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Hi GFC,
I agree 0.7c div this is a good surprise but I don't think this is allowed by the sale of KTIS shares. They only sold 126 750 SGD of KTIS so that's really marginal. I am actually quite happy that they keep most of their KTIS shares. At the moment KTIS dividends paid to KWC allow an additional 0.5c div. KTIS did quite well the last 2 quarters so hopefully they will be able to raise substantially their dividends.
My expectation is 2.5c div for 2015 but this is assuming a very small sale of KTIS shares. If they sell 10% every year then 3c div/year can be easily paid but again I would be happy to see their holding in KTIS kept so as a more sustainable driver for future growth in FCF. Especially that KWC associates (mostly from the construction sector) are not really doing well and giving much to KWC at the moment.
But who knows going forward these associates can finally show some good return to KWC
<vested>
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(11-11-2014, 02:22 PM)ethys Wrote: Hi GFC,
I agree 0.7c div this is a good surprise but I don't think this is allowed by the sale of KTIS shares. They only sold 126 750 SGD of KTIS so that's really marginal. I am actually quite happy that they keep most of their KTIS shares. At the moment KTIS dividends paid to KWC allow an additional 0.5c div. KTIS did quite well the last 2 quarters so hopefully they will be able to raise substantially their dividends.
My expectation is 2.5c div for 2015 but this is assuming a very small sale of KTIS shares. If they sell 10% every year then 3c div/year can be easily paid but again I would be happy to see their holding in KTIS kept so as a more sustainable driver for future growth in FCF. Especially that KWC associates (mostly from the construction sector) are not really doing well and giving much to KWC at the moment.
But who knows going forward these associates can finally show some good return to KWC
<vested>
"They only sold 126 750 SGD of KTIS so that's really marginal."
Really? I havent looked through in detail, but thanks for pointing that out.
I too am expecting a 2.5 cent for full yr dividend, although many analysts are exepecting 3.0 cents, assuming that the KTIS stake will be periodically sold down to fund this. Seeing KW's long record of being conservative, I doubt it will be 3.0 cents.
KWC associates are not contributing as much to the revenue currently as several projects are in their initial phases. From what i understand, the bulk of the margins are recognised from the mid to the tail end of the projects.
Even the Skywoods project is doing reasonably ok in the past month.
Back to the KTIS topic, I would only be ok with them holding on to their KTIS stake if the valuations are not crazy.
Someone did an earlier calculation and said that the PER was way high, above 20. If so, I'd rather they sell out, even if they potentially miss out on higher valuations in future. The div yield on their KTIS stake is around 3.something %, which is not terrible, but not fantastic either
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Skywoods project sales up to October 2014 :
Unit launched : 420
Unit sold : 168 (40%)
Unit unsold : 252 (60%)
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(17-11-2014, 04:16 PM)desmondxyz Wrote: Skywoods project sales up to October 2014 :
Unit launched : 420
Unit sold : 168 (40%)
Unit unsold : 252 (60%)
Oh they actually managed to sell quite a few units quietly in the past few mths
A quick check with the transaction caveats lodged shows that the ave psf has actually been reduced
The project is still profitable, but the margins are razor thin
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Anyone know what's KWC shares in this Skywood JV?
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23-11-2014, 06:53 PM
(This post was last modified: 23-11-2014, 06:57 PM by desmondxyz.)
(23-11-2014, 06:51 PM)GPD Wrote: Anyone know what's KWC shares in this Skywood JV?
In Singapore, the Group’s 40 per cent owned Meadows Bright Development Pte Ltd (Meadows Bright) heads its property developments. In 2012, Meadows Bright, through its 50 percent owned associate, Bukit Timah Green Pte ltd, successfully tendered for and was awarded a site for residential development along Dairy Farm Road. The site will be used to develop a condominium project– “Skywoods”, consisting of approximately 420 units. The project is planned for launch in August 2013 and is expected to be completed by 2016.
In this case, 20%....
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23-11-2014, 07:18 PM
(This post was last modified: 23-11-2014, 07:19 PM by GPD.)
(23-11-2014, 06:53 PM)desmondxyz Wrote: (23-11-2014, 06:51 PM)GPD Wrote: Anyone know what's KWC shares in this Skywood JV?
About 1/3 if not wrong.
Don't think so. This is a 50/50 JV between Meadows Bright Development Pte Ltd (MBD) together with First Shine Properties Pte Ltd (FSP).
I think FSP is Hock Lian Seng's. MBD was 35% KWC, 45%TA and 20% Far East Distiller. Last year KWC and TA increased their stake in MBD. KWC now hold 40% interest in MDB. Problem is I don't know if the JV is still 50/50 after KWC and TA increased their stake in MDB. I cannot find any annoucement from HLS on the same issue. Anyway I am assuming the 50/50 stays and therefore assuming KWC is entitled to 20% of the sale revenue.
My guesstimate of the total sale revenue for Skywood to be about $475mil and KWC can recongise about $95mil.
Has any buddy done similar calculation?
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(23-11-2014, 07:18 PM)GPD Wrote: (23-11-2014, 06:53 PM)desmondxyz Wrote: (23-11-2014, 06:51 PM)GPD Wrote: Anyone know what's KWC shares in this Skywood JV?
About 1/3 if not wrong.
Don't think so. This is a 50/50 JV between Meadows Bright Development Pte Ltd (MBD) together with First Shine Properties Pte Ltd (FSP).
I think FSP is Hock Lian Seng's. MBD was 35% KWC, 45%TA and 20% Far East Distiller. Last year KWC and TA increased their stake in MBD. KWC now hold 40% interest in MDB. Problem is I don't know if the JV is still 50/50 after KWC and TA increased their stake in MDB. I cannot find any annoucement from HLS on the same issue. Anyway I am assuming the 50/50 stays and therefore assuming KWC is entitled to 20% of the sale revenue.
My guesstimate of the total sale revenue for Skywood to be about $475mil and KWC can recongise about $95mil.
Has any buddy done similar calculation?
Your description of KWs stake is correct
So KW has a 40% stake of the 50% stake in the JV
I am not sure how do you guess the total sales revenue though
The selling psf has changed and it's hard to predict how the remaining units will do n how long they will be on the market.
Even within the Dev, the selling psf is different for different units so the best guess is just to use the average psf x total saleable area
And there will likely be discounts etc so it's really tough to estimate the net sales rev.
All I know is that break even price is ard $1.1k or so (got the exact figures in my analysis but can't recall now), so the Dev is prob barely breaking even.
If they can sell the remaining units at this current price, then there's profits
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Skywoods project sales up to November 2014 :
Unit launched : 420
Unit sold : 177 (42.14%)
Unit unsold : 243 (57.86%)
8 units sold in Nov, very slow sales.....hard time ahead....
(Divested Kingwan, waiting for chance to buy back....)
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I've divested King Wan as well, due to the weak core earnings. All the recent ventures (bulk carrier, Skywoods, dorm, etc) do not seem to be doing well. Worryingly, the M&E biz, which for me is the most important piece of business, has suffered from labour costs increases. With the construction pie shrinking and increased competition, King Wan's CF may dry up, and their ability to pay dividend becoming dependent on selling of KTIS shares, whichever way it goes in the market. Equally concerning is the huge spike in director's compensation (the last quarter net profit was only SGD 750,645, but the directors paid themselves SGD 612,089. The quarter before it was an even more astounding SGD 2,961,880 bonus vs a core profit of only SGD 2,520,553.
Used to like the company for its strong core business, management's shrewd investments, and conservatism. Will be interested again when these qualities return.
All the best 
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