HupSteel

[brattzz]

"For me, Hupsteel is a buy only if it could turn around the steel business or if it is willing to dispose the properties to realise the values."

Sure, but being a conserative family run biz, they will not sell these FH properties, rentals income will be what they look for.

Steel biz continues to be weak due to marco-reasons, so that explains the stock price now?

[Curiousparty]

The recurring income from KC (if company manages to rent out fully) is pittance of less than 0.5 cents.

Value for this counter will come when share price drops to ~15 cents.
Now, it is still far too expensive. "Waiting time" for value to arrive is simply "money lost every single day"

I am trying to convince myself that Hupsteel is a gem, but I still could not believe so unless the near-dead steel business is recovered. Some of the buddies here are simply too attached to the fact that the properties are significantly undervalued, but have someone trying to work out how much additional rental income would it get post-redevelopment?

Assuming that both Kim Chuan and Genting Lane properties are redeveloped, the GFA would be approximately 120k sqft based on the information available on its AR. Assume that NLA is 85% of GFA, then it would be 100k sqft. Assuming 100% occupancy and at better rental rate of S$3.00 psf, gross rental income per year would be S$3.6M. Net of tax and operating expenses, S$2.5M left? This is the best case scenario without taking into consideration of the lost of income from the existing properties from Kim Chuan and Genting Lane.

In fact, S$2.5M is merely 0.4c EPS.

During good years, steel business alone could generate more than 2c EPS, during the bad years like 2013, just 0.4c EPS.

For me, Hupsteel is a buy only if it could turn around the steel business or if it is willing to dispose the properties to realise the values.

[brattzz]

I just hope that more sellers at lower price, so i can pick up slow and steady lah..

Personally i like conservative family biz, the biz is in down cycle now no doubt,

[valuebuddies]

Results is out: http://infopub.sgx.com/FileOpen/Hupsteel...eID=324104

Reduced in supplies, increased in margin, still not a turnaround story.

[Curiousparty]

At current share price, it is still way overpriced.
Dishing out dividend when it does not have the ability to do so is "value-minus" to shareholders...

Results is out: http://infopub.sgx.com/FileOpen/Hupsteel...eID=324104

Reduced in supplies, increased in margin, still not a turnaround story.

[Tritium]

Could you explain why it does not have the ability to give dividends? It's interesting that you keep posting negative comments on this counter. Its balance sheet looks pretty strong to me.

[BlueKelah]

Welcome to the forum Tritium.

CP is shorting this counter lah. Usually will notice such sudden postings which occur frequently for a few days in a row until position is covered or something. If you look back this counter CP has been negative for half a year liao loh..

hupsteel at current price still has 49million net cash , which is plenty of cash to pay out their 1cent div(~6.2m/year div) for many years to come. These few years will be lean for hupsteel but thats what their cash hoard is for, to let them survive through bad times and continue rewarding shareholders.

So long as Dividend not funded by debt, would not consider it "value-minus". If dividend funded by debt, then is really value-minus.

this is currently a boring company with good balance sheet, will take long time for value to be realised.

via Galaxy Tab S with Tapatalk

[Tritium]

Ah I see. Thanks for the insight into what he is doing.

I agree that the company is boring but as long as it is generating cash that's not funded by debt, it should be fine. As in, if we compare say IBM, AAPL with this small fish, they are up to their necks in debt and will implode when the next big one hits (too bad they aint banks so bo bailout). This one, prolly just collect and collect and collect. 4% not too bad mah.

Well, that's my take anyway.

Welcome to the forum Tritium.

CP is shorting this counter lah. Usually will notice such sudden postings which occur frequently for a few days in a row until position is covered or something. If you look back this counter CP has been negative for half a year liao loh..

hupsteel at current price still has 49million net cash , which is plenty of cash to pay out their 1cent div(~6.2m/year div) for many years to come. These few years will be lean for hupsteel but thats what their cash hoard is for, to let them survive through bad times and continue rewarding shareholders.

So long as Dividend not funded by debt, would not consider it "value-minus". If dividend funded by debt, then is really value-minus.

this is currently a boring company with good balance sheet, will take long time for value to be realised.

via Galaxy Tab S with Tapatalk

[BlueKelah]

Ah I see. Thanks for the insight into what he is doing.

I agree that the company is boring but as long as it is generating cash that's not funded by debt, it should be fine. As in, if we compare say IBM, AAPL with this small fish, they are up to their necks in debt and will implode when the next big one hits (too bad they aint banks so bo bailout). This one, prolly just collect and collect and collect. 4% not too bad mah.

Well, that's my take anyway.

yup over long term this counter should be ok. But do look at the macro picture also which basically is the overproduction of steel in China. With slowdown in China and poor global outlook, steel is becoming overcapacity pretty fast and this sector could be poor for quite some time with little upside for maybe even up to next 5 years. China produces more steel than all the other top 10 steel producers combined!!!

Also note the GFC time lows were 10cents so there is a downside risk back to 10cents when things are bad.

But if you are happy with 4.7%+ yield then just treat it like a high yield FD loh

[brattzz]

since it's core biz is not in likely to turn-around any sooner, and 4.7% yield, maybe not attractive to some investors, maybe it's better to hold and wait out... slowly accumulate when below sub-20cts?

conserve limited funds, market is getting exciting again due to oil below US$60!