Low Keng Huat (Singapore)

(27-12-2012, 11:16 PM)greengiraffe Wrote: iv) 49% stake in residential land bank Lot 112440, Johor. Based on Gen Corp IFA documents for LKH back in 2010, I cannot find any valuation for this development.

These are all the Johor properties of GCB:-
Which one?

[Image: LKH_Johor_properties.jpg]

(28-12-2012, 12:29 AM)edragon Wrote:

(27-12-2012, 11:16 PM)greengiraffe Wrote: iv) 49% stake in residential land bank Lot 112440, Johor. Based on Gen Corp IFA documents for LKH back in 2010, I cannot find any valuation for this development.

These are all the Johor properties of GCB:-
Which one?

[Image: LKH_Johor_properties.jpg]

Based on the AR 2012 page, the detailed of Lot 112440, Johor is as follows:
Land Bank: Lot 112440 Land Bank in Johor
Location:Mukin Pelentong Johor
LKH's Share (%): 49
Area (Sqf): 195,283
Use:Residential

Since 195283ft² = 1ha 8142.4m², so the answer is none of the above .

By the way, there is an spelling error in the AR 2012. It should be Plentong instead of Pelentong. Here is a short information on Plentong from wikipedia.

http://en.wikipedia.org/wiki/Plentong

With 3 local property projects - 2 residential (Minton fully sold and Parkland EC sold 87%), 1 commercial + retail (PL Sq - office sold more than 90%), the impact of the latest anti-speculation measures on LKH will be minimal.

In fact, should the measures succeed in an orderly correction, it may allow LKH to recycle its cash pile from the 3 projects into new projects from late 2014.

Otherwise, LKH can choose to return the cash to shareholders which they have always been doing.

With the aging profile of founding personnels, the family that has privatised parent company General Corp may also have the option of repeating the similar tactic to take LKH private as well.

An indiscriminate sell off may yet present opportunities to bargain hunt in LKH.

Vested

LKH has around 134000 sf of retail space to be launched at PL Square.

Relative to Chip Eng Seng's retail cum hotel development at old Safra site at Alexandra, PL Square is in a better location - sitting right next to a MRT line.

Should the rumour that retail space at Alexandra is going at S$6000 psf, I think LKH should have little problem trying their luck at S$4000 psf. At $4000psf, the retail space will gross S$536m with LKH share at S$428.8m.

The office space at PL Sq at 536,941 sf has been well received around $1750psf with sales well above 90% - perhaps closer to 95%. A full sellout of office space at $1750psf will lock in gross sales proceeds of S$940m.

Perhaps LKH is a simpler undervalued story here with virtual sellout of only 3 projects in Singapore.

With anti-speculation measures in place, LKH will be armed with a war chest to recycle the sales proceeds. Failing to recycle the funds isn't a bad thing either - the aging profile of key personnels coupled with the family's experience in privatising parent company General Corp from KLSE in 2010 may provide a simple copy cat solution to unlock value at LKH.

Vested

Thanks for the regular update greengiraffe.

What would your comment be on LKH trading close to/slightly above NAV, do you foresee an increase in NAV in the near future? As a value investor, I always try to follow the margin of safety rule as close as possible.

I haven't dug too much into its financial statements and recent news, so my understanding of the company might be a little superficial (also the financial data on Reuters seems to be down for the moment, which is rather annoying).

That said, LKH has always enticed me with its high ROE, low PEG, high dividend yield, high profit margin etc.

http://info.sgx.com/listprosp.nsf/5ec09b...8000a6598/$FILE/LKH%20Circular%20File_lowres.pdf

This is the main document that will be helpful in appreciating LKH's RNAV. I think only two projects are not included in the document - Parkland Residence (EC) and Paya Lebar Square.

My estimates of LKH's RNAV is around $1.00 to $1.20. LKH has recently appreciated above book value. I think you are referring to the book value that LKH is currently trading above.

It is well known that LKH management has been very pro-shareholders (via consistent and rising dividend payout over time). This is not withstanding the fact that the family controls close to 75% stake.

Spend sometime on the documents and let me know if my estimates of RNAV is fair.

GG

(21-01-2013, 04:57 PM)Wildreamz Wrote: Thanks for the regular update greengiraffe.

What would your comment be on LKH trading close to/slightly above NAV, do you foresee an increase in NAV in the near future? As a value investor, I always try to follow the margin of safety rule as close as possible.

I haven't dug too much into its financial statements and recent news, so my understanding of the company might be a little superficial (also the financial data on Reuters seems to be down for the moment, which is rather annoying).

That said, LKH has always enticed me with its high ROE, low PEG, high dividend yield, high profit margin etc.

Based on the following announcement, it appears that LKH is leaving its options open on the retail space in PL Sq.

However, riding on the back of Guthrie's retail management experience, they have already achieved 62% leasing commitments.

Assuming if LKH decides to sell the retail space, it will certainly be more attractive as LKH has the option of selling the retail units with a tenant - an option that will save the buyer the trouble of looking for a tenant.

However, until we hear news that PL Sq retail is available for sale, all the previous calculation will remain on paper and estimates remain hope.

Vested

From LKH 3Q announcement:

7. Development properties decreased by $139.5M to $645.6M as at 31 October 2012 from $785.1M as at 31
January 2012. The decrease was mainly due to sales proceeds received offset by development costs incurred
for 9 months current year. Development properties consist of two development projects that were launched in
Q4 previous year. The Group successfully launched Paya Lebar Square, a mixed commercial development with
20% retail and 80% office components. This development is located at Paya Lebar Road/Eunos Road 8 and is
majority owned by the Company. As of 5 December 2012, we sold more than 90% of the office units at Paya
Lebar Square. Sale of the retail portion has not been launched yet. However, the leasing of the retail units has
started and we have achieved 62% leasing commitments as of 5 December 2012. The other project launched is
a DBSS residential project, Parkland Residences located at Upper Serangoon Road. Options for 590 units have
been issued as of 5 December 2012 out of a total of 680 units.

Low Keng Huat has been rising fast these past weeks (I wonder why), making less attractive as a value play.

Lost the opportunity to invest in LKH last month (invested in Guthrie instead).

Looking at the Net assets and earning power of both companies, isn't Guthrie much more attractive?

LKH seems like a company with better growth prospect (based on past ROE, EPS growth). But looking forward the construction sector might be affected by property cooling measures.

Guthrie seems like a better valued company overall (especially now).

Any thoughts?

Need to be patience. Normally We do not know which one will appreciate first. My strategy is to buy all that are undervalued and have good dividend yield. If it does not rise, I will just collect dividend and buy more when I have the fund.

Vested in both. Property counters are hot at the moment and they will keep rising.

Hi Green Giraffe,

Thanks for your notes on my posting on CES thread. I am buying some LKH now.

Btw, where did u get figure that LKH has around 134000 sf of retail space to be launched at PL Square? Someone else posted it as 95,000 sq ft. Is your fig GFA or NLA. I think NLA is the one they can sell. Also since they leased out already maybe they wont sell so cannot monetize this asset?

Do u also know how many % of Minton revenue and profit already booked in its results?

Many thanks.