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Background: 800 Super is the largest, home-grown environmental solutions provider in Singapore. It offers a comprehensive and integrated range of services that includes waste management and recycling, cleaning and conservancy, and horticulture. It is also one of four licensed public waste collectors appointed by the National Environment Agency (NEA).
Recent development: 800 Super became the fourth company to successfully list its initial public offering (IPO) on Catalist this year. The counter made a stellar debut on the first trading day last Friday, rising 43% above its issue price of 22 cents despite weak market conditions.
Key ratios…
Price-to-earnings: 11.0x
Price-to-NTA: 1.8x
Dividend per share / yield: 0.45 cts / 1.8%
Net cash/(debt) per share: 0.34 cts
Net cash as % of market cap: 1.4%
Share price S$0.245
Issued shares (m) 178.8
Market cap (S$m) 43.8
Free float (%) 18.9%
Recent fundraising July 2011 – IPO comprising 30.2m new shares @ $0.22
Financial YE 31 December
Major shareholders Yong Seong – 64.88%, Venstar – 5.11%
YTD change +11.4%
52-wk price range S$0.22-0.34
Our view:
Poised for next phase of growth. 800 Super raised $5.3m in net proceeds from its recent IPO. It plans to use about $2m to increase the capacity of its materials recovery facility and vehicle depot; $1.5m to expand its existing vehicle fleet and equipment, as well as upgrade facilities; and the remaining $1.8m for general working capital requirements.
Focus on public sector projects. The group currently derives more than 40% of its revenue from government departments and statutory bodies, such as the Education Ministry and NEA. In 2005, it clinched its first public waste collection contract, worth about $94.7m, for the Ang Mo Kio-Toa Payoh area.
One of four dominant players. In Singapore, there are only four licensed contractors that are qualified to bid for nine public waste collection contracts that are offered on seven-year terms. They are 800 Super (one contract), Sembwaste (four), Veolia ES (three) and Colex (one).
Ambitious expansion plans. The group is exploring the feasibility of moving into the waste treatment and renewable energy business. It is also looking at potential investments, alliances or acquisitions in overseas markets like India and the Middle East.
Robust orderbook. As at 9 June 2011, 800 Super has an orderbook of about $136.5m of contracts secured. Management intends to pay out at least 20% of net profit as future dividends to shareholders for FY11/12.
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