Hotel Royal

3Q result just out.....
http://info.sgx.com/webcoranncatth.nsf/V...D001485A4/$file/HRL_Announcement3QRESULTS2012.pdf?openelement

Profits and positive FCF from the enlarged and geographically diversified operations are improving. B/S remains rock-solid, with the BV of hotel and investment property assets very conservatively recorded.

Just reviewed the FY12 (ended 31Dec12) full-year results (first released on 27Feb13)......
http://info.sgx.com/webcoranncatth.nsf/V...D000B7881/$file/HRL_4Q_2012.pdf?openelement

With the latest (as at 31Dec12) NAV/share at $4.56, and the huge potential gain from the Newton hotel site if it is ever redeveloped, Hotel Royal at the last done share price of $2.92 remains grossly under-priced.

I look forward to the coming $0.05/share Final dividend which should be paid around 15May13.

(04-04-2013, 03:52 PM)dydx Wrote: With the latest (as at 31Dec12) NAV/share at $4.56, and the huge potential gain from the Newton hotel site if it is ever redeveloped, Hotel Royal at the last done share price of $2.92 remains grossly under-priced.

I am also puzzled as to why it is being undervalued to such an extent. Can anyone shed light on why this might be so?

Nonetheless, I am happy to be a part-owner of a decent business at a decent price. While it is better to buy a great business at a fair price than a fair business at a great price, it is hard to find examples of the former in these days.

Yes, I also like their transparency and detailed explanation in their full-year 2012 report.

[vested]

Today Hotel Royal closed at $3.16, up an impressive $0.18. Great!

I chanced upon this old news report (dated 24Oct12) on the sale of the 240-room and now renamed Hotel Grand Pacific along Victoria Street for around $210.0m.....
http://www.asiaone.com/A1Business/Genera...78934.html

As one of Hotel Royal's 5 hotels - the 223-room Hotel Royal @Queens - is situated just behind Hotel Grand Pacific, the above sale transaction points to Hotel Royal @Queens now having a fair market value of around $195.0m, which is higher than its carrying BV of $170.0m in Hotel Royal's latest 31Dec12 B/S. It is also interesting and relevant to note that Hotel Royal acquired the hotel in 2004 from Paul Sun for only approx. $55.0m!

Today (2May13), Hotel Royal closed at a 4-year high of $3.31.

INVESTOR PROPERTY INTEREST HIGH
283 words
15 May 2013
The Press (Christchurch)
THEPRE
English
© 2013 Fairfax New Zealand Limited. All Rights Reserved.
Southeast Asian property investors are showing the highest levels of interest in New Zealand commercial property in a decade, a real estate boss says.

CBRE Wellington managing director Ryan Johnson was commenting after meetings with Southeast Asian investors, New Zealand Trade and Enterprise staff, banks and major lending institutions in Singapore.

"The interest is high and across many levels of property, from $20 million in value up to $200m - mainly office assets, but also hotels and retail," Johnson said.

"This interest is coming from a range of investor groups, including high net worth individuals, property funds and institutions."

New Zealand had gained prominence across the region, particularly now that China had become New Zealand's biggest trading partner, he said.

CBRE senior capital markets director Warren Hutt noted that the interest also reflected attractive New Zealand property fundamentals.

"Singaporean investors are interested in the yield spread and clean tax structures in New Zealand."

The investment fundamentals were also right, considering the sheer weight of capital available in Southeast Asia and the 2.5 per cent to 4 per cent yields in Singapore, Hutt said.

Investors also liked the English-speaking, safer operational environment in New Zealand. The close correlation between the New Zealand and Singaporean dollars also meant hedging risks were low.

The first quarter of this year had seen the highest level of regional interest in New Zealand in a decade.

Last year, CBRE worked with an Asian investment fund operated by Credit Suisse which paid $75m for a half interest in one of Wellington's biggest government buildings, the Vogel Centre.

Johnson said Singaporean investors, for reasons of scale, were mainly interested in Auckland and Wellington property.


Fairfax New Zealand Limited

Document THEPRE0020130514e95f0003t

Another set of good and steady quarterly results for 2Q (ended 30Jun13).....
http://infopub.sgx.com/FileOpen/HRL_Anou...eID=251857
30Jun13 B/S remained rock-solid, with the value of the core hotel assets stated at ultra-conservative historical cost.

FY13 (ended 31Dec13) results just out…..
http://infopub.sgx.com/FileOpen/HRL_Anno...eID=276377
While PBT for both 4Q and full-year had fallen because of weakened Singapore hotel room rates and increased competition caused by new room supply, lower other income and higher other expenses, I think it is more important to note that Hotel Royal's BOD has finally decided to recognise/record the increased freehold land value of its hotel assets in the B/S. A total revaluation surplus of $119.3m has been added to Asset Revaluation Reserve, which has raised Total equity to a huge $507.875m - giving a new NAV/share of $6.05. It is reasonable to believe that even this figure is conservative, as it has not taken into consideration the possibility of a change in use of the prime Newton hotel site, as well as the current fair market value of the hotel assets and operations, and the group's investment properties.

Based on the last done share price of only $3.14, and using the latest NAV/share of $6.05, Mr Market has been pricing Hotel Royal at a whopping 48% discount to its accounting NAV/share.

An unchanged $0.05/share Final dividend declared.

Since releasing the FY13 full-year results on 26Feb14, Hotel Royal's share price has advanced $0.36, or +11.5%, to close at $3.50 today (21Mar14).

In the past 12 months, Hotel Royal has out-performed the STI by some 23% to date…..
http://sg.finance.yahoo.com/q/bc?s=H12.S...l&c=%5ESTI

And Hotel Royal has just announced the purchase of a resort hotel in Phuket - the 186-room 4-star "Burasari" Resort located at the famous Patong Beach - for THB1.3b (vs. recent valuation of THB1.35b) or approx. $53.0m, expected to be completed by Jun14…..
http://infopub.sgx.com/FileOpen/Announce...eID=289732 [Today's announcement]
http://www.burasari.com/about_us.htm [Burasari's website]
http://www.agoda.com/burasari-resort-phu...&tyra=1|22 [Burasari's webpage in Agoda, containing very favourable reviews]

At a price of approx. $285k per key-room for a beautiful and established resort hotel property, I thought Hotel Royal has got a good buy!

unless i am seeing things, earnings seem super low, and even if you take the earnings from previous year before they renovated the hotel, its still very low...

Also company is net debt though gearing is ok level.

Unless they sell some properties which are not making much money, I dont see any catalyst for this counter to realise its NAV. Unless someone is targeting it for a GO.

Dividend payout is pretty crap too.