Last done price (S$)

Net asset value per share  (S$) Discount (%)
Ellipsiz

0.075 0.405 81.5
DMX Technologies

0.14 0.528 81.4
Lasseters Int'l

0.125 0.493 79.1
Global Voice

0.04 0.09 78.7
Heeton Hldgs

0.215 0.720 70.1
Orchard Parade Hldgs 0.75

2.39 68.6
Z-Obee Hldgs

0.07 0.154 67.9
Sunningdale Tech

0.145 0.429 66.2
HTL Int'l Hldgs

0.18 0.515 65.0
UMS Hldgs 0.19

0.523 63.7
Lion Teck Chiang 0.33

0.90 63.3


MANY STOCKS are trading at bargain prices, going by their discount to their net asset value (NAV), which is the value of their assets less their liabilities.

The NAV discounts are more than 60% in some cases. Eye-popping, isn’t that? It’s a measure of the severity of the selldown in the market. Sometimes, it could also mean that the market is anticipating a fall in the business fundamentals.

NAV is used, in particular, for valuing real estate, shipping and hotel companies, as they have a large asset base and the usage of assets is critical to the company's earnings capacity. 

In contrast, companies which are in the service industry tend to have low NAVs, as their earnings are driven by their people assets, rather than physical assets.


We culled some examples of stocks with sharp NAV discounts from www.sharesinvestment.com, the recently launched online version of the popular fortnightly publication, Shares Investment. Unfortunately, some of these examples are of businesses which reported sharp declines in their profitability of late.

Some notes to go with the examples in the table above:

Image
DMX Technologies

DMX Technologies:  1H08 ended June 30 net profit was US$3.3 million, which was 47.4% lower than 1H07, due primarily to higher amortization of intangible assets.

Net asset value has crept up from 37.51 US cents a share a year ago to 38.50 cents a share as at June 30 this year.

Ellipsiz:
Net loss was $12.3 million for the year ended June 30. An exceptional item of $9.4 million caused the loss to balloon.

Its net asset value as at June 30 shrunk to 40.54 cents a share from 48.08 cents a year earlier.
Key forecasts for 2008 semiconductor growth revised downwards:

Gartner: from 6.2% to 4.6%
SIA: from 7.7% to 4.3%
iSuppli: from 7.5% to 4%


Ellipsiz recently said that its business would be affected by the impact that the US subprime crisis and risk of US economic recession would have on the global economy, financial and semiconductor markets.

Image
A Heeton project

Heeton: This property developer reported net profit for the half-year ended June 30 as having plunged 94% to $3.2 million.

But interestingly, director Toh Giap Eng on Aug 11 bought 740,000 shares at around 29 cents apiece.

Net asset value of Heeton was stable at 71.98 cents a share, compared to 71.27 cents as at end of last December.

Lasseters: Loss of $34 million for full year ended June 30, compared to $1.9 million loss in the previous year.

Net asset value has fallen sharply to 23.52 Aussie cents a share from 37.95 cents a share due to losses and impairments in the value of fixed assets, intangible assets and share of impairment at associates.


Orchard Parade Holdings
:
Net profit for the half-year ended June 30 rose 13% to $21.3 million. Q2 was bad, however, with net profit plunging 66% to $4.6 million.

Net asset value was stable at $2.39 a share, compared to $2.15 as at end of last December.


Related story:
K1 VENTURES and other dividend plays


Share Prices

Counter NameLastChange
AEM Holdings3.8100.010
Avi-Tech Electronics0.280-
Best World1.780-0.010
Broadway Ind0.120-
China Sunsine0.400-0.005
DISA0.002-0.001
Food Empire0.635-0.005
Fortress Minerals0.375-
Geo Energy Res0.350-
Golden Energy0.790-
GSS Energy0.048-0.001
InnoTek0.470-
ISDN Holdings0.400-0.005
ISOTeam0.090-
IX Biopharma0.125-0.002
Jiutian Chemical0.0810.001
KSH Holdings0.345-0.005
Leader Env0.056-
Medtecs Intl0.138-
Meta Health0.025-
Nordic Group0.475-
Oxley Holdings0.151-
REX International0.230-0.005
Riverstone0.6250.010
Sinostar PEC0.195-
Southern Alliance Mining0.410-0.090
Straco Corp.0.395-
Sunpower Group0.2750.005
The Trendlines0.093-
Totm Technologies0.101-0.001
UG Healthcare0.194-
Uni-Asia Group0.810-
Wilmar Intl4.070-0.020
Yangzijiang Shipbldg1.400-

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