Asian Dividend Gems: Soft World Intl (5478 TT)
Soft World International has an integrated value chain/sizeable moat for its game development, distribution, payments, content, and events in Taiwan.
The company is trading at attractive valuations. It is trading at EV/EBITDA of 3.7x, P/E of 13.4x, and P/B of 1.5x based on recent prices and LTM financials.
Net cash as a percentage of market cap is 79%. The company's dividend yield remained steady at 6% in FY23 and FY24.
Source: Company data
Key Investment Highlights
The following are the five key investment highlights of Soft World Intl (5478 TT):
Integrated value chain/sizeable moat - The company has an integrated value chain/sizeable moat for its game development, distribution, payments, content, and events in Taiwan.
Consistent dividends - The company's dividend yield averaged 6% in the past two years and there is a high probability that dividend yield continue to average 5-7% in the next several years.
Stable sales/net profit growth - We believe the company could generate 5-8% per annum sales growth and 10-15% per annum net profit growth in the next three years.
Very high net cash as percent of market cap - Net cash as a percentage of market cap is 79%.
Cheap valuations - The company is trading at attractive valuations. It is trading at EV/EBITDA of 3.7x, P/E of 13.4x, and P/B of 1.5x based on recent prices and LTM financials. Its current EV/EBITDA, P/E, and P/B ratios are 33%, 13%, and 13% discount to its historical valuation multiples from FY 2020 to FY 2024.
