Lotustpsll: Deep Value Plays (with Identifiable/Potential Catalysts)

Price

NAV

Price/NAV

Mandarin Oriental

US$1.96

$3.10

0.63

Bund Center

$0.79

$2.65

0.30

Singapura Finance

$1.035

$1.60

0.65

Monetisation of Property Assets in China

The iconic Bund Center property, with a remaining lease of 35 years, located in the Shanghai CBD should attract keen interest in the market if offered for sale. The Widjaja family owns 84% of Bund and the possibility of a buyout of minority interests should not be discounted.

With the remaining land lease getting shorter, I expect the family to consider the options available to generate returns on its investments.

The Westin Bund Centre Shanghai. Photo: CompanyBund Centre Investment owns the Bund Center office tower, the Westin Bund Center Westin Shanghai hotel, and the Golden Center shopping mall in Ningbo. The office tower has a total gross floor area of approximately 140,000 sqm, comprising of 50 floors (including podium) of super-grade A office premises.

Being one of the tallest structures in the Bund skyline and with its crown rooftop, it is now an iconic landmark on the Bund.    

The hotel has two 26-storey towers, consisting of 570 tastefully decorated guest rooms and is currently the flagship Westin hotel in China.

The Mall at Ningbo has a total gross floor area of 200,000 sqm. The whole complex consists of a 6-storey retail complex, a 32-storey office tower and a 52-storey luxurious residential tower. It is strategically located in the central business district area of Ningbo.

The balance sheet of Bund remains strong (net cash position) and the stock pays a decent dividend yield of close to 5%. 

Serving shareholder interest

“In my view, shareholder interest is better served by disposing of its finance business and to consider other business ventures or to return cash to its shareholders.  The sale of the finance business could fetch 1x to 1.2x of book value."

- Lotustpsll  (photo)