Finance Journey

Introduction: First Republic has been in the waters recently for being the potential next "Silicon Valley Bank". With a rampant Witch Hunting of poor performing banks First Republic may be the next one to get lynched. Point 1: First Republic was recently offered a bailout by other Banks and the FEDs totaling 30B ( SOURCE ). However, these loans are not designed to be used as a profit generator rather just as a temporary "Band-Aid". These loans have interest rates of about 4.57% - 4.85%( SOURCE ). But, First Republic main revenue generator "Residential real estate" accounting for 61.6% of loans it had given out, only yielded 3.18%. So First Republic is borrowing money to borrow money from the FEDs. Point 2: In the event of a bank run, First Republic is not primed to deal with it. Their short-term liquidity is about 1.65B. Their Debt Security Held-To-Maturity is about 3.1B, which may mask larger losses. For SVB they realized about a 20% loss in value from th...

Introduction: Sheng Siong has always prided itself as a supermarket for the people offering the cheapest possible price because it wants to be a place for the people ran by the people. However, in recent times it has lost that edge.  Taking at look at LINK  & LINK  , out of 23  essential products, Sheng Siong only offered 4 products the cheapest. But Sheng Siong's problems go far beyond just losing its competitive edge. With an unrealistic growth plan, strong refusal to step out of its comfort zone and poor corporate governance  may mean curtain call for the Sheng Siong show. Investment Thesis 1: EROSION OF COMPETITIVE ADVANTAGE Due to a lack of competitive advantage over competitors, the inability to differentiate itself will lead to its market share slowly depleting as consumers are willing to swap over to another brand easily. And given that other brands are beginning to develop their unique selling point(USP) such as Redmart being the subsidiary of ...

Introduction: Due to the unsatisfactory pricing in my previous DCF where I obtained a price of $0.45 for SIA, I had decided to implement an additional methodology of Valuation using Comps. My rationale is that Airlines are usually operating out of razor thin margins due to non-differentiated offerings so very little is reinvested to grow Future Free Cash Flow and pay back to investors. However, the airline industry is also a unique one where the product it offers is indispensable, so Airlines are usually government backed so I think in a traditional DCF it does not consider the safety net provided by the government that boosts intrinsic value.  Comparable: My main criteria for picking comparable companies are Market Cap, Revenue size and they must be government backed/owned OR minimally were favored to receive government help. In the end, I've found 6 other companies that are relatively close to SIA. Choosing China Southern, China Eastern, United Airlines, Lufthansa and ANA.  ...