Hafary Holdings

[Drizzt]

Hafary is a long term investment, from 2014 onwards, we shd see a steady increase in profit. High Debt is becos of huge inventory and the properties bought. But the gearing should come down as profit increases

im always curious when a newbie comes in and focus on a single company in particular.

if this is a long term investment perhaps you can show some evidence of it being good as a long term investment.

is high inventory a function and nature of the business? if inventory fluctuates isnt this a sign of the kind of competitive environment thus where is the edge here?

Thanks.

[TenMan]

Hafary is a long term investment, from 2014 onwards, we shd see a steady increase in profit. High Debt is becos of huge inventory and the properties bought. But the gearing should come down as profit increases

im always curious when a newbie comes in and focus on a single company in particular.

if this is a long term investment perhaps you can show some evidence of it being good as a long term investment.

is high inventory a function and nature of the business? if inventory fluctuates isnt this a sign of the kind of competitive environment thus where is the edge here?

Thanks.

Well, I just quoting information gathered from other sources like UOB Kayhian and other website like www.nextinsight.com.

Is up to you to decide whether to invest in the share or not as you can see in my posting, I never induce anyone to buy , I only saying what I think.

http://www.nextinsight.net/index.php/sto...d-dyna-mac

I'm quite new to shares, so I bought Hafary based on the information I read and the government policies announced. High inventories means they are the largest tiles provider in Singapore which is a good sign , at least to me, but to others it may be a risky thing??

I also see what other professionals like interior designers say about Hafary before deciding it is a worthwhile investment.

http://www.vincentinteriorblog.com/selec...esigner-2/

Of course, there are other tiles supplier listed like Jason Holdings, but Jason holdings do not have the reputation that Hafary has.

All these are my personal views , since this is a forum for people to share their findings, so I just sharing mine. If u think is a risky proposition to buy Hafary, then do not buy as there are many more worthwhile counters to invest

I also taking a bet that the increasing population of 6.9 M and the planning of more new towns like Maltida, Tampines North, Marina South BTOs etc will boost the profit of Hafary. Don't forget as more and more flats are aging > 30 years old, they need renovation and tiles changed.

I hope I am right. If something happens in 2016 election and the population policies is reversed and population reduced, then my investment will be seriously affected.

[yeokiwi]

If one-off gain of 24 million was stripped from FY13, the EPS is probably around 1.4cts.
At 20cts, the PE is around 14. Even with another 20% growth(possible??) for the next two years, the PE probably will be around 10. For a company that sells tiles, the valuation is not that great.
The NTA is around 11 cts which is not great either.

There are other housing related companies in SGX. Since you are interested in companies that are benefiting from population growth, you probably can scan for them..

[TenMan]

If one-off gain of 24 million was stripped from FY13, the EPS is probably around 1.4cts.
At 20cts, the PE is around 14. Even with another 20% growth(possible??) for the next two years, the PE probably will be around 10. For a company that sells tiles, the valuation is not that great.
The NTA is around 11 cts which is not great either.

There are other housing related companies in SGX. Since you are interested in companies that are benefiting from population growth, you probably can scan for them..

Hafary has a few properties, eg: Eunos Ave 3 , Changi South etc.. that has open market value above it's book value by quite alot, meaning the NTA is closer to 20 cents and not 11 cents.

"Hafary’s newly completed HQ is strategically located near the future Paya Lebar Commercial Hub, and is a 10-minute walk from Paya Lebar MRT Station. With the impending TOP of Paya Lebar Square by 2Q14, the fair value of the new HQ is currently worth about S$50 million (or S$28.5 million or 6.6 cts/share in excess of book value)."

==> Hidden value. That's why UOB Kayhian has a TP of 33 cents for Hafary.

I would appreciate if u can suggest what are the better ones? Chip Eng Seng?

I know is always the case that non shareholders of Hafary will tend to talk down on Hafary while shareholders like me will say Hafary is a good catch. time will tell whether I made the correct decision to invest in Hafary ...

Merry Xmas.

[dtane]

Hi TenMan,

This isn't really about talking down the company, rather it is providing an alternative point of view / playing the devil's advocate.

If after every hole / opinion / facts which other forummers bring up, you still feel strongly about the company, by all means stay invested

Each forummer's choice is stock is ultimately choosen based on our own circle of competence. You might see something / know something / believe in something which others might not.

Each one also has their own criteria for selecting stocks.

If one-off gain of 24 million was stripped from FY13, the EPS is probably around 1.4cts.
At 20cts, the PE is around 14. Even with another 20% growth(possible??) for the next two years, the PE probably will be around 10. For a company that sells tiles, the valuation is not that great.
The NTA is around 11 cts which is not great either.

There are other housing related companies in SGX. Since you are interested in companies that are benefiting from population growth, you probably can scan for them..

Hafary has a few properties, eg: Eunos Ave 3 , Changi South etc.. that has open market value above it's book value by quite alot, meaning the NTA is closer to 20 cents and not 11 cents.

"Hafary’s newly completed HQ is strategically located near the future Paya Lebar Commercial Hub, and is a 10-minute walk from Paya Lebar MRT Station. With the impending TOP of Paya Lebar Square by 2Q14, the fair value of the new HQ is currently worth about S$50 million (or S$28.5 million or 6.6 cts/share in excess of book value)."

==> Hidden value. That's why UOB Kayhian has a TP of 33 cents for Hafary.

I would appreciate if u can suggest what are the better ones? Chip Eng Seng?

I know is always the case that non shareholders of Hafary will tend to talk down on Hafary while shareholders like me will say Hafary is a good catch. time will tell whether I made the correct decision to invest in Hafary ...

Merry Xmas.

[TenMan]

Hi TenMan,

This isn't really about talking down the company, rather it is providing an alternative point of view / playing the devil's advocate.

If after every hole / opinion / facts which other forummers bring up, you still feel strongly about the company, by all means stay invested

Each forummer's choice is stock is ultimately choosen based on our own circle of competence. You might see something / know something / believe in something which others might not.

Each one also has their own criteria for selecting stocks.

If one-off gain of 24 million was stripped from FY13, the EPS is probably around 1.4cts.
At 20cts, the PE is around 14. Even with another 20% growth(possible??) for the next two years, the PE probably will be around 10. For a company that sells tiles, the valuation is not that great.
The NTA is around 11 cts which is not great either.

There are other housing related companies in SGX. Since you are interested in companies that are benefiting from population growth, you probably can scan for them..

Hafary has a few properties, eg: Eunos Ave 3 , Changi South etc.. that has open market value above it's book value by quite alot, meaning the NTA is closer to 20 cents and not 11 cents.

"Hafary’s newly completed HQ is strategically located near the future Paya Lebar Commercial Hub, and is a 10-minute walk from Paya Lebar MRT Station. With the impending TOP of Paya Lebar Square by 2Q14, the fair value of the new HQ is currently worth about S$50 million (or S$28.5 million or 6.6 cts/share in excess of book value)."

==> Hidden value. That's why UOB Kayhian has a TP of 33 cents for Hafary.

I would appreciate if u can suggest what are the better ones? Chip Eng Seng?

I know is always the case that non shareholders of Hafary will tend to talk down on Hafary while shareholders like me will say Hafary is a good catch. time will tell whether I made the correct decision to invest in Hafary ...

Merry Xmas.

agreed totally.. but u see some of them just want to tell us the "bad" part, but they never talk about the good part like the properties open value is worth much more than the recorded book value which means the NTA is not just 11 cents as mention by one of them. That's why I just trying to balance the view.

Of course I very grateful for the advices but maybe not just one sided as if they trying to talk down the company.

I staying vested.

[Shrivathsa]

On 24th Dec, the share price was 0.198, Volume of share was 780,000.

As on date, i.e. 26th June 2014, the share price is 0.178, volume of shares is 320,000.

Dividend declared is 1 Cents.

You would have lost 5.1% if you had bought on 24th Dec and sold it today.

Looking at the key statistics as on date.

Price/Sales (ttm): 0.85
Price/Book (mrq): 1.98
Enterprise Value/Revenue (ttm)3: 1.60
Enterprise Value/EBITDA (ttm)6: 9.95

EV/EBITDA of around 10 is fair , but for a illiquid stock, EV/EBITDA multiples are much lower .

Sin Ghee Huat has a lower EV/EBITDA of 8.89.

Willas Array trades at 7.24

I am not trying to talk down the stock or anything, just that there does not seem to be any catalyst for this.

Plus, More than 100% dividend payout is definitely not sustainable and is bound to come down.

Assuming it comes down to 20% which is what it was in the past, then the dividend will come down to 0.4 cents a share from its current 3.5 cents a share.

Incidentally, the payout in 2011 for 2010 was 0.4 cents a share.

As a reference, at that time the share price was 0.235 cents a share, adjusted for split, it would be equivalent of .1175 cents a share.

In that sense, it could go as low as 11.8 cents a share, which is the risk one runs.

So, that in a way is the bear case.

The bull thesis would be that it can scale its pre-split adjusted high of 52.5 cents, adjusted for split, the upside would be 26 cents a share.

The reward for upside is that it increases by 8 cents a share, the risk is that it falls by 6 cents a share from here.

Risk Reward does not seem very attractive at the moment, however, if it falls to 11-12 cents a share, then chances are it would bottom out in that range and could be a good entry point.

[jim_city]

Just downloaded all the Annual Reports and have not had a chance to go in depth yet. It initially looked promising to me when I looked at the revenue and profit growth of the company until I started typing out this post.

Some concerns:

(a.) Although total amount of the profits have been growing quite well over the past few years, EPS has not followed suit due to placements/ stock splits, etc:
2010 - 2.05 cents
2011 - 4.23 cents
2012 - 2.5 cents
2013 - Approximately 1.63 cents (Less exceptional gain)
2014 - 1.04 cents (for half year)

(b.) If full year EPS ends up at 2 cents, then the dividends would be be betwen 0.4 cents to 0.6 cents (as what Shrivathsa mentioned). Notwithstanding that, this still represents a respectable 3% dividend yield.
(c.) Effect of property cooling measures on Hafary
(d.) Decrease in gross profit margins while increase in other expenses

However, that being said, I think I may not totally agree with Shrivathsa's analysis:
- It is probably not fair to take a snapshot between Dec 2013 and Jun 2014 to measure TenMen's performance. Who knows what the share price would be like in 5 years? Moreover, he probably has collected 3.5 cents of dividends between then and now - if so, his net gain would be 7% or so?
- >100% payout of dividends (of profits for non REITs) is not allowed. I do not see any indication of it being so.

At the end of the day, it might be worth taking a closer look to understand why UOB has such a strong call rating on this stock and to see if there is something which I missed out. My hands are itchy especially since I have not found anything to buy since Mar- April. If only I did not have to have so much work to do today.

[BlueKelah]

Lotsa more undervalued stuff sitting around to buy :-) just checkout recent posts on our forum. Analysts like to give target price, often just a guess.

via XperiaZ1 with tapatalk

[newborn1000]

- >100% payout of dividends (of profits for non REITs) is not allowed. I do not see any indication of it being so.

Dividend can only be paid out of profits...........so if the dividends are consistently >100%, it will deplete the accumulated profits hence it is a matter time.........