Springland International (1170.HK)

[Tiggerbee]

Great China Sale in Chinese departmental stores

I thought I'll highlight this stock for attention considering the deep value I see in this stock.

Springland International (1700.HK) and its subsidiaries are principally engaged in the operation of department stores and supermarkets in Mainland China. The Group is a geographically focused and dual-format retail chain operator in the Greater Yangtze River Delta. The Group operates and manages total 49 stores in 16 cities, which mostly in Jiangsu Province, Anhui Province and Zhejiang Province. It currently operates about 517,000 sqm of dept store space and 175,000 sqm of supermart space, with another 690,000 sqm of shopping mall space in under construction.

Springland 1H 2014 revenue rose 5.3% yearly to RMB 2224 million. Net profit dipped 4.5% to RMB 426 million. 1H 2014 EPS was RMB17 fen. Interim dividend was HK8 cents.

2013 revenue was up 9.3% yearly at RMB 4160 million. Net profit was up 12.1% at RMB 730 million, representing EPS of 29 fen. A final dividend of HK8.5 cents was declared.

It was IPOed at HKD $5.1 back in Oct 2010. Stock hit an all time high of over HKD $8.1 before correcting al the way down to HKD $2.55 over a period of 3 years.
http://www.financeasia.com/News/235815,s...e-ipo.aspx

At HKD 3.15 price to date, stock is deeply discounted below its book value. This is what I had dug out from their financial reports.

2010
Dept stores - 421,800 sqm (10 dept stores)
Super marts - 174,000 sqm (20 supermarts)
Fair value - 6784M (valuation by Jones Lang LaSele, ~75% premium over cost)
PP&E and land use rights - 3873M (at cost)
NAV - $2.29 per share (at cost)
Fair value - $4.04 per share

2013
Dept stores - 517,000 sqm
Supermarts - 175000 sqm
Fair value - TBD (not disclosed)
PP&E and land use rights - 7213M (at cost)
NAV - $2.53 per share (at cost)
Fair value - I estimate at over $5 per share

2014
PP&E and land use rights - 7419M (at cost)
NAV - 2.62 per share (at cost)

At $3.15 HKD, dividend yield would be about 5.8% assuming that FY 2014 earnings is down 4%. Its bigger competitors Intime, Golden Eagle had fared much worse, with profits down 30% and 23% respectively.

Gearing ratio is currently at about 37%. Gearing ratio is calculated by net debt (including bank borrowings, trade payables and other payables and accruals minus structured deposits, restricted cash, long-term time deposits at bank and cash and cash equivalents) divided by the capital plus net debt of the Group. Group has about RMB 2377 million cash on hand.

[ikur1]

I've been vested for abt 2 years now, i haven't been to their stores though...

looking at the chart it's been "undervalue" for a long time, dunno what's happening....

its competitors' share price been holding up better even though the fundamentals seems worse

also in recent year, the chairman step in to buy 180 mil of investment product himself from the company. that is investment made by the company that seems to be under dispute from the chinese banks

for now, ppl are afraid to spend, i was reading abt using gift cards in china from dept store, now also need ID.... so troublesome....

my plan is still to hold thru, i'll probly hav to go their agm to get better feel of management

[fundamentalman]

the stock code should be 1700.hk, i think. 

[fundamentalman]

major shareholder: chen jianqiang (57%). 
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Chen Jianqiang
From Wikipedia, the free encyclopedia

[/url][url=https://en.wikipedia.org/wiki/Chen_Jianqiang#p-search]
Chen Jianqiang
Born
Chen Jianqiang
Hong Kong
Residence
Hong Kong.[1]
Nationality
 Hong Kong
Citizenship
 Hong Kong
Education
M.B.A
Alma mater
China Europe International Business School.[1]
Occupation
Businessperson
Organization
Springland International
Known for
Chairman of Springland International
Home town
Hong Kong.[1]
Net worth
 US$ 780 million (2013).[1]
Chen Jianqiang is the Chairman of Springland International. According to Hurun Report's China Rich List 2013, he is the 401st richest person in China. Chen has net worth of $780 million.[2] He is a first generation entrepreneur and his wealth is self made.[1]

Contents
  [hide] 

• 1Background
  
• 2Business
  
• 3Debate on inclusion in Forbes list
  
• 4See also
  
• 5References
  

Background[edit]
Chen obtained his MBA from China Europe International Business School.[1]
Business[edit]
Chen is into retail business and owns Springland International. Springland operates supermarkets and department stores in Hong Kong. The company went public in Oct 2010.[1][3]
Debate on inclusion in Forbes list[edit]
As per Forbes, Chen's wealth was calculated based on public reports filed with the Hong Kong Stock Exchange. The reports talked about Chen's holding as well as his disposal of approximately 29 million shares towards over-allotment option. Chen's attorney objected to Chen's inclusion in the Forbes list. He however did not refute the information and instead explained that Chen disagrees with the HKSE's requirement to disclose holdings. Chen's is still a part of the Forbes list of richest people.[1]

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not vested.