BBR Holdings

[weijian]

Why bother with "property market info" to find out how many unsold? It's a lagging indicator.

Do what I do:
pick up the phone, call one of the property agents and say
"I want to buy a unit in Lakelife. Money is not an issue, what are my options?!"

You get a real time, "spot prices" answer, pronto!

Reminds me of the hedge fund manager that does things unconventionally, something we can learn as part of our fundamental analysis (like those shortist who will stand outside the factory counting the number of people entering in/out of work)

Sometimes, Hempton's research takes a comic tone, both for long and short investments. Once, he went to a Bangkok hair salon to investigate how well Henkel AG had done its marketing for its Schwarzkopf brand of hair dye, and ended up discussing the products with women who he says were call girls getting ready for the evening. The experience helped convince him he was right to own Henkel's shares. Hempton also posed with researcher and author Jonathan Tepper as graphic designers looking to borrow 10 times their combined income to buy property in Sydney's suburbs. The ease with which they could do this signalled to him that Australia had a housing bubble and that it made sense to bet against the country's lenders.

http://www.smh.com.au/business/markets/j...q3v0f.html

[YMPL]

There is an effective management technique for management by walking around (MBWA). It provides good supplements to information from the formal channels. I reckon, an investment by walking around helps too. An unstructured survey will give you unexpected insights, on top of those from structure analysis.

Peter Lynch is also an investment guru doing the same.

[ksir]

2016 AR is out. Go to sgx website for the file. (:
If I catch the Chairman message correctly, he said BBR Msia unit has secured 2 out of 10 MRT2 projects and other works from WCE. I reckon the order won for such projects should be substantial enough to warrant an announcement? Or did I miss it?

<vested, near core>

[TTTI]

2016 AR is out. Go to sgx website for the file. (:
If I catch the Chairman message correctly, he said BBR Msia unit has secured 2 out of 10 MRT2 projects and other works from WCE. I reckon the order won for such projects should be substantial enough to warrant an announcement? Or did I miss it?

<vested, near core>

Yea, I picked that up too.

No announcements on these, so we won't know the quantum.
They could be just sub-con so the quantum would be relatively small, and let's not forget the exchange rate is still not in favor of us.

My investing thesis is still centered around they finishing up their loss making general construction projects.
I think with future projects, they'd be more careful with their margins.
Lakelife and The Wisteria should provide a tailwind for FY17.
In fact, their track record in property development is much better than in general construction. 

<vested>

[ksir]

Chiu increased his stake to 7%

Acquired remaining 20% of BBR Msia

If I interpreted correctly, they are acquiring the 20% BBR Msia at PE <5 and using BBR Holding new shares to pay for it.
The price of BBR Holding new share is S$0.31.

WAH? seems like very good deal!
Although at S$0.31, it is still lower than Book Value. 
It is arguably that the more logical move is to just buyback BBR Holding shares.
However, it seems to me that Msia is the only unit with meaningful profit and outlook seems to improve.
Maybe that's why.

<vested>

[TTTI]

Chiu increased his stake to 7%

Acquired remaining 20% of BBR Msia

If I interpreted correctly, they are acquiring the 20% BBR Msia at PE <5 and using BBR Holding new shares to pay for it.
The price of BBR Holding new share is S$0.31.

WAH? seems like very good deal!
Although at S$0.31, it is still lower than Book Value. 
It is arguably that the more logical move is to just buyback BBR Holding shares.
However, it seems to me that Msia is the only unit with meaningful profit and outlook seems to improve.
Maybe that's why.

<vested>

Yea, all share deal. At $0.31, which is a huge premium to existing share price.
I wouldn't compare it to book value, most construction companies are at a big discount to book value.
To the seller, the book value doesn't mean anything. The current share price when they were negotiating the acquisition, is what concerns the seller.
Also, at $0.31, there's no need to worry about a "lock in" period for the seller. I don't think he'd negotiate based on $0.31, and sell out quickly at $0.21.
Also, no dilution to existing shareholders technically, although the number of shares outstanding will increase.
Overall, a good deal for BBR.
We have to watch the currency risks though, MYR has chronically been weakening against SGD.

[weijian]

Chiu increased his stake to 7%

Acquired remaining 20% of BBR Msia

If I interpreted correctly, they are acquiring the 20% BBR Msia at PE <5 and using BBR Holding new shares to pay for it.
The price of BBR Holding new share is S$0.31.

WAH? seems like very good deal!
Although at S$0.31, it is still lower than Book Value. 
It is arguably that the more logical move is to just buyback BBR Holding shares.
However, it seems to me that Msia is the only unit with meaningful profit and outlook seems to improve.
Maybe that's why.

<vested>

Yea, all share deal. At $0.31, which is a huge premium to existing share price.
I wouldn't compare it to book value, most construction companies are at a big discount to book value.
To the seller, the book value doesn't mean anything. The current share price when they were negotiating the acquisition, is what concerns the seller.
Also, at $0.31, there's no need to worry about a "lock in" period for the seller. I don't think he'd negotiate based on $0.31, and sell out quickly at $0.21.
Also, no dilution to existing shareholders technically, although the number of shares outstanding will increase.
Overall, a good deal for BBR.
We have to watch the currency risks though, MYR has chronically been weakening against SGD.

Since it is a good deal for buyer, then it has to be a bad deal for seller....If i stand from seller's standpoint, why would i want to sell my 20% share of the business at P/E<5 (only based on latest year's earnings) in exchange for shares at 50% premium of its market value? I am suspecting there is some catch (no proof though) and certain portions are overvalued.

Else the only explanation is that seller is desperate to become a BBR Holdings shareholder? (exchange their ever-depreciating MYR denominated asset to SGD denominated asset?)

[ksir]

Chiu increased his stake to 7%

Acquired remaining 20% of BBR Msia

If I interpreted correctly, they are acquiring the 20% BBR Msia at PE <5 and using BBR Holding new shares to pay for it.
The price of BBR Holding new share is S$0.31.

WAH? seems like very good deal!
Although at S$0.31, it is still lower than Book Value. 
It is arguably that the more logical move is to just buyback BBR Holding shares.
However, it seems to me that Msia is the only unit with meaningful profit and outlook seems to improve.
Maybe that's why.

<vested>

Yea, all share deal. At $0.31, which is a huge premium to existing share price.
I wouldn't compare it to book value, most construction companies are at a big discount to book value.
To the seller, the book value doesn't mean anything. The current share price when they were negotiating the acquisition, is what concerns the seller.
Also, at $0.31, there's no need to worry about a "lock in" period for the seller. I don't think he'd negotiate based on $0.31, and sell out quickly at $0.21.
Also, no dilution to existing shareholders technically, although the number of shares outstanding will increase.
Overall, a good deal for BBR.
We have to watch the currency risks though, MYR has chronically been weakening against SGD.

Since it is a good deal for buyer, then it has to be a bad deal for seller....If i stand from seller's standpoint, why would i want to sell my 20% share of the business at P/E<5 (only based on latest year's earnings) in exchange for shares at 50% premium of its market value? I am suspecting there is some catch (no proof though) and certain portions are overvalued.

Else the only explanation is that seller is desperate to become a BBR Holdings shareholder? (exchange their ever-depreciating MYR denominated asset to SGD denominated asset?)

Or could it be that the seller see the higher value in BBR Holding (as compared to the price of Mr Market) and hence swapping it with BBR Msia is not totally illogical. Even if he buys in the market, he may not have the sum and enough liquidity to accumulate. Afterall the seller will be part of the buyer.

And just to satisfy my wild imagination, the emergence of more substantial shareholder is good to break the status quo. Let's say it could be Msia shareholder group (if they keep accumulating) as compared to the status quo (swiss bbr group). If the status quo is bad, (potentially positive) disruption should be welcomed.

[kelvesy]

If the seller see higher value in BBR Holding, can we know if he holds shares of BBR Holding in his own name and accumulate? It's one person's view vs the market perception of BBR shares.

[level13]

Yea, all share deal. At $0.31, which is a huge premium to existing share price.
I wouldn't compare it to book value, most construction companies are at a big discount to book value.
To the seller, the book value doesn't mean anything. The current share price when they were negotiating the acquisition, is what concerns the seller.
Also, at $0.31, there's no need to worry about a "lock in" period for the seller. I don't think he'd negotiate based on $0.31, and sell out quickly at $0.21.
Also, no dilution to existing shareholders technically, although the number of shares outstanding will increase.
Overall, a good deal for BBR.
We have to watch the currency risks though, MYR has chronically been weakening against SGD.

On the contrary, there is dilution to the existing shareholders. But it will be minimal as the new shares are
only 5.36% of the current number of shares outstanding.