Koh Brothers Group

Hi Temperament,

May I ask where you are coming from with your negative impression of Koh Brothers?

Many thanks.

(14-08-2014, 09:32 AM)theasiareport Wrote: Hi Temperament,

May I ask where you are coming from with your negative impression of Koh Brothers?

Many thanks.

Read my earlier postings on this thread.

http://www.businesstimes.com.sg/companie...-3-at-s71m

Koh Brothers' Q3 profit up 3% at S$7.1m
Mixed financial results from builders

By
Mindy Tantanmindy@sph.com.sg@MindyTanBT
12 Nov5:50 AM
Singapore

BUILDERS posted mixed results for the three months ended September.

Koh Brothers saw its net profit for the third quarter ended September rise 3 per cent, from S$6.9 million to S$7.1 million. This is even as revenue slid 7 per cent, from S$88.2 million to S$82.2 million.

(12-11-2014, 07:53 AM)greengiraffe Wrote: http://www.businesstimes.com.sg/companie...-3-at-s71m

Koh Brothers' Q3 profit up 3% at S$7.1m
Mixed financial results from builders

By
Mindy Tantanmindy@sph.com.sg@MindyTanBT
12 Nov5:50 AM
Singapore

BUILDERS posted mixed results for the three months ended September.

Koh Brothers saw its net profit for the third quarter ended September rise 3 per cent, from S$6.9 million to S$7.1 million. This is even as revenue slid 7 per cent, from S$88.2 million to S$82.2 million.

The one problem with Koh bros is that it's ROE is really low compared to other builders

^^^ sell Sun Plaza and pay out div and cap reduction. ROE confirm super high...haha

(28-11-2014, 05:37 PM)opmi Wrote: ^^^ sell Sun Plaza and pay out div and cap reduction. ROE confirm super high...haha

Nope... I exclude extraordinary one off items when calculating ROE......
To assess it's core operations. Not just funded by short term disposals

(28-11-2014, 05:37 PM)opmi Wrote: ^^^ sell Sun Plaza and pay out div and cap reduction. ROE confirm super high...haha

They are refurbishing the whole Sun Plaza. The problem with Sun Plaza is that it is so small and lack of eateries, the undergoing refurbishment don't seems to be extending its NLA, so I am not expect much improvement after the refurbishment.

Comment based on self experience being a Sembawangian and regular Sun Plaza's Fair Price shopper.

(28-11-2014, 05:57 PM)GFG Wrote:

(28-11-2014, 05:37 PM)opmi Wrote: ^^^ sell Sun Plaza and pay out div and cap reduction. ROE confirm super high...haha

Nope... I exclude extraordinary one off items when calculating ROE......
To assess it's core operations. Not just funded by short term disposals

I am referring to the E not R.

Why are you reading this ?
The fact that you want to read about this boring and slow counter shows that you understand the hidden vale in Koh Bros.
If you don't have the extra funds or time, pls stay clear.
This is a slow and steady counter.
The continuous Share-buy-back eliminate the chance of its down side.
31. cts sellers have dried up, followed by 31.5 cts. SBB recently continue to follow through at 32 cts.
Very Slowly Crippling up.
They are extremely patient in their accumulation and many just can't beat their patience and gave up.
Dividend history have been conservative but slightly better than FD rates.
My wild guess is that their borrowing cost can't be lower than their div yield .
So how do they justify their share-buy-back ?
More interestingly, they rather spend their cash on SBB than to give better div.
It is a sound and profitable company trading at a biggest discount to NAV among its peers.
Is this a strategy to keep share price low ?
Is this a sign towards privatization ?

(08-03-2015, 03:29 PM)$wise Wrote: Why are you reading this ?
The fact that you want to read about this boring and slow counter shows that you understand the hidden vale in Koh Bros.
If you don't have the extra funds or time, pls stay clear.
This is a slow and steady counter.
The continuous Share-buy-back eliminate the chance of its down side.
31. cts sellers have dried up, followed by 31.5 cts. SBB recently continue to follow through at 32 cts.
Very Slowly Crippling up.
They are extremely patient in their accumulation and many just can't beat their patience and gave up.
Dividend history have been conservative but slightly better than FD rates.
My wild guess is that their borrowing cost can't be lower than their div yield .
So how do they justify their share-buy-back ?
More interestingly, they rather spend their cash on SBB than to give better div.
It is a sound and profitable company trading at a biggest discount to NAV among its peers.
Is this a strategy to keep share price low ?
Is this a sign towards privatization ?

I was studying this company sometime back, and am still monitoring it. The main problem IMO is the really low long term ROE figures.
Koh Bros ROE over the past 4 years is between 9-12%, and only the latest yr has 12%. The previous years its more like 10%.
The years prior to that is even worse, <6%
And if you study the financials, its not surprising.

They have a fairly large equity base, around 200+mil, but earnings are low. The cash generated is not used to increase their revenue streams, not expanding or looking into new opportunities. Instead, its used for share buybacks mainly.
Yes it is trading at a discount of around 45% to NAV, but many other similar peers are trading around that.
Dividend yield is also notoriously small.
So basically, this is a company which is utilising its free cash for corporate actions like buybacks to support the share price, and not "reinvesting" into the company per say.
Its no wonder the ROE is low.
On the plus side, this hopefully indicates that management does believe the shares are undervalued. Also, there is some sort of a floor to the share price as management has shown a complete willingness to support the price.

I think the ROE is crucial though, and has thus gave this a miss. Still monitoring and revisiting this company from time to time.