You fail then to consider the impact of a stable 7 to 8 cents of EPS in the years beyond the first year. Which IMO is more important to the company's valuation. Pay 21 cents now and company earns it back in 3 to 4 years. Not good enough in your opinion?
(28-07-2014, 11:44 PM)Curiousparty Wrote: Revenue = 7690sqm x 10.76 x efficiency ratio (say 80%) x 762 PSF (based on 2013 freehold rate) = $50 mil.
(basis: Factory units with 60-year lease and freehold tenure were transacted at an average of $441 psf and $762 psf, respectively, reflecting increases of 5 per cent and 8.5 per cent from 2012. )
Total cost of land ($zero) + construction = $1650 (PSM) x 7690sqm x 1.2 (20% buffer for rising labor cost, cost overrun)= $15 mil
[Hupsteel is not in the business of construction. there might be cost overrun, etc]
NAV created from KC project = $35 mil / 616 mil = 5.7 cents.
The NAV (or revaluation gain) created from KC project is only a meager 5.7 cents, after waiting for a miserable 2-3 years
How many " 5.7 cents NAV gain" can we create from all the freehold properties that Hupsteel has and how long do we have to wait for all to be redeveloped?
we are looking at the RATE of NAV creation, relative to the existing NAV
*****************
The Board of Directors of Hupsteel Limited (the "Company" and together with its subsidiaries, the
“Group”) is pleased to announce that the Group has entered into an agreement (“the Building
Agreement”) to redevelop its freehold property at 6 Kim Chuan Drive (the “Property”) into a 7-storey
industrial building with an elevated car park having a gross floor area of 7,690 square metres.
It’s good to have money and the things that money can buy, but it’s good, too, to check up once in a while and make sure that you haven’t lost the things that money can’t buy. –George Lorimer
29-07-2014, 08:15 AM (This post was last modified: 29-07-2014, 09:13 AM by Curiousparty.)
sorry, don't quite get it. Not sure how u get EPS of 7 to 8 cents.
Thought the initial gain is one-off revaluation gain of 5.7 cents.
Thereafter, if the company manages to lease out the premises, then the going rental rate is about $2.5 PSF per mth.
{basis: http://www.commercialguru.com.sg/project...ntre-19342} Recurring income per annum = $2.48mil or 0.4 cents EPS
(this is provided the whole floor space is leased out).
don't see how the company can have an recurring EPS of 7 to 8 cents per annum.
Did I calculate wrongly? If so, pls kindly point out. Many tks in advance. (? ~ ?)
(29-07-2014, 12:16 AM)psolhawk Wrote: You fail then to consider the impact of a stable 7 to 8 cents of EPS in the years beyond the first year. Which IMO is more important to the company's valuation. Pay 21 cents now and company earns it back in 3 to 4 years. Not good enough in your opinion?
(28-07-2014, 11:44 PM)Curiousparty Wrote: Revenue = 7690sqm x 10.76 x efficiency ratio (say 80%) x 762 PSF (based on 2013 freehold rate) = $50 mil.
(basis: Factory units with 60-year lease and freehold tenure were transacted at an average of $441 psf and $762 psf, respectively, reflecting increases of 5 per cent and 8.5 per cent from 2012. )
Total cost of land ($zero) + construction = $1650 (PSM) x 7690sqm x 1.2 (20% buffer for rising labor cost, cost overrun)= $15 mil
[Hupsteel is not in the business of construction. there might be cost overrun, etc]
NAV created from KC project = $35 mil / 616 mil = 5.7 cents.
The NAV (or revaluation gain) created from KC project is only a meager 5.7 cents, after waiting for a miserable 2-3 years
How many " 5.7 cents NAV gain" can we create from all the freehold properties that Hupsteel has and how long do we have to wait for all to be redeveloped?
we are looking at the RATE of NAV creation, relative to the existing NAV
*****************
The Board of Directors of Hupsteel Limited (the "Company" and together with its subsidiaries, the
“Group”) is pleased to announce that the Group has entered into an agreement (“the Building
Agreement”) to redevelop its freehold property at 6 Kim Chuan Drive (the “Property”) into a 7-storey
industrial building with an elevated car park having a gross floor area of 7,690 square metres.
[I am not here to promote any stocks. Please always do your own research before embarking on any investment decision. I will not be liable for any of your own decisions. Your use of any information or materials is entirely at your own risk. It is your responsibility to ensure that any products, services or information meet your specific requirements. I do not produce material which meets the objectives of any specific financial and risk profile of investors.]
Calculation error, my apologies. You are possibly right with regards to your estimates for EPS. We will see what Hupsteel does with its building when completed.
It’s good to have money and the things that money can buy, but it’s good, too, to check up once in a while and make sure that you haven’t lost the things that money can’t buy. –George Lorimer
29-07-2014, 01:51 PM (This post was last modified: 29-07-2014, 01:53 PM by Curiousparty.)
Even if all the freehold properties are redeveloped, probably we are looking at a max RNAV of ~$0.50.
Applying 35% discount (common practice to all property counters) to RNAV, we are looking at only $0.33. ("realizable NAV")
And this is assuming ALL Freehold properties are redeveloped .
The rate of NAV adjustment to reach $0.33 may extend to one decade or more , assuming Hupsteel takes 2 to 3 years to redevelop one property.
[I am not here to promote any stocks. Please always do your own research before embarking on any investment decision. I will not be liable for any of your own decisions. Your use of any information or materials is entirely at your own risk. It is your responsibility to ensure that any products, services or information meet your specific requirements. I do not produce material which meets the objectives of any specific financial and risk profile of investors.]
Volume is abnormally high at 2 million shares, against average of 100K share a day
From FY report
"Under the Share buyback mandate approved by shareholders, the Company purchased a total of
2,397,000 shares for S$533K by way of on market purchase on the Singapore Exchange Securities
Trading Limited during the quarter. "
Disclaimer :-
I am not an investment professional.
I encourage you to do your own independent "due diligence" on any idea that I write about, because I could be and probably am wrong.
Nothing written here is an invitation to buy or sell any particular stock.
At most, I am handing out an educated guess as to what the markets may do.
The market will always find a new way to make a fool out of me (and maybe, even you!).
Even the best strategies of the past fail, sometimes spectacularly, when you least expect it.
I am not immune to that, so please understand that any past success of mine will probably be followed by failures
or could just be valuebuddies loading up 500K of HS!
1) Try NOT to LOSE money!
2) Do NOT SELL in BEAR, BUY-BUY-BUY! invest in managements/companies that does the same!
3) CASH in hand is KING in BEAR!
4) In BULL, SELL-SELL-SELL!
Looking at the historical records, 20 day average volume is 206K shares.
There are precedents though of such high volume. 31/10/2013, 22/04/2013.
The absolute peak though was Jan 28-31, 2013, with 16 million shares traded.
This caused a 26% jump in one day, from 19 cents to 24 cents.
However, word of caution is that share price subsided to previous levels over the next 1 year or so. And in fact has not hit the 25 cents mark since then.
Attached is the volume history
Disclaimer :-
I am not an investment professional.
I encourage you to do your own independent "due diligence" on any idea that I write about, because I could be and probably am wrong.
Nothing written here is an invitation to buy or sell any particular stock.
At most, I am handing out an educated guess as to what the markets may do.
The market will always find a new way to make a fool out of me (and maybe, even you!).
Even the best strategies of the past fail, sometimes spectacularly, when you least expect it.
I am not immune to that, so please understand that any past success of mine will probably be followed by failures
The sum did not really work out for Hupsteel. Not sure the value proposition...
[I am not here to promote any stocks. Please always do your own research before embarking on any investment decision. I will not be liable for any of your own decisions. Your use of any information or materials is entirely at your own risk. It is your responsibility to ensure that any products, services or information meet your specific requirements. I do not produce material which meets the objectives of any specific financial and risk profile of investors.]
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