It is important to know what a particular company does and how it makes its money before investing in it. Investing in a business without such a knowledge is akin to travelling to an unknown territory without a map.
On that note, let’s check out what business Boustead Singapore Limited (SGX: F9D) is involved in and how it generates its revenue.
The firm, which was established in 1828, is a global service provider of infrastructure-related engineering services and geo-spatial technology. It also happens to be Singapore’s oldest continuous business.
The annual report of Boustead is able to clue us in on the business segments it has and the revenue raked in by each segment. Let’s look at the table below for the revenue contribution of each segment for the financial year ended 31 March 2017 (FY2017):
Source: Boustead Singapore Limited Annual Report 2017
Energy-Related Engineering relates to the design, engineering and supply of systems to the oil and gas, petrochemical and solid waste energy recovery industries. The division also provides water and wastewater engineering in which it designs, engineers and constructs industrial and municipal water and wastewater treatment plants. Water and wastewater engineering used to be a separate business division but it has since been absorbed into the Energy-Related Engineering division.
Next, the Real Estate Solutions division provides design-and-build expertise for industrial facilities, along with design-and-building-and-lease arrangements for industrial facilities. This division, which goes by Boustead Projects Ltd (SGX: AVM), is 51% owned by Boustead Singapore.
Last but not the least, the Geo-Spatial Technology division specialises in geographic information systems and location intelligence solutions using the Esri platform. Esri is the world’s leading geographic information system and some of its users include key government agencies and multinational corporations across eight exclusive markets in Australia and parts of South East Asia, including Singapore.
Behind every ticker symbol lies a living, breathing business. Buying a stock without fundamental knowledge of what the company does and how it makes money can be dangerous.
Once we know the basics of a company’s revenue streams, we can then delve into other aspects of the firm such as its profitability, strength of its balance sheet, its cash generating abilities, and more.
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