Founded by Lee Koh Yong (Executive Chairman) and Lee Cheng Chye (Chief Executive Officer), 800 Super Holdings Limited [S$145m market capitalization] provides environmental services for public and private sectors in Singapore. The company offers waste management services, including residential, commercial, and industrial waste collection, as well as recycling service.
Being one of the earliest players in the industry from 1980s, 800 Super offers horticultural services such as grass-cutting, management of landscape and arboricultural services. Their customers include schools, government departments and statutory bodies. In Singapore, 800 Super is one of the only two companies with a L6 grading which allows them to bid for projects without any limits under Housekeeping, Cleansing, Desilting & Conservancy Service.
800 Super is one of the four licensed public waste collectors appointed by the National Environment Agency. The remaining are Veolia ES, SembWaste and Colex Holdings. In each contract won by each public waste collectors, there is a component which allows for revenue adjustments per waste collected and it is pegged to the company’s operating costs or inflation.
Their revenues tend to be defensive and recurring as waste is part of our daily life, including during bad economic times. With Singapore population set to increase, so will our waste output.
Here are Singapore’s waste statistics from 2000 to 2014:
(credit: Zero Waste SG)
Among its clientele are EM Services, Jurong Town Council, Pasir Ris-Punggol Town Council, West Coast Town Council, Singapore Police Force, Singapore Turf Club, People’s Association, Public Utilities Board, Housing & Development Board, and Inland Revenue Authority of Singapore.
800 Super Holdings reported $16.7 mil net profit and 26.2% return on equity in FY2016 – higher than its peer Colex Holdings which has a 22.4% return on equity in LTM FY2016. If we take off its leverage, 800 Super Holdings’ return on asset is 9.4% compared against Colex’s 8.2%. It improved its gross profit margin from 13.9% in FY2008 to 28.7% in FY2016. During the same period, its net profit has grown by an impressive factor of 7.8x. Its share performance year to date was an increase of 74.5%, based on 12 October’s closing price.
Moving forward, 800 Super started to construct their waste to energy plant at Tuas South leasehold land. It is targeted to complete in 2017. Next time, when you think of waste, you will know there is money to be made!
If you are an existing shareholder, 800 Super Holdings will hold their Annual General Meeting on 21 October 2016 at 17A Senoko Way, Singapore 758056.
Have you seen their bins around? Comment where and let us know.
*disclaimer: This article and its contents contain opinions and ideas of its author. It is not a recommendation to purchase or sell securities of any of the companies or investments herein discussed. The article is written with the understanding that its author is not engaged in rendering legal, accounting, investment or other professional services. If the participant requires expert financial or other assistance or legal advice, a Competent Professional should be consulted. The author will not guarantee the accuracy of the information contained in the article. The author has no vested interest in the above company.