Oxley Holdings

[D123]

Food for thought: LionTeckChiang undervalued, or Oxley being too aggressively valued !!!

LTC's Arumugam lands are located right next to Macpherson MRT station (cc10),
while Oxley's UBI Road 1's site is at some 500m away from Tai Seng station (cc11).

Below details how undervalued LTC is....
but NOT suggesting that values will get unlock anytime soon.

Out of the $443m Capital Values that Oxley prescribed for its land banks (15 sites),
the lion share of $218m (amounting to $0.15 per share ) came from the land parcel at UBI Road 1

details on Oxley Land's UBI Road 1 site: MK23-06912M (ref : recent IPO Prospectus)
Zone B1, with only 60-yrs lease
landarea = 34,853 sqM or 375,150 sqF
GFA= 87,103 sqM or 937,571 sqF
landcost** = $170m or $181 psfppr
Gross Dev Values (valuation by Colliers Intl in Aug2010) = $514m or $548 psfGFA
Total dev Cost estimated = $296.24m ==> GIVING Capital Values of $218m
(** NB: actually, Oxley's original landcost for its UBI Road 1 landsite, (won thru URA tender) is only $158.1m or at only $169 psfppr)


In comparision, LTC's values its 4 Arumugam freehold ppties for only $79.8m (as at Jun-2010 results )
and these sit on 33,229 sqM of freehold lands with potential redevelopment GFA of 894,176 sqF
==> so LTC valuing its freehold lands for only $89 psfppr !!! and at $273 psf NLA base on existing buildup space of 292,000 NLA

Oxley's UBI Road site are only of 60-yrs leasehold, and is located around 500m away from Tai Seng MRT station separated by a major road intersection
in comparision, LTC's Arumugam ppties are freehold and located right next to the MacPherson MRT station

Clearly LTC's freehold land site at Arumugam, should certainly be worth much more than Oxley's 60-yrs lease land parcels at UBI Road 1,
and even if we just value LTC's freehold lands at the same price that Oxley paid in the URA tender for the 60-yrs lease land at UBI Road 1 (i.e at only $170 psfppr),
LTC's Arumugam freehold lands will still be worth $152m or $0.97 per share vs its current mktcap of only $67m (at price $0.43)

However if we assign Gross Development Values of $500 psf, then LTC's land is worth a staggering $447m or $2.85 per share !!!
==> too aggressive ?? well, if Collier Intl can value Oxley's 60-yrs lease land at $547 psf,
why shouldn't LTC's freehold site fetch $500 psf ???

Can you quote your reference for the 33,229 sqM figure you used for the size of the area the properties sit on? My estimates are much lower at about 14K sqm

[Nick]

OXLEY’S LOFT@HOLLAND FULLY SOLD WITHIN TWO HOURS OF LAUNCH

http://info.sgx.com/webcoranncatth.nsf/V...70032130D/$file/OxleyLoftAtHollandPR.pdf?openelement

(Not Vested)

[ks9799]

Oxley is moving up fast, any news?

[money]

Oxley is grossly overvalued. Selling at 5 times book value now, naive investors are thinking that it can maintain its growth rate of 20-30% for the next 10 years.

Let's assume all its projects are all fully sold NOW, CONSTRUCTION ALSO COMPLETED, SALES PROCEEDS COLLECTED IN CASH TODAY, achieving a net profit margin of 200% (construction cost, tax, marketing all accounted for), its current NAV per share will grow from 8.96 cents (as of 31 dec 2011) to around 27 cents, We can even assume that all 27 cents is cash.

Think about it, with 27 cents in cash, the company has to repurchase land, attempt to market and sell the new properties, basically repeating what other property developers are doing. but you have paid 40 cents for this company at today's price, does it make business sense?

You may want to tell me that it has a unique business model. If it is really so, wont other property developers attempt to replicate this "unique business model"?

Haha if oxley can really earn a total of 20 cents per share in the next 5 years, i swear i will just invest in ETFs for the rest of my life and not touch any individual stock.

(As much as this is a free market, overvalued companies should really not be given the chance to be listed. i pity my dad who has the impression that all companies that are allowed to list are all of investment grade.)

[propertyinvestor]

Oxley is grossly overvalued. Selling at 5 times book value now, naive investors are thinking that it can maintain its growth rate of 20-30% for the next 10 years.

Let's assume all its projects are all fully sold NOW, CONSTRUCTION ALSO COMPLETED, SALES PROCEEDS COLLECTED IN CASH TODAY, achieving a net profit margin of 200% (construction cost, tax, marketing all accounted for), its current NAV per share will grow from 8.96 cents (as of 31 dec 2011) to around 27 cents, We can even assume that all 27 cents is cash.

Think about it, with 27 cents in cash, the company has to repurchase land, attempt to market and sell the new properties, basically repeating what other property developers are doing. but you have paid 40 cents for this company at today's price, does it make business sense?

You may want to tell me that it has a unique business model. If it is really so, wont other property developers attempt to replicate this "unique business model"?

Haha if oxley can really earn a total of 20 cents per share in the next 5 years, i swear i will just invest in ETFs for the rest of my life and not touch any individual stock.

(As much as this is a free market, overvalued companies should really not be given the chance to be listed. i pity my dad who has the impression that all companies that are allowed to list are all of investment grade.)

Why dont you turn your anger towards Fragrance and Aspial? -_-"

[money]

This is interesting. Oxley buying hougang plaza for 119m while capitalmall trust carries it at a valuation of only 34m. Who's the fool? Time will tell but i am inclined to think that he who pays 4x valuation price has little to gain from the transaction.

by the way, another party involved is lian beng, probably doing a joint venture with oxley for the redevelopment of the property.

http://info.sgx.com/webcoranncatth.nsf/V...30034DFD3/$file/OxleyTender.pdf?openelement

[dzwm87]

Interesting thing about Oxley is that Ching Chiat Kwong just keeps buying and buying since its listing. Even with the poor sentiment surrounding the property sector - especially for mickey mouse units - he just keeps buying....

He is probably shifting away from mickey mouse and moving on to industrial sector.

Not too sure about that - only read it on coverage news.

[propertyinvestor]

Hougang Plaza can be redeveloped into mini strata titled shop spaces and resold for an average 3000psf. Huttons will be appointed marketing agent. They do a good job in selling Oxley's projects anyway.

[money]

Hougang Plaza can be redeveloped into mini strata titled shop spaces and resold for an average 3000psf. Huttons will be appointed marketing agent. They do a good job in selling Oxley's projects anyway.

Hmm, that could be possible, perhaps capitaland's just too silly not to have thought of it

[swakoo]

Hmm, that could be possible, perhaps capitaland's just too silly not to have thought of it

If u look at Capitaland's condo projects, they're not into mickey mouse units and IIRC they have said it's not their philosophy to build such. Maybe that's why they decided to sell at premium this space to the mickey mouse specialist..... Oxley.