The Edge's article last week

THE NG family that owns 66.6% of Furama recently offered to acquire the remaining shares of the hotel operator at $2 a share.

That’s a 36.99% premium to the last transacted price prior to the announcement of the privatization offer.

And that’s also a 46% premium to the Net Tangible Asset (NTA) of Furama.

This development shines the spotlight on hotel plays which are trading at sharp discounts to their NTA.

A report in last week's edition of The Edge newsweekly had an article on this topic and the table below.

We added the row of data on Roxy-Pacific Holdings, which is trading at a 52% discount to its Revalued Net Asset Value. Its Grand Mercure Roxy Hotel contributed $18.6 m, or 23% of its total revenue, in the first half of 2009, with virtually all the rest coming from property development. 

Another bargain may be Hotel Grand Central.

Sebastian Chong of considers it a gem, saying in a recent posting in his website: "Apart from the bright earnings growth prospects, the NTA of $1.11 as of 30 June 2009 according to the latest interim results announcement is an understatement of the full market worth of the net assets in my opinion.

"Its new hotel in Little India is still under construction and is stated at cost incurred to date. When it opens in mid-2010, we will appreciate its market value."


  What it owns Recent stock price Premium or discount to NTA Market cap

Amara Holdings

Boutique hotels, resorts & properties in Spore and China 55 cents 69% $317 m
Furama 2 hotels in Spore and stakes in hotels in Taipei & Bangkok $1.98 46% $306 m
Hotal Grand Central Hotels in Singapore, Malaysia, NZ, Australia and China 70.5 cents -42% $346 m
Orchard Parade Holdings Hotels, serviced apartments, offices and properties in Singapore $1.00 -56% $351 m
Roxy-Pacific Holdings 1 hotel (Grand Mercure Roxy Hotel), several investment properties in Spore 26 cents - 52% $165 m

Pamela and daughters at Grand Mercure Roxy Hotel. Read about her family getaway at Roxy by clicking on the link given at the bottom of this page.

Roxy-Pacific’s net asset value is stated as 20.03 cents a share but ..... 

he market value of Grand Mercure Roxy Hotel and office premise was estimated to be $278.4 million based on the valuation carried out by an independent valuer on 31 December 2008, on an open
market value and existing use basis.

If the Grand Mercure Roxy Hotel and office premise had been
included in the financial statements at valuation, the adjusted net asset value per share as at 30 September 2009 would have been 53.59 cents at Group level.

The deemed interest of Roxy-Pacific's chairman, Teo Hong Lim, in the company increased by 100,000 shares on Dec 22 following a purchase at 27 cents apiece by Kian Lam Investment.

NextInsight had interviewed the management of Roxy-Pacific in September. Read: ROXY-PACIFIC: Stock price 28 cents, RNAV 60 cents

Also, Pamela S, an aqua and aerobics instructor, has written extensively about her 'best ever family getaway' at Grand Mercure Roxy Hotel in her blog. Click here.

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