Bukit Sembawang Estates Limited Financial Analysis: Net Profit Increased by 149%

Business Description

Bukit Sembawang Estates Limited is primarily engaged in property development, investment holding, and hospitality. The company develops residential properties for sale, manages office buildings and investments, and owns serviced apartment units. All business operations are based in Singapore.

Industry Position and Market Share

Bukit Sembawang Estates Limited operates within the real estate development industry in Singapore. While the report does not provide specific details about competitors or market share, the company is influenced by market factors such as property demand, interest rates, and government regulations on property purchases.

Revenue Streams and Customer Base

The company’s revenue streams include income from property development, hospitality services, and rental income. The primary customers are property buyers and tenants in Singapore. The company has a competitive advantage in its established presence and ongoing development projects.

Financial Statement Analysis

Income Statement

For the half-year ended 30 September 2024, the company reported a revenue increase of 23% to \$324,023,000 compared to the same period in the previous year. The net profit after tax increased by 149% to \$62,924,000, driven by higher profit recognition from development projects [[3]].

Balance Sheet

As of 30 September 2024, the total assets increased to \$1,626,012,000, a 1.7% increase from 31 March 2024. This was mainly due to increased contract assets and cash and cash equivalents, offset by decreased deferred tax assets and development properties [[4]]. The total liabilities increased by 7.5% to \$84,597,000, mainly due to increases in deferred tax liabilities and trade payables [[4]].

Cash Flow Statement

The company recorded a net cash inflow of \$84,351,000 for the half-year ended 30 September 2024 compared to \$62,612,000 in the same period in 2023. The net cash generated from operating activities was \$127,353,000, reflecting strong sales proceeds from development projects [[7]].

Dividends

During the period, the company paid out a final dividend of \$0.04 per share and a special dividend of \$0.12 per share, totaling \$41,425,000 [[14]].

Key Findings and Recommendations

The company’s financial performance shows significant growth in revenue and net profit, driven by successful development projects and increased interest income. However, the increase in liabilities and reliance on the property market pose potential risks.

Strengths

• Substantial increase in net profit by 149% [[3]].
• Strong cash flow generated from operating activities [[7]].
• Significant dividends paid out, indicating financial stability [[14]].

Risks

• Increased liabilities, particularly deferred tax liabilities [[4]].
• Market sensitivity to property demand and interest rates [[18]].

Special Activities

The company is focusing on timely completion of ongoing projects and adopting prudent approaches for future project launches [[18]].

Investor Recommendations

If Holding the Stock

Investors currently holding the stock should consider maintaining their position due to the company’s strong profit growth and stable dividend payouts. However, they should monitor the market conditions and the company’s liability management closely.

If Not Holding the Stock

Potential investors should consider buying the stock given the company’s solid financial performance and growth prospects. However, they should be aware of the potential risks related to market sensitivity and increased liabilities.

Disclaimer

This analysis is based on the unaudited financial statements for the half year ended 30 September 2024. Investors should perform their own due diligence and consider their financial situation before making any investment decisions.