BBR Holdings

[andrefre]

政府日前宣布，一些地段将须使用工厂预制体积建设（Pre-fabricated Pre-finished Volumetric Construction，简称PPVC）技术，义顺的地段将是首两个使用该技术的地段之一。

See more at: http://www.zaobao.com.sg/realtime/singap...Di20U.dpuf

The English version:
http://www.bca.gov.sg/Newsroom/pr06112014_BCA.html

[GFG]

政府日前宣布，一些地段将须使用工厂预制体积建设（Pre-fabricated Pre-finished Volumetric Construction，简称PPVC）技术，义顺的地段将是首两个使用该技术的地段之一。

See more at: http://www.zaobao.com.sg/realtime/singap...Di20U.dpuf

The English version:
http://www.bca.gov.sg/Newsroom/pr06112014_BCA.html

Thank you for this.
The government is definitely pushing I this direction, BBR's competitive advantage (or so I preassume) is that they are positioned to ride on this push by the government as they have made some early acquisition, and is gaining experience by being one of the 1st movers.
Whether all this actions ultimately translates into concrete profits is another question altogether.
I am betting that management is able to do so.

<vested>

[SLC81]

A deep value property/construction company with good potential to be privatised

[BlueKelah]

A deep value property/construction company with good potential to be privatised

On my radar, but at current prices div yield is not all that flash, which in the event of a crash could be cut to zero even

[GFG]

A deep value property/construction company with good potential to be privatised

I think it's unlikely to get delisted anytime in the near future.
The management don't hold a large enough stake and the listing status of such construction companies that deal with government tenders is actually quite important.

Another worry is their NTU project. The PPVC units are supposed to be done by Swee Hong but their Kranji site got delayed and now BBR has halted discussions with Swee Hong, but has still not announced who is going to take over the provision for these units. As such, I think the NTU project is likely to be delayed, and margins are likely to be very thin or even go into the red.
However, this project being the 1st to utilise PPVC in such a large scale, has already been slated to be a "learning project"
If BBR can learn and institutionalise processes for such projects, it will help their reputation and their subsequent margins in future projects.

At current valuations, I am still heavily vested as I think it is undervalued, and the bad news from the previous quarter has been overly priced in. The bad news being likely a 1 off event

[GFG]

A deep value property/construction company with good potential to be privatised

I think it's unlikely to get delisted anytime in the near future.
The management don't hold a large enough stake and the listing status of such construction companies that deal with government tenders is actually quite important.

Another worry is their NTU project. The PPVC units are supposed to be done by Swee Hong but their Kranji site got delayed and now BBR has halted discussions with Swee Hong, but has still not announced who is going to take over the provision for these units. As such, I think the NTU project is likely to be delayed, and margins are likely to be very thin or even go into the red.
However, this project being the 1st to utilise PPVC in such a large scale, has already been slated to be a "learning project"
If BBR can learn and institutionalise processes for such projects, it will help their reputation and their subsequent margins in future projects.

At current valuations, I am still heavily vested as I think it is undervalued, and the bad news from the previous quarter has been overly priced in. The bad news being likely a 1 off event

Ah I just realised...
BBR announced that Swee Hong will be handling the PPVC fabrication for the NTU project in June 2014. Swee Hong quickly announced that its unconfirmed and that the details of the contract are still being finalised.
BBR Holdings then acquired 75% stake in Moderna in Sept 2014. Moderna is involved in PPVC fabrication as well. (1 of the 5 authorized suppliers in Singapore)
Now, in the latest financial announcements by Swee Hong, there's been a delay in their kranji site, and BBR has sent a letter to cease negotiations.
I was wondering why acquire another PPVC supplier and not let their own subsidiary get the business. Now putting 1 and 1 together, we know. BBR acquired moderna because of problems with Swee Hong.
With this it's even better because it means BBR will have more control for their future PPVC projects

[GFG]

The Board of Directors of BBR Holdings (S) Ltd (the “Company” and together with its subsidiaries, the “Group”) is pleased to announce that it has submitted a winning bid through joint tenderers, Northern Resi Pte. Ltd. (“Resi”) and Northern Retail Pte. Ltd. (“Retail”) for the acquisition of land parcel at Yishun Avenue 4 for a proposed mixed commercial and residential development.
Both Resi and Retail are wholly-owned subsidiaries of NorthernOne Development Pte. Ltd (“NorthernOne”). The immediate holding company of NorthernOne is Northern Development Pte. Ltd., a wholly-owned subsidiary of BBR Property Pte. Ltd. which in turn is a wholly-owned subsidiary of the Company. NorthernOne will allot and issue new shares (the “Allotment”) to consortium partners to jointly develop the site. The consortium partners are Northern Development Pte. Ltd., Santarli Venture Pte. Ltd. (“Santarli”), MUSE Capital Pte. Ltd. (“MUSE”) and AHPL (Investments) Pte. Ltd. (“AHPL”) and their equity interests in NorthernOne after the Allotment shall be 50.1%, 29.9%, 18% and 2%, respectively.
The 99-years leasehold site, which was awarded by The Housing & Development Board to Resi and Retail on 26 January 2015 for $185,090,000, has an area of approximately 9,759.8 square metres and is proposed for a mixed development consisting of about 60% residential and 40% commercial (the “Development”).
Resi will develop and sell approximately 200 units of residential dwelling units and Retail, being a company incorporated for long-term property investment purposes, will develop the commercial units and be the single strata owner upon completion.
The commercial units will provide convenience and amenities such as shops, restaurants, a supermarket and food court to residents in the Development right at their doorstep. The nearby amenities include parks, country club, hospital, stadium, sports hall, schools and large-scale shopping malls. In term of connectivity, the Development is served by the Seletar Expressway, Central Expressway and Tampines Expressway; while the Khatib MRT station is a mere 10 minutes-walk.
As part of the government’s initiative to use labour-efficient construction methods and building design to improve construction productivity, Prefabricated Prefinished Volumetric Construction (“PPVC”) and Prefabricated Bathroom Units (“PBU”) are required to be adopted for at least 65% of the constructed floor area and bathroom units, respectively, for the residential units of the Development. This requirement brings synergy to the Group as one of its subsidiaries, Moderna Homes Pte. Ltd., is an approved supplier for PPVC and PBU.
The Development has no material impact on the earnings per share or net tangible asset per share of the Group for the current financial year ending 31 December 2015.
None of the directors or substantial shareholders of the Company has any interests, directly or indirectly in the Development, Santarli, MUSE or AHPL, other than through their shareholding interests in the Company.

[revelationofpyramids]

From my own tracking:

NAV now: 44 cent

Unrecognized profit from:

Bliss at Kovan: 6 cent pre tax
Lake Life (EC, 35% stake): 7 cent pre tax

Yishun Ave 4 site:

Residential (50.1% stake, assume selling at $980psf, land cost taken at $423 psf): $12.1m or 3.93 cent pre tax

Retail (50.1% stake, assume land cost $940 psf, valuation of $3,000 psf upon completion, kept as investment): $26.9m surplus or 8.75 cent surplus (no tax)

New RNAV about 60 cent, after tax and some discounting to present value.

Anyone got about same value as me?

Not familiar with who the partners are at Yishun Ave 4 project but Santarli is a construction company so maybe are buddy buddy with BBR.

BBR will have new source of recurring money from the kept retail space at Yishun site.

[GFG]

From my own tracking:

NAV now: 44 cent

Unrecognized profit from:

Bliss at Kovan: 6 cent pre tax
Lake Life (EC, 35% stake): 7 cent pre tax

Yishun Ave 4 site:

Residential (50.1% stake, assume selling at $980psf, land cost taken at $423 psf): $12.1m or 3.93 cent pre tax

Retail (50.1% stake, assume land cost $940 psf, valuation of $3,000 psf upon completion, kept as investment): $26.9m surplus or 8.75 cent surplus (no tax)

New RNAV about 60 cent, after tax and some discounting to present value.

Anyone got about same value as me?

Not familiar with who the partners are at Yishun Ave 4 project but Santarli is a construction company so maybe are buddy buddy with BBR.

BBR will have new source of recurring money from the kept retail space at Yishun site.

How do u calculate the unrecognized profit from bliss@kovan? BBR has already started recognizing profit from dec 2013, not sure how much of it is still "unrecognized". Also, what is important is when it's recognized as well. For the remaining projects, is it recognized over the next 5 yrs? 3?
It's not stated in the financial reports anywhere so a rough gauge is the TOP for the project

Yes, I agree on the new source of recurring income. That's def a gd thing
I look very favorably at the yishun project. They got it at a gd price, and they could do this because there are only 5 bidders
And there are so few bidders because PPVC is mandated for this site, meaning construction costs will be higher.
BBR has experience with PPVC and it's subsidiary moderna homes can supply the PPVC Units as well

[revelationofpyramids]

I assume BBR had recognized 60% of revenue for Bliss. Maybe wrong, but won't be wrong too much. I estimate total project pre-tax profit is $43m+ based on selling price of $1,300 psf and cost price of $1,007 psf. So 40% unrecognized is the figure i have above.

I also think BBR got a good deal at Yishun 4, considering CES bought Yishun Avenue 9 land at $794 psf compared to BBR $629 psf. Both sites offer 40% commercial and 60% resi. The lower price is maybe because BBR cannot sell the shops unit by unit but must keep for investment or sell whole.