Keck Seng (0184)

[bmann025]

http://seekingalpha.com/article/2418555-...ide-to-nav

[opmi]

I have been to keck Seng Msia AGM. The board is sleepy and passive. I think keck Seng group of companies are value traps. Until catalysts appeared like death. Even after property sales, they also won't return as dividends.

For pure play on macau, there is better play eg polytec.

But don't take my word for it.

[bmann025]

I would not agree with that except on very short time scales. Over 1 year, the stock increased by over 50%, over 2 year by over 100%. It went up in steps, so yes, this may have often appeared to be not moving over a few months.

I find that article in #1 (including the comments) really well researched, a catalyst in the author's view may be the resumption of sales of Macau properties, perhaps in 2015. If the share price proceeds on the path of the last 2 years, it will not be hard to keep for another year or two.

[bmann025]

Value Investors Club has another, very detailed article

http://www.valueinvestorsclub.com/idea/K...nts/114379

[opmi]

"Catalyst

Continued growth in recurring FCF, very low P/FCF multiple"

Unless someone croaks, hard to unlock value.

[bmann025]

???

Has been trading above 7 dollars - ATH - for the last 6 days.

[opmi]

Basically the old men at Keck Seng still there, nothing going to happen until they pass on.
So wait for the Annc "Demise of Director"

Unless they privatize it. Then the realisation value will be capped at 50% upside from mkt price. Wont be multi-baggers.

So far, has they paid out any special dividends or big share buybacks??? If not, unlocking value for ALL shareholders is NOT on the cards.

[constanty]

Thank you all, especially Boon and Peking duck, for this very courteous forum on Forterra Trust. It was very informative. As a suggestion for recycling our hard earned capital gains may I suggest another SE Asian-listed property company: Keck Holdings (184:HK).

Keck Seng is such an interesting play where value just is hiding in plain sight. Keck is a global hotel player unduly screened and valued like a HK or Chinese property stock, with a discount to book that beggars belief. Fraud probability is low, they have been listed since 40 years. Those guys are true value investors, I highly recommend reading the bio of the founder, a true rags to riches tale. http://blog.nus.edu.sg/joto/2011/02/06/o...ase-study/

I view Keck as an asset conversion play, where the margin of safety in terms of book value is so large, (and also supported by a 2.5% dividend yield), that I can wait for some medium term catalysts.

Let me tell you what I see as a quick back of the enveloppe sum of the parts…. HKD 7.50 last share price =MCap of HKD 2600m.
Vietnam: they own 64% of Sheraton Saigon and 25% of Caravelle, it is their cash cow with the hotel+casino yielding recurrent EBITDA say HKD 268m FY 2014e, for a turnover of HKD 630m. This Vietnamese business alone contributes 58 cts to the net income per share. Lets value at HKD 2233m.
USA: W in San Francisco:bought for HKD 700m in 2009 =US$90m at 15% cap rate, $220k per key (~400 rooms), now worth about HKD 1900m, Ebitda about HKD 112m/FY.
Sofitel in NY (~390 rooms): bought july 2014 for US$265m~HKD 2000m, US$690k/key, NOI 2013 US$13.5m, they have basically used their spare net cash to buy it (they had net cash of HKD 1,700m end of June 14).
Canada :Sheraton Ottawa, Doubletree Toronto-lets use last book value of HKD 80m
Japan: Best Western Osaka bought for HKD 177m in 2010, lets use HKD 200m. EBITDA HKD 17m FY 2014 e
China: Holiday Inn in Wuhan , EBITDA estimate HKD 10m FY 2014, book value was HKD 230m
Macau: they own 38,000m2 of residential, office, commercial and industrial. Rental Income is 2014eHKD 69m; using various datapoints I value this piece of Real estate at HKD 3000m. Remember- thanks to increased infrastructure in 2015/2016 (bridge to Macau from HK airport, light railway with stops at their residential complex Ocean Gardens, bigger ferry terminal, etc…) they should be able to resume selling their units at market median prices as soon as they wish.

Lets recap what we get in book value in HKD/share:
US Sofitel 6.04
US W San Fran 5.58
Macau units (mostly resi, easy to sell) 8.82
Vietnam- cash cow- 6.56
Japan+Canada+China=1.50 (HKD 510m), ie enough to offset the net liabilities-for which l assume HKD 520m.

That’s a total SOTP of HKD 27 per share….a ~75% discount for a value global hotel player diversified, underleveraged,dividend paying; I am happy to wait for the Macau units marketing resumption in the next 18 months or so. Their dividend/FCF payout has been OK but not high, between 25% and 40% last 5 years, but in 2006 and 2007 they have paid super-dividends and pay-out ratio was more like 90%. They tend to hoard cash when hotel prices get frothy in various markets and wait before deploying; W san Fran is case in the point, and by the same token they are sitting on massive hidden value in Macau and will try to seize a market top of some sorts to exit.

By all means read the full bio of the founder very moving story.

[CityFarmer]

There already a existing thread for the company, thus I move the post there.

Regards
Moderator