HupSteel

what are the costs and downside risk to redevelopment?
probably have to take a few years and there are demand risks as well rite?

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.

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

(07-12-2012, 09:58 PM)potatolover Wrote: How about the demand risk? There was a period in the 1980s to early 1990s where properties were at a doldrum....??

one solution would be to lease it to reits. garmen cooling measures are directed at housing. not industrial. thus i don't think this would be an issue even if hupsteel were to sell it off as stra units.

and in addition, hupsteel aquired the freehold properties 30-40 yrs ago, if market conditions worsen, they could just wait and see. no loan so no hurry to offload anyway.

(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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look at the share buy back for the past few years and go visit the sites physically. my gut feel is that this stock is going to be a two bagger.


(ps my opinion may be biased since i am vested)
pls do your own research. this is not a buy or sell call.

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?

(07-12-2012, 10:33 PM)Underdogger Wrote: 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?

hupsteel investment prop was last valued in 1992 for purpose. and the value was 14m. but 20yrs later, the properties have yet to be revalued. ur guess for.the revised nav would be as gd as mine. refer to my earlier post. i would think its ard 50c. as for steel, yes, they are barely making money fr.the last quarter result due to poor glibal dteel factors. cash has dropped from 60m to 48m. but this company has been paying dividends regularly since it was listed.

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?

(08-12-2012, 08:09 AM)Drizzt Wrote: 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?

the answer to.that it the type of steel products they distribute and their end users. leemetal supplies lots of steel to smrt. company huat so ceo paid 3m a yr if i.din recall wrongly. hupsteel supplies oil, marine n these just received big orders recently. so hupsteel profits may only be visible 1-2yrs down tge road. asiaent supplies a mixed variety of steel oroducts. but except hupsteel, none has significant hidden asset explosion potential

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.

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.