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sykn wrote: Ha ha, the intrinsic value, of course depends on the assumptions you put into the calculations in the first place, and is no rocket science. I used DCF on Owner's Earnings (OE) as Warren Buffett defines it, with OE based on 4 years' growth at a rate of 9% (already quite conservative if you look at its track record over the last 5 years), and then growing at 3% to perpetuity. That gives me a value of $1.21. But of course, you can also look at what the analysts at CIMB and OCBC calculated which come to $0.64. I personally think that their calculations are too pessimistic because the rate of CSE's cash generating ability remains the same after its sale of Servelec even though its equity base is reduced by around 30%. Once they land with a few more projects in FY14, I believe that its earnings will fly, but that is my humble opinion. Of course, being a newbie, I am open to criticisms to help me improve on my own analysis.
SWN wrote: I agree with what Sykn wrote as I am of the view that although the UK subsidiary is sold, the management team in Singapore does not change much and business should continue as before. In addition as the group is now debt free, they are in a better position should they need to borrow to fund future expansion.
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