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31-05-2015, 07:32 AM
(This post was last modified: 31-05-2015, 05:15 PM by CityFarmer.)
Properties held for sale and investment properties are definition legacy issues from Boustead Singapore. They are the same. Investment properties only start to emerge after a certain year. Co claimed that accountant adviced them to adopt a different accounting definition.
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BP just like the parent are more eager to keeping building their portfolio rather than selling them anytime soon.
[Edited by moderator]
BP just like the parent are more eager to keeping building their portfolio rather than selling them anytime soon.
(31-05-2015, 02:13 AM)Curiousparty Wrote: Tks Nick.
Key is its recurring income. For 2015, there will be 4 additional properties completed in 2014 which would greatly enhance its recurring income. (page 2 of prospectus).
[2 new + 2 partial new]
Trading at deep discount to RNAV is just one of the many metrics but not necessary the key one. Key is the innovation of the management.
But pls also note that it has "properties held for sales" placed under "current assets". If these are sold off, then revaluation gains would be realized.
Book value of these held-for-sales assets = $30mil.
Market valuation (page 2 of prospectus) = $107.6mil
Revaluation gain= ~$0.24.
(31-05-2015, 01:45 AM)Nick Wrote: To be fair, with the exception of REITs, I can't think of many listed companies with a large rental income stream trading at their RNAV level. Companies such as Hwa Hong (freehold UK, SG assets), Ho Bee Land (prime UK properties and Metropolis), HK Land (crown jewels all over Asia) and UIC (owns Singland) trade at a significant discount to their RNAV. I won't find it surprising that BP (owns leasehold industrial properties) trade at a discount too. Perhaps, this is due to the RNAV failing to capture the PV of the corporate and tax cost in these corporate entities.
I would prefer valuing BP using the income stream method since it is unlikely to be liquidated. I have no idea what income stream the D&B division will post. But as you have mentioned, the DB&L earnings should be easily extrapolated. More contracts, more earnings. The converse is also true.
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