Roxy Pacific - undervalued

yeng
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Platinum Member

12 years 11 months ago #6038 by yeng

Replied by yeng on topic Re:Roxy Pacific - undervalued

omg, CIMB analyst:

a) bo zhun
b) didnt get insider leaked info.
c) undervalued the stock.

Allgreen Properties (AG SP; Trading Halt; UNDERPEFORM; TP S$1.17)

What happened: Allgreen has announced a trading halt for its shares last Fri evening, 20 May. Management is currently in a meeting, and is not available for further comments.
What we think: While the stock is cheap, we do not think privatization of the group is the reason. The stock has been much cheaper before. Our recent meeting with management also suggest that a special dividend of sorts is not possible at this juncture. We speculate this could be China related, perhaps (i) Increasing more equity stakes in on-going mixed-development projects jointly developed with its sister companies Kerry Prop and Shangri-La OR (ii) Acquiring equity stakes in Wilmar's recent China property venture OR (iii) Acquiring 3rd party landbank in China, which is likely in the mass market/government-linked townships space, in our view. If true, we believe the news will not excite investors too much. Majority stakes in China projects will be viewed more positively than minority stakes as suggested by the market's response to its China JVs with Kerry and Shangri-La in 2007. Mass market / townships space likely to be more favourable vs. high-end as well.

What you should do: Maintain UNDERPERFORM pending lifting of trading halt.

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jinraidx
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12 years 11 months ago #6050 by jinraidx

Replied by jinraidx on topic Re:Roxy Pacific - undervalued

ABB, Sorry I was away for a while.
Re the $10m profit rise from $9m last qtr, its in line with expectations. Property development is recognising less revenues. However this is helped by rise in hotel and the investment property side which I highlighted in the blog. Development side may see some weakness but firm recognises that and started to acquire more land of late.
Their hotel remains very undervalued and I think it is unwise to look at quarterly earnings performance when the value of the hotel alone is more than its current market cap. The additional development profits is really not a big concern, so a increase is an icing on the cake whilst a decline is really not damaging to the value of the firm.
More importantly is the land on which the hotel is sitting on. So doing all the PV and discounted cashflow on the hotel is also not meaningful. Just take a bus down, sit opposite Parkway Parade and observe the crowd and you will get what I mean.
Analysts reports have typically placed a 20-30% discount to RNAV value of property developers due to risk of execution and gearing. The discount of which is unwarranted brings down the value of the stock to fit the analyst's story. Seriously, look at the sales ...its hardly ever below 95%, I remain a buyer of Roxy at current levels. Their level of pricing, type of houses also means that its still very affordable and unlikely to dip vastly in view of current measures implemented by the government.
On the other hand, Hiap Hoe is just fairly valued imho.

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pine
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12 years 11 months ago #6061 by pine

Replied by pine on topic Re:Roxy Pacific - undervalued

Thank you Jinraidx. 1 more question on the recent announcement by Roxy: do you think it can make good money by disposing of its stake in 70 Shenton Way? Why do you suppose it is selling out? I thought it would stay with the consortium and redevelop the property and sell it for a profit at a later date.

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jinraidx
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12 years 11 months ago #6064 by jinraidx

Replied by jinraidx on topic Re:Roxy Pacific - undervalued

If you can buy somethng at $148m and sell it at $270m, what do you opine?
On why they are selling, your guess is as good as mine. But there could be several:

1) Additional charges make redeveelopment cost ineffective
2) Differences within the consortium
3) They may be seeing some market data that is negative

Overall, if they can sell, thats a positive and people should not blast them for speculation since it is not usual for people to buy and flip the land as the charges are not cheap.

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Rich
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12 years 11 months ago #6207 by Rich

Replied by Rich on topic Re:Roxy Pacific - undervalued

Roxy is well-supported at 46 cents with 100 lots in the Q to buy. Big discount to its RNaV

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Joes
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12 years 10 months ago #6487 by Joes

Replied by Joes on topic Re:Roxy Pacific - undervalued

reck, ok i agree.

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