If the management subscribes to the same valuation model and assumptions that you have described below, then it explains why the Lee family has been nibbling to buyback their shares at 37.5cts.
(01-08-2014, 02:13 PM)Shrivathsa Wrote: I guess, the next logical move would be for them to bid for another EC, since they are prudent.
I have done an updated calculation of my earlier value estimate
Let us first start with the NAV.
The current book value growth rate compounded over 2010-till date is 18%.
Let us assume this continues , but at 9% over 20 years.
In 20 years time, the book value will hit 3.54.
However, 3.54 in 2034 is not worth 3.54 today.
To arrive at a discounting rate, instead of 8.76% I have used 10.76%.
The logic being that this is a thinly traded small cap and hence you need a better margin of safety.
This shows that 3.54 in 2034 is worth 0.46 dollars / share today.
Now, the PTB has swung between 0.6 to 0.97.
Hence, pessimistically, the share is worth 28 cents and optimistically 45 cents.
Next up is the dividend income.
The payout has been estimated between 1 to 1.6 cents on a random basis.
This in today's dollars is worth 10-11 cents.
This essentially means that the value for Sing Holdings is pessimistically 38 cents and optimistically 56 cents.
Essentially, the market has priced it absolutely to perfection.
Now, would I buy into it now?
Actually, I would.
The reason is that as long as it is a fair price, one should not mind buying it.
My margin of safety is already met in the discounting I have applied.
Earnings announced, net loss of 200K SGD for 1st Half, shares down on high volume, i.e. higher than average volume.
From report "The Group expects to report a loss for the next half year as revenue from Waterwoods will be recognised only upon issuance of the Notice of Vacant Possession after TOP is obtained."
I guess this means that full year will show a loss.
The big question mark will be whether there is a dividend in April 2015, it does not seem logical for them to provide a dividend, when they are making a loss.
However, from 2006 till date, they have been issuing dividends. So, they might want to continue that.
Let us think aloud how Mr. Market might value it.
What we know for is that NAV is 54.76 cents.
Assuming that it hits lowest PTB of last five years, shares can slide to 33 cents.
Now, if we add a 10% hair-cut to account for lack of dividend, which means our holding period will have to be at least 1.5 years before seeing anything, the share can slide to 30 cents.
Yes, you might argue that the share intrinsic value is at least 38 cents, but that is over 20 years.
In the next 1.5 years, it might trade to as low as 30 cents.
This assumes that they cut dividend to zero.
Personally, I hope they do, as it will let the stock become cheaper.
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
I feel they are just being conservative in saying about possible loss. The company already starting to sell robin residences. As of to date they held a private sale and sold around $37m worth. My guess is around 10% to 15% of the total units available depending on the price psf. When they find an appropriate time to launch the project, hopefully more sales will be closed. The robin residences' website is also partially up. Under www.robinresidences.sg
14-08-2014, 10:52 PM (This post was last modified: 14-08-2014, 11:05 PM by CY09.)
By end of 2015 from AR13, both projects are expected to be 100% completed (therefore Sing Holding will have collected 100% cash from its sales proceeds) . Assuming both projects achieve 85% sales with Robin Residence sold at $2150 psf. The NAV of SIng Holdings will then be around 62 cents, with about 60% cash.
The key of course is at the end of FY 15, will Sing Holdings be generous enough to reimburse part of the cash it collects from the sales proceed. Or will it continue to hoard the cash under the pretext of business expansion.
(14-08-2014, 03:17 PM)Vseeker Wrote: SingHldgs will report more losses in 2nd Half
said before that vs HiapHoe or vs Heeton, the latter two will do better than SingHldg.
Update: Robin Residences July 2014
Cumulative Units Sold to-date: 11
Median Price ($psf) in the Month: 2,266
Units sold in the month: 11
Cumulative Units Launched but Unsold: 123
Total Number of Units: 134
Update: Waterwoods EC July 2014
Cumulative Units Sold to-date: 236
Median Price ($psf) in the Month: 807
Units sold in the month: 23
Cumulative Units Launched but Unsold: 137
Total Number of Units: 373
Robin Residences
Let's take average selling price of $2,250psf and total gross floor area of 136,000sqf. Total gross proceeds if all sold will be around $306m. If gross proceeds from Robin sold as of 14 August 2014 is $37m, then about 12% sold or around 16 (12% of 134 total units) units. If they sold 11 units in July, then they have sold about another 5 units as of 14 Aug 2014.
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