Popular Holdings

[axt]

Their Net Assets per share is 0.229 and if you buy at today price of 0.166, you have a safety margin of approx 30%. To be more conservative, if you based on their Current Assets per share (Current Asset / Total Liability) of 0.171, you still have s small safety margin of approx 3%.

Is Mr. Market giving a big discount?

[dydx]

Popular's FY11 (ended 30Apr11) AR makes interesting reading.....
http://info.sgx.com/listprosp.nsf/6c6be9...600300f90/$FILE/Annual%20Report%202011.pdf

After reading the Chairman's Statement (p6/7) and Operating & Financial Review (p26 to p33), going forward into FY12 (ending 30Apr12), I have a strong feeling that Popular's Retail & Distribution division especially its Malaysia operations will continue to grow steadily and hopefully also deliver higher profits. The Publishing & e-Learning division should also continue to grow steadily and deliver at least stable profits. The Property Development division should add a few million $ of profits from the sale of the remaining units in the completed "18 Shelford" condo project.

Payment date for the $0.006/share FY11 Final dividend has been fixed for 21Sep11, with the 'XD' date fixed for 2Sep11.

[karlmarx]

there are 5 out of 19 unsold units for 18 shelford. i believe they have only just started selling their last project at 8 raja, none are sold as of yet. about $80mio of development property sits on their balance sheet. their exposure to the property market gives me the jitters.

[touzi]

$80 mil of freehold development property doesn't look that bad since they have $90 mil of cash.

Anyway, I hope someone can help to explain ( in layman language ) what the following actually means:

Write-back of allowance for foreseeable losses for development properties amounting to $21,684,000 in relation to 18 Shelford and 8 Raja was made (2009: impairment loss of $28,159,000 in relation to 18 Shelford and 8 Raja).

The carrying amount of the development properties is the lower of the cost or net realisable value. The recoverable amount was based on valuation performed by accredited independent valuers, with recent experience in the location and category of the properties being valued.

Development properties with net book values of $82,507,000 (2009: $76,561,000) have been pledged to banks as security for creditfacilities granted (Note 26).

[kazukirai]

I'm not accounting trained, not formally at least, but I'll try. Those who know better, please feel free to correct or supplement.

Write-back of allowance for foreseeable losses for development properties amounting to $21,684,000 in relation to 18 Shelford and 8 Raja was made (2009: impairment loss of $28,159,000 in relation to 18 Shelford and 8 Raja).

The carrying amount of the development properties is the lower of the cost or net realisable value. The recoverable amount was based on valuation performed by accredited independent valuers, with recent experience in the location and category of the properties being valued.

I believe this is due to test for impairment as stated in the 2nd para. The accounting treatment requires that they test for lower of cost or net realisable value.

Therefore, if Net Realisable Value falls below cost, they have to carry the assets at that lower value on the Balance Sheer and take the hit (Difference between cost and NRV) on their Income Statement (which lowers Profits).

However, IFRS allows for writebacks, hence the writeback of the 21.648mil in 2010 of 28.159mil that they had written down in 2009 (BTW, they've written back the rest of that difference in FY2011).

As to why they did this in the first place, I can only guess that in FY2009, Popular, on the advice of their accountants or valuers, were told to expect that they can only expect to sell those properties for that amount and hence they had to write down that amount.

Development properties with net book values of $82,507,000 (2009: $76,561,000) have been pledged to banks as security for creditfacilities granted (Note 26).

I believe that this is how most developers work. They have to use cash in developing properties. Very few (or no) developers will fully fund their projects with cash. Taking loans will require collateral and what better collateral could there be than the property whose values are projected to go up and up (otherwise, why bother to build the property to sell in the first place)?

[touzi]

Many Arigato, Kazukirai-san.

However, IFRS allows for writebacks, hence the writeback of the 21.648mil in 2010 of 28.159mil that they had written down in 2009 (BTW, they've written back the rest of that difference in FY2011).

One more clarification, what do mean they have written back the rest ( about $6.5 mil ) in FY2011 ? We are still in FY2011.

[kazukirai]

One more clarification, what do mean they have written back the rest ( about $6.5 mil ) in FY2011 ? We are still in FY2011.

Eh...I'm reading their latest annual report ('Annual Report 2011'). I believe their FY2011 ends 30 Apr 2011 hence the confusion.

Anyway, let me point to Note 32 ('Other operating income') of the said report. Under the line statement 'Write-back on impairment for development properties', you'll see that the 2011 and 2010 figures respectively are $6.475m and $21.684m. Add that up and it gives you the total that was written down in 2009.

[violinist]

One thing I have never understood is how and why the h*** would people trade 1 lot of Popular?

11:48:59 0.162 1,000 Buy Up
11:41:21 0.162 1,000 Buy Up
11:33:31 0.162 1,000 Buy Up
11:31:04 0.160 1,000 Sell Down
11:31:03 0.160 80,000 Sell Down
11:24:46 0.162 1,000 Buy Up
11:17:39 0.162 1,000 Buy Up
11:09:19 0.162 1,000 Buy Up
11:00:53 0.162 1,000 Buy Up
10:53:16 0.162 1,000 Buy Up
10:44:58 0.162 1,000 Buy Up
10:36:50 0.162 1,000 Buy Up
10:28:34 0.162 1,000 Buy Up
10:20:07 0.160 1,000 Buy Up
10:12:22 0.159 1,000 Buy Up
09:49:19 0.163 98,000 Buy Up
09:49:19 0.163 73,000 Buy Up
09:49:10 0.163 3,000 Buy Up
09:49:10 0.163 2,000 Buy Up
09:48:11 0.163 4,000 Buy Up

[lonewolf]

Yes. Its one of the greatest unsolved mystery of stock trading.

When you queue to sell say 20 lots, and you got matched for 1 lot for a stock that is less than 30c at the pre-closing routine, you just want to strangle those idiots who put in those 1 lot trade; and eat into yr transaction cost.

Maybe its a conspiracy theory for the brokerages to sux some transaction cost out of the traders. Or it was just someone trying to 'pop up' or 'sell down' the share.

[dydx]

Someone is trying to create activity, or a sign or a precursor pointing towards a possible surge in market activity to come.

There are quite a few catalysts supporting increasing investor interests for Popular in the short-term, including -
1. Popular's FY11 AR was released recently.....
http://ir.listedcompany.com/tracker.pl?t...ar2011.pdf
2. AGM is on 19Aug11 (tomorrow).
3. 'XD' for the $0.006/share Final dividend has been fixed for 2Sep11.