Recently, i did an evaluation on Sarin Technologies which is listed on SGX.Here is a summary from its annual report of its main businesses.

"Our products currently provide the diamond industry with technological solutions for five main areas:
(a) Planning the optimal utilization of the rough stones in order to cut the rough stones so as to achieve the maximum yield and value;
(b) Sawing, cutting and shaping of rough stones using advanced green laser technology, so as to significantly reduce the risk of stone breakage and reduce rough material waste;
(c) Polishing the facets on rough stones to transform them into polished gems, by using Sarin-developed disposable polishing discs, as source of recurring income for the Company;
(d) Measurement of two (Colour and Cut) of the four parameters of the polished diamond (Colour, Cut, Clarity and Carat) in order to help determine the value of the diamond, based on the quality grade of its colour and cut, as well as light performance measurement systems for enhancing a polished diamond’s certification; and
(e) Inscribing on polished diamonds with distinct marks like text, numerals and symbols, so as to aid in the diamond’s identification and personalisation.
Our business strategy is to consolidate our position as a market leader for the provision of high technology solutions in the diamond and gemstone industries"

Its largest market is India where 77.4% of its revenue comes from there.With the indian economy promising to maintain its stellar growth,this will continue to be a profitable source of operations.

Also, management has continued to maintain a large stake in the company,indicating their belief that the company will continue its growth

Ratios

Average net margin for last 5 yrs is 24.68


Current working capital ratio is 0.34 and stock is trading at a 20% premium
4 yr average ROA is 75.68%
4 yr average ROE is 156.9%
Current ratio is a healthy 2.98
Free cashflow per share after net capital expenditures is 0.14.So the stock is really selling at 0.41

Calculated intrinsic value is 0.75 USD. Buy price would be 0.56 USD

Assumptions:Using a 3 stage DCF,with growth rate of 20% for first 5 years, followed by 10% for the next 5 years and a terminal growth of 3%.Also assumed a debt level of 10% and discount rate 15% & a margin of safety of 25%

Written by Manpreet