Valuation of Singer Bangladesh Ltd.

Equity Valuation of Singer Bangladesh Ltd.

Prepared for:
Khairul Alam Siddique
Lecturer
Department of Finance
Faculty of Business Studies
University of Dhaka

Prepared by:
Minhajur Rahman Joy
ID: 23-106
Batch: 23rd, Section: A
Department of Finance
University of Dhaka

Date of Submission: February 12, 2020

 Letter of Transmittal

February 12, 2020

Khairul Alam Siddique
Lecturer
Department of Finance, FBS
University of Dhaka.

Subject: Submission of the semester term paper.

Dear Sir:

It is my pleasure to submit the term paper of my sixth semester of course Analysis of Financial
Investment (F-307). Making this term paper has provided me with a great opportunity for
gaining practical knowledge of statistics and how to use this knowledge. It has been a privilege
for me to have the opportunity to apply omy academic knowledge in real life situations.

I tried my level best to put sincere effort for the preparation of this term paper. As
undergraduate students, it is usual that inadequacy or error may arise and it may lack
professionalism in some cases. For any unintentional inadequacy in the term paper, your
sympathetic consideration would be highly appreciated. In addition, I will enthusiastically
welcome any clarification and suggestion about any view and conception disseminated in the
report.

I, therefore, pray that you would be kind enough to accept our report for evaluation and oblige
thereby.

Sincerely,

………………………………
Minhajur Rahman Joy
ID: 23-106
Batch: 23rd, Section: A
Department of Finance
University of Dhaka
 Contents
Letter of Transmittal ............................................................................................................. 3
Executive Summary .............................................................................................................. 5
Chapter 1: Industry Overview ............................................................................................... 6
Background ....................................................................................................................... 6
Porter’s Five Forces ........................................................................................................... 7
Chapter 2: Company Specific Factors of Singer Bangladesh Ltd. .......................................... 8
Company Overview ........................................................................................................... 8
Revenue Decomposition .................................................................................................... 9
Revenue Drivers ................................................................................................................ 9
Cost Composition ............................................................................................................ 11
Seasonality in Business .................................................................................................... 11
SWOT Analysis ............................................................................................................... 11
Competitive Advantage ................................................................................................... 12
Future Prospect ................................................................................................................ 12
Chapter 03: Financial Analysis of Singer Bangladesh Ltd. .................................................. 14
Profitability Ratio ............................................................................................................ 14
Liquidity Ratio ................................................................................................................ 14
Efficiency Ratio ............................................................................................................... 14
Leverage Ratio ................................................................................................................ 14
Z-Score............................................................................................................................ 15
Chapter 04: Valuation Techniques Singer Bangladesh Ltd. ................................................. 16
Key Assumptions for Profit & Loss Statement ................................................................. 16
Key Assumptions for Statement of Financial Position ...................................................... 16
Discounted Cash Flow Valuation ..................................................................................... 16
DDM Methods................................................................................................................. 17
Relative Valuation ........................................................................................................... 17
Growth Duration.............................................................................................................. 17
Identification of Risks...................................................................................................... 18
Calculation of Expected Return ....................................................................................... 18
Chapter 05: Conclusion ....................................................................................................... 19
Chapter 06: Appendices ...................................................................................................... 20
References .......................................................................................................................... 22
 Executive Summary

Singer Bangladesh Limited

Target Price 186.98BDT
Current Price (Feb 06, 2020) 171.00BDT
Expected Capital Gain 9.35%
Expected Dividend Yield 3.6%
Total Return 12.99%
Decision Hold

The objective of the report is to find a right investment opportunity. Upon conducting both
absolute and relative valuation on Singer Bangladesh Limited it was found the current market
price of SINGERBD as of 06 February 2020 was 171.00 BDT and the target price is 186.98
BDT which is leading to a return of 12.99%.
Firstly, in this report industry analysis has been conducted and it is found that there will be a
compounded annual growth rate of 15% which is mainly driven by the urbanization. Also it
was seen that within 2030 45.6% of the population will be urbanized resulting a huge electronic
products demand. The major growth driver of the industry is the increase in per capita income
level, the rise of the middle income class group etc.
Singer Bangladesh Limited was valued with absolute and relative technique and was found a
target price of 186.98 BDT. For absolute valuation Free Cash Flow to Firm and for relative
valuation P/E and EV/EBITDA method was used but more emphasize was given on FCFF.
After adjusting tax on capital gain and dividend we found that this investment would generate
a return of 12.99%.
 Chapter 1: Industry Overview
Background
Bangladesh is the best placed in the region for electrical, electronic home appliances industry
due to cheap labor and favorable trade status with the EU. Thus the potential for backward and
forward linkage industry is growing very fast. Presently, about 50%-60% of this demand is met
by import from countries like China, India, Hong Kong, Thailand, Korea, Indonesia etc. This
offers a tremendous opportunity for further investment.
Among the major products of consumer electronics and home appliances produced and
supplied by Singer Bangladesh. Refrigerator and Television generate most of the revenue in
the consumer durable goods. Currently, the annual demand of refrigerators in Bangladesh is
around 2.5 million units where Walton is the market leader in the refrigeration market and aims
to grab around 74% market share.
To promote the locally manufacturing of refrigerator, the government in the national budget
2017-18, have extended the VAT incentives to June 2019 for local manufacturing of
Refrigerator, Freedger and Air Conditioner. The percentage of domestic made refrigerators was
80 while the sale of imported refrigerators was only 20%.
The prominent local brands which are manufacturing Refrigerator are Walton, Marcel, Eco
Plus, Jamuna, RFL, MyOne and Minister. Among them, the annual production capacity of
Walton Hi-Tech Industries is 14 lakh units, Jamuna Electronics 3 lakh, Butterfly
Manufacturing Company Ltd (Eco Plus) 2 lakh, RFL Electronics 3 lakh while MyOne and
Minister’s capacity are 1 lakh.
Government of Bangladesh has keen to ensuring access of affordable and reliable electricity
for all by 2021. This will accelerate the demand of consumer durables in the coming days. The
demand of consumer electronics and home appliances mainly depends on income level and
purchasing power of consumer which shows increasing trend in our country. The television
market of Bangladesh is now stands at about 1 million units a year. Of the sum, branded
products account for around 40 percent.
Recently, South Korean technology giant Samsung has invested $100 million in Bangladesh to
established two manufacturing units. The company will produce televisions, refrigerators,
microwave oven and air conditioners for the local market and it has the plan to export in future.
It has started manufacturing television on a test basis from May 2017. Samsung’s other factory
which is located at Narsingdi will officially open from May 2018. The company is aiming to
grab 30 to 40 percent of the market share within next three to four years.

Life Cycle

Currently the industry is at the growth stage of the industry life cycle due to the following
characteristics:
 Increasing Sales: The industry is experiencing increasing sales which is reflected on
the growth rate of this industry as well as the performance of the top players in the
industry.
  Reducing Costs: With the help of economy of scale and enhanced innovation the
industry has started to reduce its production cost.
 Stable Profits: As the major players in the industry are now earning profit and which
is seen to stable over the years thus the industry has opportunity in forward to improve
profits.

Figure: Industry Life Cycle

Porter’s Five Forces

The Porter’s Five Forces of this industry can be identified as follows:
 Chapter 2: Company Specific Factors of Singer Bangladesh Ltd.

Company Overview
Singer Bangladesh Limited is engaged in manufacturing and marketing of color televisions,
refrigerators, home appliance, domestic furniture, sewing machine of Singer Brand. The
company is also engaged in marketing of televisions, air-conditioners of other brand. It also
distributes electric cables, computer and instant power supply, kitchen appliances and other
consumer electronics and household appliances. Singer Bangladesh Limited holds 10% of the
market shares in consumer durables industry which is the second largest market share in the
industry (Source: Daily Star).
Currently, the company has 374 sales centers in all the 64 districts of Bangladesh. Their sales
centers are named as Singer Mega and Singer Plus. Apart from that, the Company has 425
dealers who work as distributors for the company. The company also has five services centers
in Dhaka, Chittagong, Jessore, Borgra and Sylhet.
Acquisition of Singer’s Bangladesh business by Arçelik A.Ş at $75 million by acquiring Retail
Holdings Bhold B.V. (sponsor shareholder of Singer Bangladesh Ltd.). The $75 million deal
to acquire Singer BD by Arçelik represents fair valuation of stock however with Arçelik’s entry
in Bangladesh, future growth potential of the company looks attractive.

Incorporation: In 4 th September, 1979 as a private limited company

Listing: Dhaka Stock exchange: In 1983
Chittagong Stock Exchange: In 2001
Shareholders Pattern:
Product Portfolio:

Group Structure:

Revenue Decomposition
From 2012 to 2016, air conditioner, television and home appliances have contributed major
portion of the company’s revenue. In 2016, those items contributed 90.5% of total revenue.
Contribution from different revenue segment is presented in right side.

Revenue Drivers
Production Capacity of Panel Television
Singer Bangladesh has yearly capacity to produce 89,829 units of panel television. In 2016, the
capacity utilization ratio was 112%. As the demand of Panel Television increased, the company
focused to produce more panel television. At the same time, SingerBD decreased the
production of CRT television to make room for producing more Panel Television.
Production Capacity of CRT Television
SingerBD possess the capacity to produce 20,000 units of CRT television in 2016. With the
decreased demand of CRT Television, the company decreased the production capacity. The
company utilized 89% capacity to produce CRT Television in 2016. Over the last five years,
the demand of Panel Television has increased and the demand of CRT Television has
decreased. The company adjusted its capacity according to the demand of the market.

Production Capacity of Air Conditioner

The Company introduced air conditioner in its production line in 2014. Over the last three years
period, the company increased its capacity by 3.33 times. Demand for air conditioner is
increasing year on year. The company adjusted its production capacity in accordance with
demand. Production capacity stands at 20,000 unit per year with a utilization ratio of 99% in
2016.
Production Capacity of Furniture
The Company introduced furniture unit in its production line in 2013. The Company had a
capacity utilization ratio of 84% in the year 2014 with a production capacity of 1,200 units. To
keep pace with the increased demand in the consumer market, the company increased its
furniture unit capacity to 5,300 unit in the year 2015. The company had highest utilization rate
of 104% in the year 2015.

Cost Composition
For the raw materials of the products almost 95-98% of materials are imported where just 1-
4% are locally procured which possesses the main difficulty in production of electronics goods.

Seasonality in Business
Singer Bangladesh is exposed to high seasonality in business. Major portion of revenue comes
in quarter 2 and quarter 3 (April to September). Usually, there are little sales on quarter 1 and
quarter 4. The sales of air conditioner increase during the summer period. The sales of
refrigerator and television reach at its peak during the EID period. The Company earns major
portion of the revenue during the EID festival and summer season.
SWOT Analysis
Internal External
Strengths Weakness Opportunities Threats
(1) Brand reputation (1) Dependence on (1) Production of (1) Intense
imported raw raw materials locally competition from
(2) Loyal Customer
materials international players
Base (2) Becoming the
market leader (2) Intense
(3) Strong
competition from
Distribution Channel
local players
Competitive Advantage
VRIN Model
Based on the VRIN Model it can be concluded that Singer Bangladesh Ltd. has a long term
competitive advantage.

Ansoff Matrix
Based on the Ansoff Growth Matrix it can be concluded that Singer Bangladesh Ltd. is at the
Product Development stage.
Existing Products New Products
Existing Market Market Penetration Product Development
New Market Market Development Diversification

Future Prospect
(1) Robust growth in consumer durables industry and steady economic growth will
accelerate the growth of Singer: The Government of Bangladesh targeted that Bangladesh
will be a middle income country by 2021. Consequently, the GDP of Bangladesh is expected
to grow more than 7% in the upcoming year. Consumer durable industry is expected to grow
at the same pace with economy. As SINGERBD belongs to this industry, the company is
expected to grow with the growth of the industry.
Major revenue generating segments continued to record lucrative growth in topline: Major
revenue earning segments air conditioner (12.07%), television (21.04%) and home appliance
(56.94%) have experienced a five year sales CAGR of 23.6%, 13.7% and 10.3% respectively.
Singer Bangladesh has recorded 49% sales growth of panel television, 47% sales growth of
washing machines, 42% sales growth of refrigerators, 40% sales growth of furniture and 36%
sales growth of air conditioner in Q2 of 2017. With the future growth of consumer durables
industry, profitability of Singer Bangladesh Limited is likely to increase.
(2) Income from associate will grow up further while serving as a backward linkage for
the company: International Appliances Limited, a 73.85% owned associate of Singer
Bangladesh Limited has started commercial operation in July 2016 with a production capacity
of 250,000 units. The Company has turned into a profitable one in 2017 Q3. Singer Bangladesh
Limited has earned BDT 10 million from this associate in this time. It is expected that the
associate will generate more profit in the future. Addition of new product in the product
portfolio will increase the revenue of the company: Singer Bangladesh Limited adds a good
number of products in its product portfolio each year. New product in the product portfolio
helps the company to generate additional revenue each year.
(3) Major portion of revenue comes in EID festival and Summer Season: Singer
Bangladesh earns major portion of revenue from selling television and refrigerator during the
EID festival and from selling air conditioner during the summer season.
 Chapter 03: Financial Analysis of Singer Bangladesh Ltd.

Profitability Ratio
The profitability ratios of Singer Bangladesh Ltd. are as follows:

Liquidity Ratio
The liquidity ratios of Singer Bangladesh Ltd. are as follows:

Efficiency Ratio
The efficiency ratios of Singer Bangladesh Ltd. are as follows:

Leverage Ratio
The leverage ratios of Singer Bangladesh Ltd. are as follows:
Z-Score

The Z-Score of Singer Bangladesh Ltd. is as follows:

Total Assets 10,762 Interpretations

NWC 2241 Z > 2.99 Safe Zone
Retained 1.81 < Z < 2.99 Gray Zone
Earnings 988 Z < 1.81 Distress Zone
EBIT 1431
Equity 997
Liabilities 8206
Sales 15938

Factor
A 0.20823 1.2
B 0.0918 1.4
C 0.13297 3.3
D 0.1215 0.6
E 1.48095 1
Z Score 2.37105

The Z Score of Singer Bangladesh Ltd. is 2.37 which lies in the Gray Zone.
 Chapter 04: Valuation Techniques Singer Bangladesh Ltd.

Key Assumptions for Profit & Loss Statement

Estimated Growth Rates for Profit & Loss Statement
2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20E 2020-21E 2021-22E 2022-23E 2023-24E
Revenue (Breakdown shown below) % of Growth -5.39% 30.96% 24.00% 24.12% 17.09% 18.00% 18.00% 16.00% 16.00% 16.00%
add: Earned carrying changes 2% 2% 1% 1% 1% 1% 1% 1% 1% 1%
Cost of Goods Sold % of Sales 75.03% 72.51% 72.40% 71.99% 71.63% 72.00% 72.00% 72.00% 72.00% 72.00%
Gross Profit % of sales 27.00% 27.00% 27.00% 27.00% 27.00%
Operating Expenses: % of sales 19.04% 18.77% 16.97% 15.93% 16.33% 15.00% 15.00% 15.00% 15.00% 15.00%

Operating Profit 12.00% 12.00% 12.00% 12.00% 12.00%

Other Non-Operating Income % of Sales 0.96% 0.01% 1.19% 2.16% 2.58% 2.50% 2.50% 2.50% 2.50% 2.50%
Profit Before WPPF
Provision For WPPF 2476.92% 2751.85% 1750.00% 1976.92% 1834.62% 0.00% 0.00% 0.00% 0.00% 0.00%
Profit Before Tax
Income tax 32% 32% 32% 32% 32%
Earning After Tax 23.23% 23.23% 23.23% 23.23% 23.23% 22.69% 20.98% 23.22% 23.76% 24.67%
Profit/(Loss) from Associates Undertaking % increase
Earning After Tax 24.85% 24.85% 24.85% 24.85% 24.85% 24.74% 23.04% 25.29% 25.86% 26.80%
CAPEX % sales 7.0% 7.0% 7.0% 7.0% 7.0% 7.0% 7.0% 7.0% 7.0% 7.0%
DEP % sales 4% 4% 4% 4% 4% 4% 4% 4% 4% 4%
DIVIDEND 36% 36% 36% 36% 36% 36% 36% 36% 36% 36%

Key Assumptions for Statement of Financial Position

Assumptions for Statement of Financial Position
2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20E 2020-21E 2021-22E 2022-23E 2023-24E
Investment GROWTH 3.9% 27.0% 12.6% 0.1% 52.9% 25% 25% 15% 12.50% 10%
Inventory % of COGS 28.1% 22.2% 33.7% 42.0% 39.8% 39.5% 40% 40% 40% 40% 40%
Account Receivables % of sales 12.3% 15.4% 17.4% 21.4% 16.3% 18.5% 15.0% 15.0% 15.0% 15.0% 15.0%
Short Term Loan (Current asset)
% increase -92% 6328% 83% 29% 23% 20% 20% 20% 20% 20%
Cash & Cash Equivalents % of sales 2% 2% 2% 2% 1% 1% 2% 2% 2% 2% 2%
Share Capital % increase 25% 0% 0% 0% 30% 0% 0% 25% 0% 0%
Reserve % of sales 6% 6% 7% 5% 4% 4% 5% 5% 5% 5% 5%
Retained Earnings % increase -56% 161% 63% 1% 1% 20% 25% 40% 50% 50%
Payables % of COGS 16% 16% 18% 22% 17% 19% 20% 20% 20% 20% 20%
Short term loan % total asset 5% 0% 20% 27% 32% 31% 30% 30% 30% 30% 30%

Discounted Cash Flow Valuation

DCF VALUATION
2019-20E 2020-21E 2021-22E 2022-23E 2023-24E
Amounts in Million BDT
EAT 1,800 2,130 2,477 2,880 3,347
(+) DEP 752.27 887.6828 1029.712 1194.466 1385.5806
(-) Capex 1,316.48 1,553.44 1,802.00 2,090.32 2,424.77
(-) Incremental WC 293.64 297.21 425.41 528.00 655.61
FCFF 942 1,167 1,279 1,456 1,653
Terminal Value 25,691.54
Total Cash Flow 942 1,167 1,279 1,456 27,344
PV of FCFF £20,173.03
Net Debt -1531
PV of FCFE/ Value of equity £18,642.03
No of share outsatnding 99.7
Equity Value Per sahre £186.98
DDM Methods
DDM Method
in Million BDT
Particulars 2018-19 2019-20 2020-21 2021-22 2022-23 2023-24
Total Dividend 10,069.70 11,500.00 12,000.00 14,000.00 10,000.00 12,500.00
Number of outstanding share 997.00 997.00 997.00 1,250.00 1,250.00 1,250.00
Dividend per share 10.10 11.53 12.04 11.20 8.00 10.00
Growth rate of dividend 0.14 0.04 - 0.07 - 0.29 0.25
Average growth 0.02
Terminal Value of Dividend 10.16

Zero Growth DDM Model

Intrinsic Value 94.57

Constant Growth Model

Intrinsic Value 111.32

Relative Valuation
Relative Valuation Methods
Current P/E 17.33
PE at YE 2013 38.1
PE at YE 2014 46.1
PE at YE 2015 35.7
PE at YE 2016 27.1
PE at YE 2017 18.2
Avg 30.42

Multiple Expected EPS

Valuation
Average Historical PE multiple 30.42 18.05 549.224

Target Price
Valuation Methods Valuation Weights
Average Historical PE multiple 549.22 10%
DCF £186.98 90%
Average Value Per share 223.21

Growth Duration
Growth Duration
Particulars Engineering Industry SingerBD
P/E Ratio 17.4 14.61538462 Price per share 171
Expected Growth Rate 0.15 0.028818959 EPS 11.7
Dividend Yeild 0.06 0.059064327
Ln(p/E)/(p/E) 0.839964633
Ln(1+g+d)/(1+g+d) 0.899077096
Duration 1.639263506

Particulars 2018-19 2019-20 2020-21 2021-22 2022-23 2023-24

EPS 11.7 10 11 12 11 13
Growth rate -0.145299145 0.1 0.0909091 -0.0833 0.181818182
Average 0.02882
Identification of Risks
The risks associated with the investment of Singer Bangladesh Ltd. are as follows:
1. Default Risk: As the debt-to-equity ratio of the firm is 70%, thus not being able to meet
the financial obligations is one of the major risk associated with this investment.
2. Foreign Exchange Risk: The company is exposed to foreign exchange risk as huge portion
of raw materials are imported (In 2016, 93.59%) Thus, unfavorable foreign exchange
movement may hamper the earnings of the company.
3. Market Risk: Intense competition from a large number of local manufacturers as well as
low priced imported Chinese goods is a major concern for the company to retain its market
share.
4. Political Risk: Revenue of SINGERBD is highly contingent with political instability. In the
year 2013 and 2015, the company experienced degrowth of sales about -1.35% and -5.38%
respectively. Future political instability may hamper revenue growth of the company.

Calculation of Expected Return

2014 8.91
2015 3.61
2016 3.64
2017 5.12
2018 0
Expected Div. Yield 3.64

Target Price £186.98

Current Price (Feb 06, 2020) 171.00
Expected Capital Gain 9.35%
Expected Dividend Yield 3.6%
Total Return 12.99%
 Chapter 05: Conclusion

Decision Rule
The decision rule to decide whether the firm is a possible buy or it should be offloaded from
the portfolio will be based on these criteria:
Rating Expected Return
(Annualized)
Buy More than 15%
Hold 0 to 15%
Sell Below 0%

As the total expected return from the investment of Singer Bangladesh Ltd. Is 12.98% thus it
is recommended to hold the investment which neither to buy nor sell the security.
 Chapter 06: Appendices

Estimated Profit & Loss Statement

Profit & Loss Statement
Amount in BDT million
2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20E 2020-21E 2021-22E 2022-23E 2023-24E
Revenue 7138 6753 8844 10,967 13,612 15938 18,807 22,192 25,743 29,862 34,640
add: Earned carryting changes 123 156 163 92 88 102 188 222 257 299 346
Net Revenue 7,261 6,909 9,007 11,059 13,700 16,040 18,619 21,970 25,485 29,563 34,293

Cost of Goods Sold 5422 5067 6413 7,940 9,799 11,416 13,541 15,978 18,535 21,500 24,940
Gross Profit 1,716 1,686 2,431 3,027 3,813 4,522 5,078 5,992 6,951 8,063 9,353

Operating Expenses: 1239 1286 1660 1,861 2,169 2,602 2,821 3,329 3,861 4,479 5,196
Operating Income
Operating Profit 477 400 771 1,166 1,644 1,920 2,257 2,663 3,089 3,583 4,157
other non operating income -1 65 1 130 294 411 470 555 644 747 866
Profit Before WPPF 478 335 770 1,036 1,350 1,509 2,727 3,218 3,733 4,330 5,023
Provision For WPPF 11 13 27 56 65 78 80 85 90 95 100
Profit Before Tax 467 322 743 980 1,285 1,431 2,647 3,133 3,643 4,235 4,923

Income tax expense-Current 138 148 233 280 354 464 847 1,003 1,166 1,355 1,575
Income tax expense-Deferred
Defferred Tax Assets
Total Tax 138 148 233 280 354 464 847 1,003 1,166 1,355 1,575

Earning After Tax 329 174 510 700 931 967 1,800 2,130 2,477 2,880 3,347
Profit/(Loss) from Associates Undertaking
Net Profit After Tax 329 174 510 700 931 967 1,800 2,130 2,477 2,880 3,347

Estimated Statement of Financial Position

Statement of Financial Position
Amounts in Million BDT
2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20E 2020-21E 2021-22E 2022-23E 2023-24E
Non-current Assets 1,220 1,267 1,609 1,811 1,812 2,771 3,464 4,330 4,979 5,602 6,162
Property, Plant and Equipment 917 828 1034 1,051 1,411 1398 1,957 2,740 3,836 5,371 7,519
Intangible Assets 15 45 36 35 35 32 37 42 49 56 64
Other non current assets 288 394 539 725 366 1341 1,609 1,931 2,317 2,781 3,337
Current Assets 2,742 2,379 4,087 6,080 6,670 7,991 9,512 11,031 12,675 14,573 16,764
Inventories 1522 1127 2159 3,331 3,897 4510 5,416 6,391 7,414 8,600 9,976
Trade and other receivabels 880 1042 1538 2,343 2,225 2950 3,393 3,901 4,487 5,160 5,934
Other Current Assets 188 107 238 213 354 311 327 343 360 378 397
Cash & Cash Equivalents 152 103 152 193 194 220 376.14 395 415 435 457
Total Assets 3,962 3,646 5,696 7,891 8,482 10,762 12,975 15,360 17,654 20,175 22,925

Shareholders' Equity 1,526 1,415 1,945 2,310 2,316 2,556 2,771 3,085 3,949 5,005 6,580
Share Capital 613 766 766 766 766 997 997 997 1,250 1,250 1,250
Reserve 395 421 585 573 573 571 588 606 624 643 662
Retained Earnings 518 228 594 971 977 988 1,186 1,482 2,075 3,112 4,668
Non-current Liablities 1,324 1,409 1,445 1,751 1,725 2,676 3,603 4,472 4,702 4,818 4,479
Long Term Loans 126 126 109 63 37 37 125 245 220 220 300
Other non current liabilities 1198 1283 1336 1,688 1,688 2639 3,478 4,227 4,482 4,598 4,179
Current Liabilities 1,112 822 2,306 3,830 4,382 5,530 6,601 7,804 9,003 10,352 11,866
Short Term Bank Loans 217 18 1157 2,118 2,728 3357 3,893 4,608 5,296 6,052 6,878
Trade Creditors 892 804 1130 1,712 1,646 2170 2,708 3,196 3,707 4,300 4,988
Other Current liabilities 3 0 19 0 8 3 - - - - -
Total Shareholders' Equity &3,962
Liabilities
3,646 5,696 7,891 8,423 10,762 12,975 15,360 17,654 20,175 22,925

Statement of Working Capital

Statement of WC
Amounts in Million BDT
2018-219 2019-20E 2020-21E 2021-22E 2022-23E 2023-24E
Current Assets 7,991 9,512 11,031 12,675 14,573 16,764
Current Liablities 5,530 6,601 7,804 9,003 10,352 11,866
Cash & Cash Equivalents 220 376 395 415 435 457
NWC 2,241 2,535 2,832 3,257 3,785 4,441
Incremental NWC 294 297 425 528 656
WACC & Beta
WACC & Beta
Date Market Index Market Return Price of SingerBD SingerBD Return
Dec-19 4594.549475 -0.027397434 180.4 0.019823789
Nov 4723.97425 -0.014542847 181.6 -0.046218487
Oct 4793.688125 -0.030173158 190.4 -0.095486936
Sep 4942.82888 -0.049455222 210.5 0.005253104
Aug 5199.99583 0.003254003 209.4 -0.009460738
July 5183.12991 -0.043198365 211.4 0.094202899
June 5417.141568 0.02536094 193.2 0.08174692
May 5283.155773 -0.007831098 178.6 0.051206592
April 5324.855235 -0.052775266 169.9 -0.123323013
March 5621.533139 -0.023836174 193.8 -0.1925
Feb 5758.800923 -0.007448897 240 0.017380246
Jan 5802.01957 0.095899438 235.9 0.059272564
18-Dec 5294.299249 0.006282379 222.7 0.03245248
Nov 5261.24611 -0.017783974 215.7 -0.00323475
Oct 5356.506075 -0.022169973 216.4 0.02607871
Sep 5477.952127 0.001755804 210.9 0.046130952
Aug 5468.350774 0.026041457 201.6 0.01715439
July 5329.561232 -0.009508689 198.2 0.091409692
June 5380.72487 -0.02222794 181.6 0.092659446
May 5503.04625 -0.052789528 166.2 -0.034282394
April 5809.739665 0.020316767 172.1 -0.03908431
March 5694.054877 -0.042295636 179.1 -0.032937365
Feb 5945.524622 -0.038103586 185.2 -0.00803428
Jan 6181.044586 -0.007023412 186.7 2.097213006
1-Dec 6224.763666 - 60.28 -
Variance 0.001070088 Covariance 0.001173258
Beta 1.096412773
D/E 2.569625578

RFRR 9.150%
RM 14.2%
Risk premium (Rm - Rf) 5.00%
Beta (ß) 1.0964
Cost of equity (Ke) 14.632%
Cost of debt (Kd) 9%
Tax Rate 32%
After tax cost of debt 6.120%
Weight for equity (We) 30%
Weight for debt (Wd) 70%
WACC 10.6896%

RF= (Return on 10-year treasury bond,Rf)

References

1. Dhaka Stock Exchange, www.dsebd.org/companylistbyindustry.php?industryno=13

2. Annual Reports of Singer Bangladesh Bd, https://singerbd.com/financial-statements5yrs
3. Equity Valuation Report on Singer Bangladesh Limited, EBL Securities
4. Equity Note, Singer Bangladesh Limited, EBL Securities
5. Equity Note, Singer Bangladesh Limited, International Leasing Securities Limited