“YOU SMELL IT

BEFORE YOU SEE IT”

DISCLAIMER

Mind Kinesis Investments Pte Ltd & Value Investing Academy is not operated by a broker, a dealer, or a registered investment adviser. Under no circumstances does any information provided in these notes represent a recommendation to buy or sell a security.

In no event shall Mind Kinesis Investments Pte Ltd & Value Investing Academy be liable to any participants, guest or third party for any damages of any kind arising out of the use of any content shared here including, without limitation, any investment losses, lost profits, lost opportunity, special, incidental, indirect, consequential or punitive damages.

Past performance is a poor indicator of future performance. The information on this presentation is not intended to be, nor does it constitute, investment advice or recommendations. The information on this site is in no way guaranteed for completeness, accuracy or in any other way.

DISCLAIMER

Please note that this case study was shared during World Value

Investing Fest in July 2015 in an exclusive workshop called “Invest with

Mary Buffett” in front of about 80 participants. Ms Mary Buffett was the

Key Note Speaker as well as other Value Investors.

800 SUPER HOLDINGS

LTD

BY CAYDEN CHANG, MIND KINESIS VALUE

INVESTING ACADEMY

AGENDA

1. Why waste management?

2. Strategies for waste management

3. Who are the Public Waste Collectors

(PWCs)?

4. Case Study

5. Management

6. Valuation

1. WHY WASTE

MANAGEMENT

2. STRATEGIES

FOR WASTE

MANAGEMENT

3. WHO ARE

THE PUBLIC

WASTE

COLLECTORS?

800 Super Holdings Ltd (5TG.SI) Colex Holdings Limited (567.SI)

Sembcorp Industries Limited (U96.SI) Veolia ES Singapore

Industrial Pte Ltd

4. CASE STUDY

WHAT BUSINESS

WHAT BUSINESS

1) Integrated Public

Cleaning

2) Contract Cleaning

WHAT BUSINESS

1) WASTE & RECYCLING MANAGEMENT SERVICES

• Re-awarded a public waste collection contract for a period of 7 years and 9 months

commencing from 1 January 2014 to provide waste collection services for the

residential and trade premises in the Ang Mo Kio – Toa Payoh sector.

• Provide recycling services to complement our waste collection services. These

recyclable materials are then separated, compacted and packed into bales, which are

then sold to local and overseas customers, providing another source of income

for the Company.

WHAT BUSINESS (MARKET STRUCTURE)

Waste management market structure in Singapore is an oligopoly

between four Public Waste Collectors (PWCs). PWCs are

appointed by NEA. The four players in the market are outlined in the

following table. With the exception of Veolia ES Singapore Pte Ltd, the

Parent Company of the other three players are listed on the

Singapore Exchange.

WHAT BUSINESS

2) CLEANING AND CONSERVACY SERVICES

(a) INTEGRATED PUBLIC CLEANING SERVICES

• In February and July 2014, we were awarded two contracts to provide integrated public

cleaning (IPC) services for the North-west and South-west region of Singapore for 6 years and

seven 7 years respectively. The IPC contract for the North-west of Singapore commenced on 1

April 2014 while the IPC contract for the South-west region of Singapore commenced on 1

September 2014.

• Both IPC contracts provide cleansing services which cover roads, pedestrian thoroughfares,

carparks, parks, drains, beaches, shorelines and waterways.

(b) CONTRACT CLEANING SERVICES

We clean external facades and interior of buildings as part of our contract cleaning and

conservancy services. Our contract cleaning services are provided to residential, commercial,

industrial and institutional customers.

WHAT BUSINESS (MARKET STRUCTURE)

IPC contracts are managed and tendered by NEA. The industry is

also an oligopoly between five service providers listed below.

WHAT BUSINESS

3) HORTICULTURAL SERVICES

Our horticultural services include grass-cutting, planning and maintenance of landscape

and aboricultural services that include the planting and pruning of trees and plants. These

services are provided to schools, commercial customers, government departments and

statutory bodies.

WHERE ARE THEIR

BUSINESSES?

WHAT TYPE OF COMPANY?

TYPE OF COMPANY

MEDIUM GROWTH COMPANY!

PAYS DIVIDEND

Dividend Yield = Annual Dividends/Stock Price

ANY DIVIDEND SINCE GROWTH

IS NOT THAT GREAT?

Why the dividend yield falls about 50%?

Dividend Yield = Annual Dividends/Stock Price

FUTURE PLANS

MRF =

Recycling

Facility

FUTURE PLANS 1. 4 Incineration Plant in Singapore

2. Waster incinerated and steam is used to produce steam in boilers,

which is then used to drive turbines to produce electricity.

3. Refuse collection vehicles arriving at the WTE (Waster-to-Energy)

plants are first weighed on a weighbridge. The vehicles are weighed

again after they discharge the waste. The before-and-after weighing

process allows the WTE plant to track the amount of waste being

brought for incineration.

4. Possible benefits: 1) Reduce costs in waste disposal, 2) Extra revenue

is disposing other companies’ wastes

GROWING AMOUNT OF WASTE

vc

POSSIBLE ECONOMIC MOAT

(FOR NEXT 6 YEARS)

1. Licensing – License by NEA

(National Environment Agency)

2. Toll-Bridge

PREDICTABLE EPS?

MARGINS

CASH FLOW FROM OPERATIONS?

ROE, ROA

C

C

DEBT?

#8A: S.W.O.T

Strengths:

1. Long-time player with over 20-years' experience in waste management.

Diversified pool of customers from both private and public sector.

2. Diversified range of services with forward integration to Material Recovery

Facilities (MRF).

3. Already have two MRFs in place, getting paid to collect recyclable

material, and selling the material after sorting. A third MRF is under

construction.

Weaknesses:

1. Opportunities are restricted as currently operating predominantly within

Singapore.

2. Difficulty in hiring manpower for waste management industry.

#8A: S.W.O.T

Opportunities

1. Population growth leading to development of more residential and

commercial areas, thus requiring refuse collection and cleaning services.

2. Economic growth leading to higher disposable income and greater

propensity for consumption, resulting in replacement of consumer goods

and increased waste generation.

3. Government initiatives raising environmental awareness, leading to more

recycling of waste.

Threats

1. Unsuccessful in renewing existing contracts or gaining new contracts.

2. Shift in Government policy to allow more competition into the industry.

Increase in labour cost, affecting profitability.

5. MANAGEMENT

Exec Chairman

CEO Brother of Chairman & CEO

Sister of Chairman & CEO

Brother of Chairman & CEO

Exec Chairman

CEO

6. VALUATION

UNDERVALUE?

Scenario #2

If you invest at $0.5060

Potential Upside for the next 6 Years:

18.4% + 4.26% of Div Yield

Scenario #1

If you invest at $0.5783

Potential Upside for the next 6 Years:

4.1% + 4.26% of Div Yield

Potential Downside:

Might take place after 6 Years

Estimated Intrinsic Value Range: $0.5060 - $0.5783

DISCLAIMER

Mind Kinesis Investments Pte Ltd & Value Investing Academy is not operated by a broker, a dealer, or a registered investment adviser. Under no circumstances does any information provided in these notes represent a recommendation to buy or sell a security.

In no event shall Mind Kinesis Investments Pte Ltd & Value Investing Academy be liable to any participants, guest or third party for any damages of any kind arising out of the use of any content shared here including, without limitation, any investment losses, lost profits, lost opportunity, special, incidental, indirect, consequential or punitive damages.

Past performance is a poor indicator of future performance. The information on this presentation is not intended to be, nor does it constitute, investment advice or recommendations. The information on this site is in no way guaranteed for completeness, accuracy or in any other way.