Nordic Group Limited (MR7)

Share Price when postedShort Term ViewLong Term ViewCurrent Share Price
0.33FA & TA BullishFA & TA Bullish
SGX:MR7: (%)

 

Nordic Group Limited, an investment holding company, provides solutions in areas of:

  1. Systems integration;
    System Integration division turns systems into solutions by providing flow, automation, and navigation solutions that include valve remote control systems, tank gauging systems, integrated monitoring, and alarm control systems.(Key clients: ASL Shipyard, China state shipbuilding, COSCO Group, Keppel O&M, Sembcorp Marine, ST Marine shipyard, Maersk, Nam Cheong, Petrobas, )
  2. Maintenance, repair, overhaul, and trading;
    Its Maintenance, Repair, Overhaul, and Trading division provides after-sales services.
  3. Precision engineering;
    The company’s Precision Engineering division designs and builds tooling systems; and provides turnkey production solutions to customers in the aerospace, marine, medical, oil and gas, and electronic manufacturing industries.
  4. Scaffolding;
    Its Scaffolding Services division offers a suite of safety-certified metal scaffolding systems, including design, erection, modification, dismantling, sales and rental, and servicing the onshore oil and gas, petrochemical, and marine industries.
    (Key clients: Exxon mobil, Chevron, Shell, Keppel)
  5. Insulation in China, Singapore, and internationally.
    The company’s Insulation Services division specializes in supplying thermal, acoustical insulation, passive fireproofing, and industrial coatings to the marine, oil and gas, petrochemical, and pharmaceutical industries. It markets and sells its products primarily through sales and service agents. Nordic Group Limited was founded in 1998 and is headquartered in Singapore
    (Key clients: Chevron, Foster wheeler, GSK, Shell, Exxon, Pfizer)

Fundamental analysis:

  1. Revenue & Net income have been increasing consistently (despite the challenges faced in the O&G industry)
    (Noted the YoY increase of net income of 21%)
  2. Current & Cash ratio is healthy (both >1)
  3. Net cash position
  4. 3rd party receivable 15M/Equity of 66.8M (22%) *need to assess on the probabiliy of write off due to the downturn of O&G industry
  5. Risk flagging: Goodwill of 22M/Equity of 66.8M is very high (33%) – this would need to be discounted during valuation of the company
    (Goodwill arises when the parent company pays more than the fair value of the acquired company. Unless the acquired company has huge potential to generate a lot more cash flow, we would need to scrutinize on this)
  6. Current PE Ratio is around 10x, PB Ratio of 2x
  7. Overall commentary: Nordic’s balance sheet is healthy and has shown resiliency of being able to maintain its profitability even when the industry is suffering a downturn

Technical analysis:

  1. Stock is currently at all time high, however, TA is showing some probability for further break up
  2. MACD & RSI are both showing signs that the rally is not over
  3. To monitor for the 1 or 2 days for confirmation on uptrend on specific cross overs to happen