2nd Chance Properties

I like second chance for their good corporate governance.

Looking at the past years chart the stock price has been flat but it's the dividend and bonus issue they gave that multiply our returns.

Just wondering why they priced their coming warrants at $0.40 (if I recall correctly). They must be very optimistic about their prospects.

I am reviewing 2nd Chance properties Ltd which is under my watch-list.

There are bonus warrants been awarded to shareholder now, one (1) bonus warrants to every one (1) existing ordinary shares. Exercise-able from 3rd - 5th year from issue date i.e. 2012 @ price of $0.40

The share price close today @ $0.39

It seem attractive if you are optimistic on the future, but market price does not seem responding to the bonus warrants?

I also notice from historical price chart, the share price also did not move much after the previous bonus issue awarded, one (1) bonus share for every four (4) existing ordinary shares in Feb 2011?

Any comment?

wealth has been consistently returned via generous div payment.

In any event, 2nd chance is a small outfit. Nothing wrong with its strategy given its size. However, for it to grow substantially, risks involved will rise substantially and moreover there are plenty of steeply discounted developer and property owners around not to mention REITs.

Likelihood, 2nd Chance will remain a cheap warrants on the broad sector that is already trading at steep discount to book values.

(02-07-2012, 05:35 PM)CityFarmer Wrote: I am reviewing 2nd Chance properties Ltd which is under my watch-list.

There are bonus warrants been awarded to shareholder now, one (1) bonus warrants to every one (1) existing ordinary shares. Exercise-able from 3rd - 5th year of issue date i.e. 2012 @ price of $0.40

The share price close today @ $0.39

It seem attractive if you are optimistic on the future, but market price does not seem responding to the bonus warrants?

I also notice from historical price chart, the share price also did not move much after the previous bonus issue awarded, one (1) bonus share for every four (4) existing ordinary shares in Feb 2011?

Any comment?

Base on my analysis, the poor market response to the bonus warrant might due to the following

Historically, 2ndChance share value had been diluted via bonus issue, script dividend scheme, and exercising of warrants. The bonus warrant is exercise-able only after the 3rd year. The share price probably already diluted by additional shares of

- 8% annually by script dividend, and total 24%+ in 3 years (assume all shareholder subscribe to script dividend scheme, and EPS stagnant)
- existing 150 Mils warrant will bring another 25%+ dilution (assume all exercised)
- possibility of another bonus issue awarded in the next 3 years?

IMO, It has practically make the bonus warrant worthless.

Any other views?

(03-07-2012, 09:28 AM)CityFarmer Wrote: Base on my analysis, the poor market response to the bonus warrant might due to the following

Historically, 2ndChance share value had been diluted via bonus issue, script dividend scheme, and exercising of warrants. The bonus warrant is exercise-able only after the 3rd year. The share price probably already diluted by additional shares of

- 8% annually by script dividend, and total 24%+ in 3 years (assume all shareholder subscribe to script dividend scheme, and EPS stagnant)
- existing 150 Mils warrant will bring another 25%+ dilution (assume all exercised)
- possibility of another bonus issue awarded in the next 3 years?

IMO, It has practically make the bonus warrant worthless.

Any other views?

i feel that with the scrip dividends, a long term shareholder will end up holding more shares but the share price would more or less stay the same.

but i wont say that the warrants are totally worthless. If property prices in singapore would rise steeply, then higher rental should also see the shares rise in tandem

Anyway since the warrants is free, might as well just take it

*vested

Mr Market price the warrant at approx 2.5 cts this morning after xb

The previous warrant also price @ S$0.4 (before exercise price adjustment). The exercise rate is minimum which is logical since market price is always below S$0.4

In FY2011, with the bonus award and new adjusted exercise price of S$3.2, we had seem higher exercise rate. We had seen increasing warrant been exercised recently, probably target on the bonus warrant.

So base on history, the warrant may be worth a bit when new bonus share/warrant been issued in future, rather than relies on share price.

I am vested, after "rotated" out from existing stocks, and aiming mainly on the more than 8% dividend in near future

I agreed with your statement. "since the warrants is free, might as well just take it".

(vested)

I am expecting first and final dividend of 3.3 cts, dividend yield of 8.6% @ S$3.85 (w/ free bonus warrant)

http://info.sgx.com/webcorannc.nsf/Annou...endocument

The Board of Directors of Second Chance Properties Ltd (the "Company") is pleased to announce that the Company would be releasing its unaudited financial statements announcement for the period ended 30 June 2012 on or around 2 August 2012.

The new warrant W170724 is listed today.

Mr Market value the warrant to S$0.028 now with volume of more than 3000 lots. There is an increasing interest on the warrants

With the share price of S$0.375 and warrant exercise price of S$0.40, Mr Market is very optimistic with the prospect of the company

(vested)

you can't think like that.

warrant is a cheap/low-risk bet on the prospects of 2nd chance properties.

the capital outlay for 100lots of warrant is S$2,800. The most you can lose is the S$2,800. the upside is unlimited.