

CNY is a good time for gambling, one of the higher risk stocks that i have screened stocks is the company below.

At a Trailing PE of 13 and book value of 0.48 , Engro Corporation looks attractive in price to book terms and might have attracted some value hunters to take a look at it.

Ownership

Largely owned by Afro-Asia with ties to Ho Bee Investments. In other words, the ownership is the same as the ones who owned Ho Bee Land. In this aspect, the ownership definitely has  credibility as Ho Bee Land has 1.64B Market Cap.

In fact, the company has paid a dividend in the past 5 years. However, equity has stagnated since 2020 and profits are actually lumpy.

Business

I will break their business into 4 parts.

1) Polymer ( Owned Operations in Singapore and Indonesia)

JV in China. 

Owned Operations contribute around 4% of revenue. Its SG and Indo Operations continues to be affected as its SG Plant faces oversupply of polypropylene and Indo plant has just set up in 2024 and mass production/ customer traction takes time. Fortunately, the JV in China has turned profitable in FY 2024 and has carried the momentum in 2025 1H.

For this segment, making around 1m for 2025 would be ideal.

2) Specialty Cement (China)

This is listed under JV of Cement and Building Materials

In 2023 and 2024, it has recorded huge writedowns and losses of  9.2m and 6.9m. In fact i am not optimistic about this portion as it is largely exposed to the poor housing market in China.

Whether this gets written down further in 2H 2025.........well depends on the performance of the joint ventures.

There is only 33.64 million left to be write-off.  In fact, i will not count this under the book value for now unless the company show that they have turned around operations.

From the looks of 1H 2025 where negative profits from JV under Cement is seen, i highly doubt so.

3) Investments

Largely Technology Focused Investments into VCs.

57% into Venture Capital Funds ,15% in equities, 17% in Investment Funds.

While the net change in financial assets was 6m in 1H 2025, representing roughly 7% gain, a longer time horizon has to be studied.

Unfortunately, since 2021, the overall is a loss. Having said that, tech has been a good performer in 2H 2025.  What is admirable is that despite an overall loss, the company remains confident in putting more money into investments.

Given that some of its names that it has revealed in the 2024 annual report has seen gains in valuation. I believe this could be reflected in 2H 2025 as i believe the fair value gain of not even 1% in 1H 2025 does not seem to reflect the headlines.

4) Singapore and Malaysia Cement. 

Finally I am at the part where i think the company golden goose is and has done well in the past few years.

The company does concrete and ready-mix concrete. It is one of the 14 players in Singapore that does ready-mix

Among the bigger players (classified as those with L6 and no limits on tendering) it is 1 of 7 such players.

The other names (some might be familar with) are Pan United (Listed), Sinmix (Under Lian Beng which was previously listed), Island Concrete (Part of Hong Leong Asia), Alliance Concrete (JV between Msia YTL Cement and TW Asia Cement) , Huation Contractor (Part Of Huationg Global which is listed)

Now that the introduction is over, lets take a look at the financials.

2H 2025 tend to have better revenue and in the 22,23,24 have shown better profitability than their 1H counterparts. 

1H 2025 Segment Result of 7.2m is also their best result in the past 5 years 1H. 

Looking at BCA Data, 2H 2025 has outperformed 1H by 22%.    

2026 Demand looks solid as well with 3% to 10% growth estimated.

2025 Actual came in at the top end of its 2025 forecast.

Following the data above, we could see higher revenue and earnings from this segment.

Maybe 10m in segment result?

Valuation Review

By Book Value, stripping off the China Specialty Cement JV and the China Associate (involved in property development) which is 33.64 million. The Book Value Per Share is $1.87. 

Implying a PB of 0.56.

If Pan United can trade at a PB of 3.25 , i think its fair to say Engro is undervalued by PB.

Looking at Engro's Balance Sheet, 62m of cash against 44.4m of current liablity. 

57m of receivables means that Cash + Receivables(119.6m) cover the whole of liablities (71.5m)

Worth noting that much of liablities is lease liablities and borrowings is only 9m (3% of assets)

The financial health is pretty solid.

Looking at earnings, if Pan United is valued by research brokers at 14x PE Forward Earnings,

I think Engro's Singapore and Malaysia cement can make around 9.5m net profit in FY 2025.

This implies that the cement segment alone is valued at 133m ( and is above its current valuation of 123.45m).  The investments of 70+m is literally free along with a China JV that has turned around. (the rest is not as worthwhile)

Conclusion

Although high risk (due to the potential write-offs as well as other potentially poor business segments) and net asset value has fell since 2021 as i think that the relatively low book to value and potential earnings in cement and investments makes it look somewhat attractive.

 

Previewing Dream International (Hkex:1126) FY 2025 Results

 As per previous post, i will write the conclusion first. 

I believe that earnings will be around -10% to 20% of FY 2024. As such, in March, we are unlikely to see a positive profit alert. EPS should come in at around 98 cents to 129 cents. This implies a 2H 2025 EPS range of 53 cents to 84 cents.

1H 2025 has seen an improvement of results due to Positive Yen Movement against the USD. However, this has reversed in 2H 2025.

However, i have been proven wrong in my analysis at times so its hard to be 100% right.

Revenue in FY 2025 should beat FY 2024 but Gross Profit Margin should be lower.

(Popmart is now a customer but traction needs to be tracked)

From the 1H 2025 Results Release, it is well understood that they have new customers and full utilisation. 

As such, based on the 40k workers mentioned, i think revenue has a chance to hit 3.5 to 4 billion in 2H 2025.

However, management has mentioned that new orders tend to have lower margin as the orders are lower and more standardisation would result in better margins. In a smartkarma report, they mentioned that management mentioned they will look to improve margins in 2026. This made me believe that margins are still likely depressed.

This means that current customers which has a sizable revenue increasing their orders is more likely than a new customer.

To give an example, 2023 had better margins than 2024

Top 4 customers in 2024 accounted for 67% of the revenue

Top 4 customers in 2023 accounted for 68% of the revenue

With more revenue coming in 2H 2023 but a lower margin is recorded, we could think about how the reduction of Customer B from 1.1B to 770M has hurt the margins.

Customer B from my research is likely Funko

Customer A is likely Disney

Customer C or D is likely Spinmaster / OLC / Bandai / Hasbro

My estimation of the revenue should be as follows.

Segment	Revenue	Level of Confidence (1 to 10)
Disney (Shanghai and Hong Kong)	Positive (+5% to +20%)	6
Oriental Land (Disney Japan)	Negative (-10% to 20%)	8
Funko	Negative (-10% to 20%)	8
Hasbro	Negative (Hard to assess)	5
Spinmaster	Negative (-5% to 10%)	5
Bandai Namco	Positive (5% to 20%)	3

Reasons for the above estimation

Disney - Strong Revenue for International Park , Visitorship to Shanghai is stronger in 2H 2025 vs 2H 2024

Oriental Land - Inventory Level Falling while merchandise revenue gain is not sufficient to make up the shortfall

Funko - Q3 2025 Inventory and revenue lower than Q3 2024. Inventory drop from Q2 2025 to Q3 2025 compared to increase in Q2 2024 to Q3 2024.

Hasbro - Inventory Fall quite significant. But too much product lines makes assessing revenue difficult

Spinmaster - Monster Jam weaker in Q3 2025

Bandi Namco - Positive Inventory Increase + One Piece Strong Performance.

As a result, i think that the customer diversification effect will be even stronger in FY 2025 which will in turn affect margins. It will be interesting to see how many customers account for at least 10% of revenue and if there is any new customers.

Possible Reasons for Analysis to be wrong (Leading to better profit growth or even positive profit announcement)

1) Winning Orders from current customers due to shift in manufacturing to Vietnam

2) Improved Margins seen due to economies of scale

3) Stronger than expected revenue from Disney China and Shanghai

4) New Customer Orders is strong and becomes a huge % of revenue

Possible Reasons for Earnings to be lower in 2H 25 vs 2H 24

1) Margins Erode due to New Customer and Diverse Orders

2) Other Income affected by JPY Weakening vs

3) Japan Theme Park Weakened in Revenue and is the strongest part of earnings margin

4) 3 Rounds of Raising Salary in Vietnam with 2 rounds being in 2025 and around 7% to 10% per increase eating into margins

(January 2026 Results) How i would invest in the singapore stock market if i had 100k of spare money

 

January 2026 Returns: 12.31%

Year to Date Returns: 12.31%

Since Inception (9 Sept 2020) Returns: 430.09%

Main drag in returns comes from GKE. Apart from that, all other stocks showed positive performance. 

GKE Results is kinda crap. The cement segment fell way short of my expectations. I will be surprised if it can be spun off.

Hong Leong Asia is the best performer in January. The recent listing of China Yuchai's major subsidiary on Hkex is actually a positive news. The key highlight is the 9 months results of its major subsidiary showing profit growth that is larger than the 6 months results.

Nam Lee - I wrote about the AGM here on investingnote. Interested folks can read on it.

Following this, i will be making a switch again to the portfolio to attempt a 'front-load'. Of course, i am not saying 12% isn't good enough but i will just continue to try to generate higher returns.

Engro is added while GKE is removed.

I must be crazy because GKE recorded bad results in China Cement Sector and i am going back to a company with high exposure in China and in similar sector.

But i think Engro is cheap when i strip off its China related assets (which are bound to be underperforming in 2H 2025 due to peers showing bad results and the flooding which may affected the already bad construction demand). 

The vc assets and singapore/ msia cement is still strong and really under valued by market.

(Long Post) Another 5 HK Stocks Screened for Front Loading

(What is the huat tip this time? Huh? U sure this will huat or not?) 

(Just joking, the context of the photo is that the musical cast has to pick a paper aeroplane and read the message by left by fans)

Frontloading refers to buying-in anticipating that results would be good. 

It is an extremely risky way of purchasing shares. 

I am actually not sure how many investment writers / youtubers books will actually write like that or share such content.

In fact, whenever i want to frontload, it reminds me of a life story. 

In one of the job interviews, at an IFA company for an investment and admin role, i pitched a stock and i was told that i am actually a 'frontloader / cyclical investor that looks to get in for a gain of 20 to 30% before disposing the stock' I think the stock i pitched was Tat Seng Packaging. It triggered a mini bulb in my head that if i can keep doing this then won't it be amazing.

October 2019: 0.49

September 2021 : 0.77

Dividend Received: 0.04

Total Returns: 65% over 2 years.

Surprisingly, after roasting me so bad. I made it to the final round. Maybe they need 3 people to make it and choose 1.

In the final round, i was asked to pitch a stock again to a different guy. 

I decided to pitch a deep value stock this time.  

October 2019: 2.75

May 2022: 3.50

Dividends: 0.41

Total Returns: 42%

The idea must have been bad to the director as i did not manage to clear the second round and join the company. The 42% return turned out to be relatively poor as well if i held it to the end (which i did actually).

Back to the main topic, to do many Financial Analysis (FA) and learn from it and then review from any mistakes and keep doing FA is kinda fun and keeps me on my toes so i can keep tabs on different companies. It also serves as a list that i can refer to if i need ideas.

For Folks who have not read the previous post which was frontloading for companies that report results on 30 September 2025, you can read it here. 

The previous result is as follows

(HSI Returned around -0.5% during the period)

Moving on, now we look towards front-loading for 31 December 2025. 

Before going on to the list, i will talk about a few stocks that i have took a look but it did not hit my list.

Zengame (Hkex: 2660) - Revenue should be on par or 5 to 10% better than 1H but having distributed a good dividend in 1H and unsure on strategy of marketing spending which affects profitability, it did not fill the list.

BHCC Construction (Hkex 1552) - Any SG Construction Stocks with less than 5 PE would be interesting given the valuations seen in SGX. Company has performed better in margins for 1H 2025 and current orders to be fufilled in the upcoming year is 7% higher than last year.

My main concern is their industrial property development segment (Food Point is not selling well as a search seems to indicate 60% sold) along with the relatively high gearing.

Of course there is the competition from Powermatic's Food Industrial Property which has much lower base cost as well.

IGG (Hkex: 799) - Would have make the list but New Game results remains low grossing even though it has hit a higher ranking in December. Current games have poorer ranks compared to 1H so a lot of growth and profitability has to be driven from advertising which is a black box . Encouraging sign is that the share buyback has continued throughout the 2H.

Bamboos Health (Hkex: 2293) - Gold Price surge should provide a good other income gain if they held on to their gold investments. Its too hard to gauge or estimate the revenue from staffing although in a recent interview they say it would be better and longer term it would be higher as the staffing is supposed to increase and the drop is temporary.

The list is as follows 

1. Nagacorp (Hkex: 3918)

2. San Miguel Brewery (Hkex: 236)

3. Perennial Intl (Hkex: 725)

4. Chuan Holdings (Hkex: 1420)

5. Mainland Headwear Holdings (Hkex: 1100)

1. Nagacorp (Hkex: 3918)

I think that this is probably the hardest out of the 5 to estimate. Given that this is a tourism stock and there is probably a lot of news that comes out every day.

In 2025 1H, it has seen a rebound in its results as chinese tourist has came in and mass market margins which is better already in 1H has also improved in revenues in 3Q.

Tourism numbers remained strong in October and November as well

The downside is that when we think of Cambodia, there is more bad news than goods news. 

This will still prove to be a stumbling block although tourism numbers for 2025 for Chinese to Cambodia is up 40%.

All in all, results might be able to surprise on the upside and core earnings should be below a PE of 10 (which is reasonable in my senses).

2. San Miguel Brewery (Hkex: 236)

Investing Thesis: Surely this year earnings will be better?

I think the biggest problem with this company will be balancing their international revenue which is a main driver of their income.

2024 was a slight dissapointment as they had to impair their factory and if that was excluded, results would have been slightly better.

This was boosted by their steady revenue they secured from a long 10 to 15 years lease out of their building.

In 1H 2025, they have turned around the margins. 

In 2H 2024, they are actually unprofitable in terms of normal business operations, turning profitable due to the rental income and then once again unprofitable as a whole due to the write off.

Interesting to see if this impairment will make margins better or if any boost in international revenue can let them find the break-even point. But the normal case is that even if it is unprofitable by a little bit, the rental income will cover.

I think 75 million should be do-able. That is around 19 cents EPS and around 6+ PE .

At, 0.68 book value and 26% of market cap being cash, this is probably the deep book value investor's paradise.

How high this can go will depend on the dividend / 2H Company Operations.

3. Perennial Intl (Hkex: 725)

A company that produces wires and power cords for electrical appliances with majority of revenue going to US.

It is a company that has benefitted from 1H as there is a surge in demand due to front ordering.

Also, margins have improved from 2023 up till 2025.

Perhaps 2H 2025 might not generate the same amount of profit as 1H 2025 but i think it will not be as bad as there has been hiring in Vietnam despite only having 880 Staff.

Also, productivity improvements and shift to Vietnam would be beneficial to the company as well. Shows that it is able to handle increase in demand well.

As such, i feel that there is a chance this company does well. With no gearing, it looks relatively on the safer side as well.

4. Chuan Holdings (Hkex: 1420)

Moving on to a Singapore Construction Stock, i think this is a very interesting stock if we strip off the 2 negatives.

A. Not paying a dividend.

B. Rights Issue in 2023 and Interested Person Transaction Acquisition in 2024.

Why this stock is interesting.

A. Improving Earthworks Margin

B. Acquiring of Dormitory 

The company made an Interested Party Transaction by acquiring a dormitory from its major shareholder for around 46 million.

Considering that this announcement is in Feb 2024 and the rental income is low while latest lease expires only in April 2025, i think there is much upside to it.

Adding to that, rental income has already contributed to the bottomline in 1H 2025.

With only 654 employees, the securing of this 

C. Improving Orderbooks

Worth noting that the recent orderbook wins are also mostly in Earthworks which is the better margin.

D. Tender Victory for Dorm

While unsure how large this dormitory is, the lease price paid by the company is close to 2 times of its previous tender for a 1008 bed.

This might be an opportunity to expand profitability if done well.

With only 654 employees, the dorm tender along with the dorm acquisition in 2024 provides good headspace for increased headcount and also cost savings if needed.

5. Mainland Headwear Holdings (Hkex: 1100)

Recovery in Earnings driven by Improved Bangaladesh Operations, Mexico Operations and Lack of 1 Off Settlement due to scaledown of China Operations.

Probable double digit increase in revenue.

The company made 13.8 cents EPS in 1H 25. Unfortunately, exports from Bangaladesh to US in 2H 2025 is around the same as 1H 2025 so lets hope that they are able to maintain this revenue. 

My estimation is that they might make lesser than 13.8 cents as 1H Margins might be higher due to some panic ordering. Around 10 to 11 cents might be possible. This brings the PE of around 6. There will definitely be a positive profit announcement, its just what is the amount earned in 2025.

The company has one of the biggest cap factories in Bangaladesh and has a town built around it. As such, to say its capacity is one of the largest would probably be true.

As for longer term, a storage warehouse will be built beside their Mexico estimated to be operational in 2H 26. Also, they have decided to turn the Shenzhen land into a e-commerce industrial park.

The worry is that its acquisitions in its trading business have been losses so hopefully all these implementations and investments turns the business around and becomes a new profit driver.

Though if Mexico does turn profitable, then having a profitable factory in Mexico after 2 years and an increasing profitability huge factory in Bangladesh really shows good foresight and entrepreneurship in the owners.