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What Does Boustead Projects Ltd Do and How Does it Make its Money?

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 Projects Ltd (SGX:AVM), which is 51%-owned by Boustead Singapore Limited (SGX: F9D), is involved in and how it generates its revenue.

The annual report of Boustead Projects is able to clue us in on the business segments the firm has and the revenue raked in by each segment. Let’s take a look at the table below for the revenue contribution of each segment for the financial year ended 31 March 2017 (FY2017):

Source: Boustead Projects Annual Report 2017

Revenue from the Design-and-Build segment comes from providing turnkey design-and-build expertise for custom-built facilities, like industrial and commercial buildings, for MNCs and local companies. To date, this segment has constructed and developed more than 3 million square metres of industrial real estate in Singapore, China, Malaysia and Vietnam. Some of the market segments serviced include aerospace, healthcare and pharmaceutical, high-tech manufacturing, and oil and gas.

Meanwhile, the Leasing business segment offers development and property management expertise for custom-built facilities that are leased to MNCs and local enterprises. Its industrial leasehold portfolio of 17 completed properties mainly consists of single-tenanted custom-built industrial facilities.

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.

Meanwhile, for more (free!) stock analyses and investing tips, sign up here for your FREE subscription to The Motley Fool's investing newsletter, Take Stock Singapore. It will teach you how you can grow your wealth in the years ahead.

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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore contributor Sudhan P owns shares in Boustead Projects Ltd and Boustead Singapore Limited.