Thanks for your reply. I just had a quick glance & i still prefer GNP. I don't believe SXE is better value sorry. These are my reasons, based on FY21 financials. 1 / SXE revenue is not growing. 2 / SXE Return on net tangible equity is 23% vs GNP @ 26% 3 / SXE ROE is 8% vs GNP @ 23% 4 / SXE gross profit is 16% vs GNP @ 69% 5 / SXE CapEx appears to just be all maintenance CapEx & no spending for growth?
I'm not sure if SXE are able to design the infrastructure also which GNP can do, which i believe gives it more ability to win projects as they can handle the entire project from design through to commissioning. This allows better control of expenses & delivery of projects which is reflected in the gross margins. Possibly SXE win projects & source out other sub-contractors to complete the works on behalf of SXE??
Based on my quick glance i'm paying 5x EV/EBIT for SXE & 10x EV/EBIT for GNP, however GNP return on equity is 187% higher than SXE. GNP has an ROCE of 22% & SXE has an ROCE of 11%.
IMO SXE my appears cheaper on simple metrics PE, P/BV, EV/EBIT but it should trade cheaper on these metrics as it doesn't appear to deliver the underlying values GNP offers. Growth in revs, ROE, ROCE, internal efficiencies etc.
GNP Price at posting:
$1.29 Sentiment: None Disclosure: Held
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