United Overseas Australia

[ichew]

as at 1H09 30jun09

NTA = $0.5906
num of sh = 904,945,875

cash = 83.281m
debt = 72.016m + 3.963m = 75.979m

investment ppty = 387.41m
total equity= 520.790m => d/e = 0.1459

18dec09 declared FY09 net profit to be =~ A$110m or S$137.995m or S$0.1525 per sh
A$1 = S$1.2545

02sep10
declared interim div of AUD 0.005 or S$0.006
A$1 = S$1.29

prob will declare another AUD 0.015 at FY

======================

http://info.sgx.com/webcoranncatth.nsf/V...00022BEE4/$file/101103_Proposed_initial_public_offering_and_subsequent_listing_of_UOA_Development_Division_of_Bursa_Securities.pdf?openelement

UOA looking to list its devlpt division by Jun-11
wonder how this will re-rate the stock

======================

i was thinking "wow".
imagine a S$325m mkt cap coy earning S$137m.

all i need now is to figure out:
1) is this a one-off results? - 1H09 reported a revaluation surplus of 72.04m. so half of above net profit is "paper money".
2) msia politics - quite a mess now.
3) msia economy - read in ST today tat they have net FDI outflows since 2006. FDI 2009 = US$2.7b vs 2008 = US$8.1b. quite serious to me. who is gg to rent nor buy UOA's ppty?
4) super illiquid. hard to get out if need to.

so for now not vested.
but interesting counter.
hope to hear any views on this..

[thleong]

as at 1H09 30jun09

NTA = $0.5906
num of sh = 904,945,875

cash = 83.281m
debt = 72.016m + 3.963m = 75.979m

investment ppty = 387.41m
total equity= 520.790m => d/e = 0.1459

18dec09 declared FY09 net profit to be =~ A$110m or S$137.995m or S$0.1525 per sh
A$1 = S$1.2545

02sep10
declared interim div of AUD 0.005 or S$0.006
A$1 = S$1.29

prob will declare another AUD 0.015 at FY

======================

http://info.sgx.com/webcoranncatth.nsf/V...00022BEE4/$file/101103_Proposed_initial_public_offering_and_subsequent_listing_of_UOA_Development_Division_of_Bursa_Securities.pdf?openelement

UOA looking to list its devlpt division by Jun-11
wonder how this will re-rate the stock

======================

i was thinking "wow".
imagine a S$325m mkt cap coy earning S$137m.

all i need now is to figure out:
1) is this a one-off results? - 1H09 reported a revaluation surplus of 72.04m. so half of above net profit is "paper money".
2) msia politics - quite a mess now.
3) msia economy - read in ST today tat they have net FDI outflows since 2006. FDI 2009 = US$2.7b vs 2008 = US$8.1b. quite serious to me. who is gg to rent nor buy UOA's ppty?
4) super illiquid. hard to get out if need to.

so for now not vested.
but interesting counter.
hope to hear any views on this..

A super illiquid counter.
Although it seems to offer lots of value.
Low PE and P/NAV.
It is also a REITs manager in Malaysia.

[cyclone]

In a challenging economy. The company is doing well.

Profit Advice- Year Ended 31 December 2015
The Company advises that the expected Group Consolidated Operating profit after taxation and minority interests for year ending 31st December 2015 is expected to be approximately AUD 128 Million; this is an increase of AUD 41 Million when compared to the result (AUD 87 Million) for the year ended 31st December 2014.

[cyclone]

Ho Chi Minh City Development Project

On 18 March 2019 the Company has engrossed a letter of offer to acquire a mixed-use development site in Ho Chi Minh City, Vietnam. It is the company’s intention to proceed with acceptance of the letter of offer and proceed with the purchase subject to satisfactory due diligence being completed.

The subject site is 5,500 sq. meters and is currently zoned for commercial use, with approval for an office tower of up to 30 storey.

The land right acquisition cost on acceptance will be approximately AUD$33.5 million.

[i4value]

I bought into UOA years ago on the basis that its business was mainly in Malaysia.

At that juncture, the Malaysian property sector was booming with mainland Chinese property companies venturing into Malaysia.

You all know what happened next. The govt introduced several cooling measures. So the property sector cooled down and the sector performance followed. Then came Covid-19 and the sector suffered more.

The performance of UOA was similarly affected. 

But I think there is light at the end of the tunnel as my analysis showed that the sector performance has improved since 2020. My key metric is gross profitability (gross profits/total assets).

According to Professor Novy-Marx, this metric has the same power and PBV in prediction cross section returns of stocks. So if the trend in the chart is anything to go by, we will see a better future for the sector.



I would expect UOA performance to improve in the coming years. Unfortunately its market price has not taken the better future into account yet. Will it be a long wait<

If you want to know more about the Malaysia property sector, go to Will the Malaysian Property industry turn around by 2024?

[i4value]

This is my fundamental analysis of UOA following my comments last month

The Group comprises 3 listed entities. Although UOA Ltd is dual-listed in Australia and Singapore, the bulk of the operations and earnings are from Malaysia.

The Malaysian property market has been soft over the past few years. This has resulted in a decline in revenue and earnings for the industry. UOA performance followed similar downtrends. But while there are signs of a turnaround over the past 2 years, UOA performance has yet to follow

UOA is one of the bigger players in the Malaysian property sector in terms of shareholders' funds, revenue, and earnings. It has been able to maintain its performance relative to the industry.

While UOA performance had deteriorated over the past few years, I would still rate it as fundamentally sound. This was based on its performance relative to its peers for a number of metrics. The Group is also financially healthy.

The Chart below summarizes UOA ROE over the past 12 years compared to the Bursa large property companies. You can see that it is one of the better performers.



At the same time, the current market price does not reflect its Asset Value or its Earning Power Value. It is an investment opportunity. At AUD 0.55 per share, it is even below its end Dec 2022 Graham Net Net of AUD 0.64 per share.

If you want more detailed fundamental analysis and valuation, go to Is UOA Ltd one of the better SGX stocks?


If

[weijian]

hi i4value,

Thanks for sharing the detailed write up on UOA. Mr Market has increased the discount of ~65% to NTA (AUD 0.68 per share compared to its end 2019 NTA of AUD 1.06 per share) in 2020, to a discount of 50% to NTA (AUD 0.55 per share (19 Jun 2023) compared to its end 2022 NTA of 1.12 per share). In your opinion, what has changed that caused Mr Market to increase this discount? His inefficiency?

More importantly, what is the reason/s for the large NTA discount in the first place (50-65%)? Market discounting a future write-down of fair valuation of investment properties? Most of the cash will be recycled into new land plots and/or property development and minorities are not able to enjoy any tangible gains (besides that of accounting metrics increase)?

[i4value]

Actually I don't spend time figuring out why Mr Market behaves in a particular manner. I just look for cases where I think Mr Market is an idiot and then sit it out. The challenge here is most of the time, I have to wait for more than 5 years. Once is a blue moon, my wait is less than a year. This investing style suits me as I don't have time to analyze companies. I cover about 50 companies and doing one a week takes a year. It works as my stock turnover is less than 10% per year.

You would have thought more "international exposure" Mr Market in Singapore would behave differently from Mr Market in Malaysia. So far I have not seen any difference in the stocks I cover.

To come back to the NTA question. I think the key feature of the Malaysian property developer is that they are both land developers and buildings developer. This is unlike the US where the land development companies are different from the home builders. As such, many Malaysian property developer carry quite a lot of "land for development" in their books. So when looking at performance, I split the business into "excess land" and those "used or to be deployed" for development. The excess land doesn't have any current earnings so the return is low. All the return come from the portion used in the development. So be careful when you compare price with BV. On a overall basis you should not be surprised that it is low as Mr Market looks at earnings.