Amara Holdings

[Boon]

I thought Tiggerbee made a very good point about comparing amara holdings to many of the listed hospitality shares in hongkong. Many of the hospitality shares in hongkong are trading very cheaply no matter what valuation you use. They have better branding than amara, many of them with balance sheet net cash and they are more international than Amara. An example i can think of will be great eagle holdings (0041), much better and cheap than amara holdings

Dorsett, Eagle Brand Holdings and many other HK listed hospitality related counters may be trading at a bigger discount to Amara, as pointed out by Tiggerbee - presumably I guess these are based on their CURRENT earning capacities without taking into consideration of “growth factor”, am I not right?

The point johnnydash has been trying to make is the potential “incremental earning contribution” from Amara’s new Bangkok/Shanghai projects when fully completed and stabilized.

Hotel:
Current capacity = 388 (Amara Singapore) + 140 (Amara Sanctuary) = 528 keys
New capacity = 250 (Amara Bangkok) + 336 (Amara Shanghai) = 586 keys

Office:
Current capacity = 100 am = 42,755 sqft (NLA)
New capacity = Amara Shanghai = ????

Retail:
Current capacity = 100 am = 126,431 sqft(NLA)
New capacity = Amara Shanghai = ????

The number of key for the hotels would be slightly more than doubled. The company does not give the new GFA or NLA on its retail/office project in Shanghai – my road side source indicates the combined office + retail space in Shanghai is about the same size as 100 am (office + retail) - the mix may be different - so roughly, we are talking about doubling of “space capacity”

Would doubling of space capacity translate into doubling of earning capacity?

No doubt, the operating environment in Bangkok and Shanghai is very different compared to Singapore – but even if earning boost of 50%, if not 100%, could be achieved, it would still be significant.

The opening of Amara Bangkok (the smaller new earning contributor) doesn’t seem too far away but it would still be a year or two or who knows even three before the Shanghai project (the bigger new earning contributor) would be fully completed and stabilized.

Questions, which we are trying to work out, remain:
1) How significant would the contributions from these new projects be compared to its current base? 10%, 20%,….50%..........100%,………?
2) What is the cost of these new projects and how much of it have already been paid for to date?

In addition to being "cheaper", if any of the HK listed hospitality companies is also in a similar situation as Amara - i.e. doubling of space capacity within the next two or even three years - we should seriously look into it, I reckon.............

(not vested)