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18-05-2015, 09:47 PM
u are indeed very curious...
Boustead Projects needed these new contracts to cover their fixed costs and sustained earnings.
There is no doubt a recurrent rental income. However, that amount is around $10+m.
Comparison to REIT is not appropriate as their asset base is insufficient else they would have gone for a REIT.
The space that BP is operating in now is highly competitive - indicated from previous Boustead guidance.
Personally, I think BP is a next cycle story as under current conditions, it is difficult for it to acquire and expand - otherwise they would have done so already.
Vested
Odd Lots
GG
Boustead Projects needed these new contracts to cover their fixed costs and sustained earnings.
There is no doubt a recurrent rental income. However, that amount is around $10+m.
Comparison to REIT is not appropriate as their asset base is insufficient else they would have gone for a REIT.
The space that BP is operating in now is highly competitive - indicated from previous Boustead guidance.
Personally, I think BP is a next cycle story as under current conditions, it is difficult for it to acquire and expand - otherwise they would have done so already.
Vested
Odd Lots
GG
(18-05-2015, 09:25 PM)Curiousparty Wrote: First thing first, Market cap of only ~$300mil but the book order is ~$296mil*.
*it has just announced a $34mil design and build contract tender win today.
RNAV = ~$1.26 (today's tender win of $34mil not reflected yet).
With its Design and Build and lease back model, it would have a stable recurring income base.
Based on the 1H 2015 net income figures, the full year EPS is likely to be ~9 cents. Soilbuild Business Space REIT is trading at around P/E of 15. If we apply this to Boustead Project, it should be trading at ~$1.35.
With such a "low base" market cap, a big tender win (e.g. through strategic partnership with Abu Dhabi's sovereign wealth fund) would easily lift its RNAV and hence market cap accordingly.
