Lee Kim Tah Holdings

Quote:Mr Market ought to have the same motivation to re-rate LKT.

The motivation may be coming from Tuan Sing. I believe these managements can be broadly grouped together.

Another company that displayed the same characteristics is Metro Holding. It's starting to move... .

(29-12-2010, 04:46 PM)cif5000 Wrote: I think Guthrie GTS was more undervalued to begin with.

Having said that, why should an investor choose LKT over Guthrie if he is interested in JP?

You can't say that for sure, just by looking at the bigger gap between Guthrie GTS's NAV/share of $0.66 (as at 30Sep10) and current share price of $0.455 (last done), vs. LKT's NAV/share of $0.6267 (as at 30Sep10) and current share price of $0.54 (last done).

The fact remains that LKT's controlling shareholder Lee Family has been constantly buying more shares from the open-market, and paid $0.535/share in the last transaction on 24Dec10.....
http://info.sgx.com/webcorannc.nsf/Annou...endocument
Rationally speaking, we have to assume that the Lee Family continues to see great value in the LKT shares, and has the intention to privatize the company eventually.

Apart from its interest in JP (comprising JP1 and JP2), there is little doubt that LKT's 74.51% interest in the huge freehold development land plot - area: 421,318 sq. m.; net buildable area: 631,977 sq. m.) - located in SIPCOT Information Technology Park, Siruseri, Tamilnadu, India, is worth potentially many, many times over its original acquisition cost plus development costs incurred todate. This grossly undervalued item is recorded under "Properties under development" in LKT's latest B/S (as at 30Sep10) at a BV of only $11.41m (see Note 3).....
http://info.sgx.com/webcoranncatth.nsf/V...penelement
While this property development item has been stalled for some years now, it is reasonable to believe that when developed or sold, it will bring in a huge gain to LKT. More info on SIPCOT Information Technology Park....
http://en.wikipedia.org/wiki/SIPCOT_IT_Park
http://www.sipcot.com/Industrial_complex_Siruseri.htm

There is also little doubt that JP is a very well managed and highly valuable shopping mall asset and, if and when sold, it will fetch a higher value than the current BV of $469.965m (as at 30Sep10) for LKT's portion and the similar portion owned by Guthrie GTS. JP is a maturing and valuable commercial property asset that is attractive to the Reits and even foreign property funds going for steady financial return from its solid rental. It is reasonable to believe that at the right price and timing, both LKT and Guthrie could turn to become sellers. If and when it happens, it will be a bonanza and a time for profit distribution for their shareholders.

(30-12-2010, 11:04 AM)dydx Wrote: You can't say that for sure, just by looking at the bigger gap between Guthrie GTS's NAV/share of $0.66 (as at 30Sep10) and current share price of $0.455 (last done), vs. LKT's NAV/share of $0.6267 (as at 30Sep10) and current share price of $0.54 (last done).

Of course. I was just commenting on your previous suggestion of re-rating based on NAV and JP.

- If the discount to NAV is larger, then rationally it should close up.
- If an investor wants exposure to JP, both offer such opportunity although the effect on Guthrie will be lower due to its larger equity base.

Appreciate your additional points on LKT.

Based on the following BT report dated today (31Dec10), SPH or NTUC Income/NTUC FairPrice, on their own or together, could well be potential buyers of JP, if LKT/Guthrie turn to become sellers - of course, at the right price!

"Published December 31, 2010
SPH on the lookout for more property ventures
Media group particularly keen on retail sector

By EMILYN YAP

(SINGAPORE) Singapore Press Holdings (SPH) is on the search for more property investments as one of its projects, Clementi Mall, opens its doors next month.

Opening next month: Clementi Mall, in which SPH has a 60% stake, will offer 190,000 sq ft of retail space, of which 85% has been taken up. It will have direct links to Clementi MRT station and the bus interchange.

The group will continue to focus on the media business but it is also keen on real estate, particularly the retail sector.

Clementi Mall - in which SPH has a 60 per cent stake - will obtain its first Temporary Occupancy Permit (TOP) in early January 2011, and the second TOP in mid-March.

The six-storey development, which also has a basement shopping level, will offer around 190,000 square feet of retail space. To date, 85 per cent of the space has been taken up.

'We expect full tenancy commitment when the mall officially opens in April 2011,' said owner CM Domain's general manager Linda Kwan. 'We are getting many positive responses and interests from retailers for shop space.'

Clementi Mall will have direct links to Clementi MRT station and the bus interchange. Its anchor tenants include department store BHG, which will take up over 11,000 sq ft of space on the third level. FairPrice Finest, McDonald's, Foodfare, Challenger and a public library are some of the other tenants.

NTUC FairPrice Co-op and NTUC Income Insurance Co-op are the other investors in Clementi Mall, holding a 20 per cent stake each.

SPH is interested in more real estate investments. For the full year ended Aug 31, operating revenue from its property division came up to $356.1 million - some 25 per cent of the $1.4 billion group topline.

'SPH is familiar with retailing, having owned the upmarket Paragon mall along Singapore's Orchard Road shopping belt since 1997,' said chief financial officer Tony Mallek.

Nevertheless, 'we had earlier said that we will explore projects whenever the right opportunities arise.'

Retail assets are typically favoured for the recurring income streams they generate over their lifetimes. By contrast, residential development projects contribute to earnings over a span of just a few years.

Before Clementi Mall, SPH was developing Sky@eleven, a condominium site off Thomson Road which obtained TOP in May this year. The group has recognised final contributions from the project.

Mr Mallek did not reveal how much SPH plans to set aside for property ventures. 'It depends on the opportunities available and their potential,' he said.

The group has a considerable war chest - its cash and cash equivalents amounted to $461 million as at Aug 31.

SPH gained two cents on the stock market yesterday to close at $4.01, the highest in more than two weeks. According to Bloomberg, UOB Kay Hian issued a 'hold' call on the counter this month, while Credit Suisse rated it 'neutral'."

i was wondering with the new clementi mall on the west bound mrt line, will it take away some of the crowd/business from jurong point?

ntuc fairprice seems to be very profitable judging from their recent business venture into vietnam, possibly they have accumulated large cash from the supermarkets business?

jurong point (LKT) is the shopping+hangout stronghold for residents in jurong west regions.

(SPH) Clementi mall will take away the crowd from IMM (CMA?) at best...

NUS and SP students can hang out in the new Clementi Mall haha

(31-12-2010, 09:54 PM)brattzz Wrote: jurong point (LKT) is the shopping+hangout stronghold for residents in jurong west regions.

(SPH) Clementi mall will take away the crowd from IMM (CMA?) at best...

I tend to agree with this. Indeed JP enjoys a very large (especially in physical area) 'catchment' in the entire Western end of Singapore, which is still mainly served by local feeder bus routes/services converging into the large and always busy regional bus terminal integrated into JP.

We also have to bear in mind that apart from its large size, JP as a mall is very well designed with a good store layout. The mall is also very well run, as its management team can draw ideas and the vast experiences of LKT and Guthrie GTS, both of which have been hands-on in the development and management of JP since the very beginning.

LKT and Guthrie CTS both have good "Hidden Value" in JP but if the major share holders do not attempt to unlock it, we will be trapped in to a "Value Trap" for very long time, but i think there are higher chances for the LKT "hidden value" will be unlocked before Guthrie CTS.