I notice that quite a few property-related stocks that have high RNAV are recently getting noticed and played up. Among them are Gallant, Tuan Sing, Roxy-Pacific and Stamford Land. The high RNAVs provide a good support to the underlying share price, compared to earnings story stocks without asset backing.
These are RNAV property-related stocks that I own and like:
Likes: RNAV of close to 80cts, management is quick in selling units in land that it purchases and this allows it to buy new land for new projects, news soon to be released of sale of units at Kovan and Spottiswoode condos, possible redevelopment of Roxy Square which is near to new MRT station.
Cautious: Part of RNAV is from hotel value, which should be discounted in a similar fashion as other hotel stocks. Chart looks a tad risky.
2. Stamford Land:
Likes: RNAV of about $1.20, profits from Sydney condo project to be booked in 2011 all at one go as company realises profit only on completion (project is almost all sold out), potential cash inflow from sale of Perth office block, potential development of land that its hotels sit on in Australia (especialy one in Sydney), potential sale of all its hotels will boost cash asset substantially. Chart looks comfortable.
Cautious: Valuation from its hotel business can remain unlocked for many years, unless the hotels are sold.
3. Hiap Hoe:
Likes: RNAV of about 90-95cts, 95% of profit of more than $270m from its 2 main projects Waterscape and Skyline have yet to be booked leading to nice earnings story apart from its high RNAV, potential divestment of its hotel/office/retail project at Zhongshan Park in Balestier will realise another $100m in gross profit, possible privatisation as stock is 70% owned by 1 major shareholder. Chart looks nice.
Cautious: Management is a bit slow in selling its condo units and prefer a strategy of low-cost, low-profile launches. Not aggressive compared to Roxy-Pacific. Illiquid.
Likes: RNAV of about $1.20, company's condo projects are on land bought at cheap prices so risk are low, possible suitor for Sun Plaza may still come knocking although Heeton had not found a buyer for it yet (large cash flow if this is sold), launch of Killiney project (which will have more saleable small units; land bought at low price) in 1H 2011 could be a share price catalyst if sales are good, possible privatisation. Chart looks safe.
Cautious: Luxury market has refused to move, leading to no new sales at its 2 luxury products at Grange Road.
Likes: RNAV of about about 50-55cts, 50% stake in Zhongshan Park is sitting on $100m undervaluation once completed (or about 30cts per share, gross), possible privitisation as it's more than 70% owned by Hiap Hoe Holdings Pte Ltd, the same parent company as Hiap Hoe Ltd. Chart looks safe.
6. Others: Lion Teck Chiang (factories next to MacPherson to be converted to other use?), Bukit Sembwang ($100m Q3 profit from sale of 41 units of Paterson Suites; exposure to landed prop sector; 100th anniversary in 2011), Koh Brothers (big profit from Lumos if sold), Sing Hldgs (generous dividend policy)
I am disappointed with Lafe's recent sale of its Panyu land and HK subsidiary. Very little information was given, and the terms of the sale were not in Lafe's favor. The Panyu land money will be collected in over 40+ instalments while the HK sale seems to be paid in promissory notes. These put the company at risk. The sales were also not based on open tenders.
Lafe is therefore not one of my preferred undervalued property counters.
1. Bt Sembawang got upgraded by CIMB today. Report highlights RNAV of $8.38, its vast cheap land (eg Paterson area, St Thomas Walk area, Sembawang), the sale of 41 units at Paterson Suites (this alone could add $100m gross profit), exposure to the landed sector, etc. CIMB also talks about launch of The Vermont (launched over the past weekend, with about 50% sold so far), Luxus Hills site's potential for 944 landed homes (Bt Sembawang is the only listed company with such a big exposure to this sector) to be launched over next 10 years, etc. Target price conservatively set at $5.86, 30% discount to RNAV.
2. Hiap Hoe - chart breakout on good volume.
3. Stamford Land - going up on good volume.
4. Heeton - share price still stuck, with somewhat heavy selling. Probably due to lack of catalysts. But high RNAV of above $1.20 will support price, and catalysts could come in 2011 from launch of Killiney project at reasonable and saleable price (land bought cheaply) and perhaps sale of some units at its 2 Grange Road projects.
5. Superbowl - chart breakout on higher than usual volume.