27 Singapore Stocks Trading Below Liquidation Value

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The Net Net Investing Strategy is a classic value investing approach devised by Benjamin Graham over 50 years ago. It is a strategy that Warren Buffett used in his early days as an investor and it made him his first pot of gold.

You can watch a quick explanation of this strategy in this video:

Essentially, a net net stock has enough liquid assets to cover all the liabilities. If the company decides to close shop today, it can liquidate and have leftover money to return to the shareholders. And yet, the share price is selling below this liquidation value.

I did a stock screen based on 14 Apr 2020 data and ended up with 27 net net stocks after removing the stocks on SGX Watch List or S-Chips (PRC companies listed on SGX).

Here’s the list:

Row LabelsNet Net Per ShareShare PriceDiscount
Soon Lian Holdings Limited0.1140.01686%
Nippecraft Limited0.0640.0269%
Incredible Holdings Ltd0.0060.00269%
Sincap Group Limited0.0160.00661%
SP Corporation Limited0.8790.37557%
Klw Holdings Limited0.0070.00357%
TLV Holdings Limited0.1010.0550%
ES Group (Holdings) Limited,0.0820.04150%
Lion Asiapac Ltd0.6060.36540%
HL Global Enterprises Limited0.4150.25538%
Ntegrator Intl Ltd0.0080.00536%
AsiaPhos Limited0.0340.02235%
Figtree Holdings Limited0.0680.0526%
Sysma Holdings Limited0.1490.1126%
HG Metal Manufacturing Limited0.2320.17823%
Sin Ghee Huat Corporation Ltd0.2260.18518%
CDW Holding Limited0.1510.1314%
Willas-Array Electronics0.5000.4314%
Ellipsiz Ltd0.3390.29513%
Jason Marine Group Limited0.1370.1213%
Santak Holdings Limited0.0970.08513%
Serial System Ltd0.0820.07311%
Asia Enterprises Holdings Limited0.1190.118%
Tiong Seng Holdings Limited0.1600.1488%
TTJ Holdings Limited0.1210.1127%
Jubilee Industries Holdings Ltd0.0520.054%
Koyo International Limited0.0660.0660%

I have further filtered these net net stocks by identifying those with positive free cash flow and earnings, which reduces the chance of them running into cash flow issues and erosion of their asset values. I ended up with 8.

#1 – Soon Lian (SGX:5MD)

  • Net Net Discount = 86%
  • Net Net Per Share = $0.114
  • Share Price = $0.016
  • Free Cash Flow Per Share = $0.039
  • Industry: Aluminum

Soon Lian engages in the manufacture, design, and supply of aluminium alloy products. It operates through the following segments: Precision Engineering, Marine, Stockists and Traders, and Other Customers. The Precision Engineering segment supplies aluminium alloy products to be used for precision instruments, equipment for semiconductors, and automated assembly lines. The Marine segment assembles aluminium alloy products for marine applications including hulls, decks, superstructures, and cabins of light crafts such as catamarans, pleasure crafts, and patrol boats. The Stockists and Traders segment consists of trading companies comprising other aluminium alloy stockists, construction companies, and companies in the oil and gas industry. The Other Customers segment includes aircraft industries, oil tankers, automotive parts, rail coaches, truck frames, bridges, and towers.

#2 – Sincap (SGX:5UN)

  • Net Net Discount = 61%
  • Net Net Per Share = $0.016
  • Share Price = $0.006
  • Free Cash Flow Per Share = $0.005
  • Industry: Wholesale Distributor

Sincap engages in the trading of alumina and thermal coal, and the mining and sale of gypsum. It operates through the Coal Products and Property business segments. The Coal Products segment trades and sells coal. The Property segment provides real estate development and investment.

#3 – ES Group (SGX:5RC)

  • Net Net Discount = 50%
  • Net Net Per Share = $0.082
  • Share Price = $0.041
  • Free Cash Flow Per Share = $0.094
  • Industry: Marine Shipping

ES Group engages in the provision of management and technical services. It operates through the New Building and Repair, and Shipping business segments. The New Building and Repair segment comprises of the new building, conversion and repair of offshore, and marine structures and vessels, and labor supply. The Shipping segment represents ship chartering, marine supplies, and related activities.

#4 – HL Global Enterprises (SGX:AVX)

  • Net Net Discount = 38%
  • Net Net Per Share = $0.415
  • Share Price = $0.255
  • Free Cash Flow Per Share = $0.023
  • Industry: Hotels

HL Global Enterprises engages in the business of hotel management and property development. It operates through the following segments: Investments and Others; Hospitality and Restaurant; and Property Development. The Investments and Others segment invests in properties for rental and investment holding. The Hospitality and Restaurants segment focuses on the operating and management of hotels and restaurants. The Property Development segment develops properties for sale and rental and development project management.

#5 – Serial System (SGX:S69)

  • Net Net Discount = 11%
  • Net Net Per Share = $0.082
  • Share Price = $0.072
  • Free Cash Flow Per Share = $0.066
  • Industry: Wholesale Distributor

Serial System engages in the distributing electronic and electrical components. It operates its business through the following segments: Electronic Components Distribution, Consumer Products, and Other Businesses. The Electronic Components Distribution segment engages in the offering design supports, technology solutions and services, materials planning and inventory management. The Consumer products segment provides its services in South East Asia, Kazakhstan, United Arab Emirates and Bangladesh. The Other Businesses segment engages in the investment holding and trading, rental of investment properties, advertising media owner and sales, interactive system integrator and technology, hospitality solutions and ethylene oxide sterilization and assembly and distribution of medical devices.

#6 – Asia Enterprises (SGX:A55)

  • Net Net Discount = 8%
  • Net Net Per Share = $0.119
  • Share Price = $0.11
  • Free Cash Flow Per Share = $0.019
  • Industry: Wholesale Distributor

Asia Enterprises engages in the distribution of steel products. It operates through the following segments: Steel Distribution, Provision of Steel Processing, and Corporate. The Steel Distribution segment procures, distributes, and trades shipbuilding plates, hot-rolled plates, wide-flanged beams, bulb flats, channels, angles, bars, hollow sections, pipes, and serrated galvanized gratings. The Provision of Steel Processing segment processes steel materials for sale. The Corporate segment involves in investment and management activities.

#7 – Tiong Seng (SGX:BFI)

  • Net Net Discount = 8%
  • Net Net Per Share = $0.16
  • Share Price = $0.148
  • Free Cash Flow Per Share = $0.068
  • Industry: Engineering and Construction

Tiong Seng engages in building construction, civil engineering, and property development. It operates through the following segments: Construction, Property Development, Rental, and Others. The Construction segment relates to acting as main contractors in construction and civil engineering projects and provision of construction and civil engineering services to property developers and government in both private and public sectors. The Property Development segment includes development and sales of properties. The Rental segment comprises investment properties and plant and machinery. The Others segment refers to the general corporate activities.

#8 – Koyo (SGX:5OC)

  • Net Net Discount = 0%
  • Net Net Per Share = $0.066
  • Share Price = $0.066
  • Free Cash Flow Per Share = $0.016
  • Industry: Engineering and Construction

Koyo engages in the provision of mechanical and electrical engineering services. It operates through the following segments: Mechanical Engineering, Electrical Engineering, and Facilities Management. The Mechanical Engineering segment involves in designing and installing air-conditioning and mechanical ventilation, plumbing and sanitary installation, fire prevention and protection system, and integrated systems. The Electrical Engineering focuses on planning and putting a high and low tension electrical distribution systems and communications, audio-visual, and securities systems. The Facilities Management gives maintenance, repair, and replacement services for commercial buildings, hotels, schools, and universities.

A Word of Caution

It is important to note that the approach to net net investing is to build a diversified portfolio. Benjamin Graham suggested the number should be 10 to 30 stocks. Hence, you should not just buy 1 or 2 stocks because you will be stuck if the value wasn’t unlocked.

If you are not sure how to execute this strategy properly, you can leverage on our Net Net Investing Newsletter which we partnered Evan Bleker of Net Net Hunter to produce. You will receive one actionable high quality net net stock idea in your email inbox each month.

4 thoughts on “27 Singapore Stocks Trading Below Liquidation Value”

    • You would have to analyse the stocks deeper. For example, what kind of assets. If it is receivables or inventories, would they be collected or have enough shelf life, respectively. If it is cash and their cash flow is still positive then it is fine.

      Otherwise diversify widely such that one or two stocks can fail but will not kill your portfolio.

      Reply
  1. Hi Alvin, thank you for this great article, really applaud your generosity in always sharing your painstaking research with the public!

    Investopedia says that “Net-net working capital is calculated as cash and short-term investments + (75% of accounts receivable) + (50% of inventory) – total liabilities.”

    Just wondering whether this was the formula used in your calculations?
    And unlike CNAV, net-net doesn’t include the value of properties?

    Reply

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