Boustead Projects

[specuvestor]

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.

(Not Vested)

CP is rehashing what he has been saying in CES thread. Similarly Nick is saying what I have said there... stock cannot trade near RNAV for asset heavy company which by definition reduces the ROIC, unless they have high payout ratio like the REITS. The again when you have high payout ratio you have low growth as you cannot recycle the asset but have to make cash calls as and when.