An Analysis on Banyan Tree Holdings

Banyan Tree is listed on Singapore Exchange on 14 June 2006

Financial Data

Year       Eps                Rev                   Net Margin %          Div payout
2013       2.8 -3c (est)                                                                0.651c
2012       1.96c            338.416 mil          4.53%
2011       0.20c            329.492 mil          0.90%                        0.5c
2010       2.10c            305.300 mil          5.00%         
2009       0.40c            313.300 mil          1.00%                      
2008       0.90c            412.600 mil          2.00%                        2.0c
2007       10.8c            421.900 mil          1.90%                        1.78c
2006       3.90c            335.300 mil          8.00%                                      

Average   2.90c                                      5.78%

Other Data (as at 30 Jun 2013)

Debt
      Current  : 156.999 mil
      L.Term  : 234.814 mil
      Total     : 391.813 mil
 
Cash Bal : 131.177 mil

Bonds Issued:  70 mil @ 5.75%  due 31/7/2018
                          70 mil @ 5.5%    due 14/3/2014
                          50 mil @ 6.25%  due 30/5/2017

Shares issued : 760,912,080
Treasury : 490,200

NAV : $0.76

Business Model

A hospitality company that manages spas & hotels. It has 7 areas of business segment namely:

• Hotel investment
• Hotel management
• Spa operations
• Gallery operations
• Hotel residences
• Property sales
• Design and related services

Opinion

Looking at the past data of this company generally tell us that it has very thin margins and their dividends payout are not systematic. The company have taken on bonds issuing to shore up their cash flow and looking at their debt level, probably they need to look at bank overdraft or refinance.

Conclusion

It is great to invest into their bonds as they are paying higher payouts. If you are considering from the point of investing into their ordinary shares, we need to consider the risk of no dividends payout. Thus a margin of safety have to be considered. As of 27 Sept 2013, the share is trading at 68c. The 52 weeks high and low is 52c and 80c respectively. At its current share price, it now has a 10.5% discount to its NAV.

My conclusion is for a trading buy below 65c and to sell around 78c.


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