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what are the costs and downside risk to redevelopment?
probably have to take a few years and there are demand risks as well rite?
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07-12-2012, 09:54 PM
(This post was last modified: 07-12-2012, 10:10 PM by paullow.)
likely they need to collaborate with a mid-large size construction company. look at csi building nearby. it took abt 2yrs to completion. for hupsteel, land is freehold and loan free. and market cap of hupsteel is only 120m.
if building of 6kim chuan dr cost 200psf, if built up 20000x8storeys, construction could cost 32m and going by CSI warehouse selling at 850psf, the completed building could be worth as much as 136m. Minus construction cost, the building would net around 100m and hupsteel has ard 50m cash, enough to cover this construction cost. it could then lease it to reits and enjoy recurring income or sell it as strata units.
and hupsteel owns another freehold building at 38 genting lane closer to the city. it is also getting old and due for rebuild or renovation in matter of time.
Without taking into account of other factors, the new building at kim chuan could be worth net 100m and the genting lane one at least 30-40m, total up these means 130-140m awaits to be unlocked.
and the last valuation in 1992 valued kim chuan, genting lane, jalan besar shophouses and hoenam shoplets at only 14m.
So the revalued nav could be in excess of 50c. at current price of 19c, pb less than 0.4.
imo, this is one of the most undervalued stocks.
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How about the demand risk? There was a period in the 1980s to early 1990s where properties were at a doldrum....??
(07-12-2012, 09:54 PM)paullow Wrote: likely they need to collaborate with a mid-large size construction company. look at csi building nearby. it took abt 2yrs to completion. for hupsteel, land is freehold and loan free. as what a forumer mentioned in an earlier post, valuation for a freehold building is in excess of 80m. and market cap of hupsteel is only 120m. this is not even taking into account an even more prime land at 38genting lane also freehold and its rather rundown and sooner or later due for revamp.
if building of 6kim chuan dr cost 200psf, if built up 20000x8storeys, construction could cost 32m. and hupsteel has ard 50m cash, enough to cover this. it could then lrase it to reits and enjoyvrecurring income or sell it as strata units. freehold industria units l
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07-12-2012, 10:33 PM
(This post was last modified: 07-12-2012, 11:08 PM by Underdogger.)
What is the adjusted NAV, taking into account the latest market valuation of all the freehold lands?
Is there any steel price index to help us gauge whether its core business margin is turning the corners? Or are we still in the doldrums?
How is its performance relative to its peers? Are all doing equally badly?
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actually guys, i find it puzzling why Lee Metal and Asia Enterprise Holding can consistently make money from steel yet some of these were not able to? what's the advantage or issue with this?
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a similar comparison would be hupsteel n lion teck chiang. both have steel biz n portfolio of properties. but if i din tecall wrongly, ltc liabilities n lo ans r greater. second, its industrial properties are newer n still tenanable. big plus point for ltc is its ppties are dem near to mrt. but it may take a long time before a revamp or redev takes place for the reason explained. in addition, look at hupsteel and ltc history of dividrnd payout. which u think is towkay huat shareholders.huat policy? i find little reason to invest in a company when the controlling sharrholders r making tonnes pf money at expense of minority shateholders.
all these factors have to be in thorough consideration. the ar are akin to financial compass of the companies.
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thanks for the explanation. i believe Asia Ent also supplies to oil and marine sector and they are fairing ok.
did you type out those on an iphone haha.