Wheelock Properties

[Boon]

Sorry for posting another.

Check cashflow statement. Gain/loss on disposal and change in value

[Image: 16ntwg.jpg]

The high acquisition activity in 2007 and the high disposal activity in 2013 correspond to the acquisition and disposal of SC Global.
Acquisition in 2007 was sold in 2013 - long holding period.
In between these periods there were little trading on HPL shares but its carrying value which is marked to market changed a lot 
Most of the major acquisitions in 2012/2013 were sold off in 2015.
There was major acquisition in 2015.
Other than the above, other activities were small trades.
Overall, by my standard, trading is not that frequent, I reckon.
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[Boon]

Yes nothing ad hominem, just a clarification on how to justify certain aspect of a valuation that might be subjective to some.

Anyway back to wheelock. From their sales of ardmore three and panaroma, we should see massive cash inflow into its coffers next year(maybe reaching a bil). Which could potentially lead to a special div or a big subtantial landbank purchase(australia perhaps?). I find their assets and associate assets to be very synergised. They can also easily maximize gfa by forming a link between wheelock place and hilton/four seasons to conquer the western orchard belt. To each his/her own.

How do you get the $1 billion figure? As of 3Q 2016 Wheelock has about $400m cash.

The Panorama was already 94% sold as of FY 2015, wouldn't those sales have already contributed to the current cash pile?
7 units of Ardmore Three were sold by end-2015 vs 50 sold as of the MRQ, so 43 units have been sold so far this year. Each unit is about 1750 square feet, so assuming an average PSF of $3300, that's close to $250m. But why would that cash only flow into Wheelock's coffers next year?

Hi bardmanship,

Panaroma should TOP next year once TOP, developers get 25% of the total sales and on completion date another 15%. Assuming 1.2mil avg per unit for a total of 698 units, 40% will be 335mil. To date, Ardmore three has sold a total of 50 units(ard 290mil). If you add them all up its very likely to hit 1bil sgd.

There is a recent article on this too: http://sbr.com.sg/commercial-property/ne...op-1b-1h17

Thanks Scg8866t, I understand why the remaining revenue for The Panorama will only be recognized in 2017 now.
Since Ardmore Three has already obtained its TOP, shouldn't revenue from units sold this year be recognized this year rather than in 2017?

If all 34 remaining units of Ardmore Three are sold next year for about $5.8 mil each (not impossible because >40 units were sold this year at around this price), that's close to 200 mil. So we'd get 400m + 335m + 200m = 935m... yeah, that's pretty close to 1 bil. Assuming they don't have much capex next year, which that SBR article asserts.

At end of FY2011:
Cash level = 1,081.625 m
Debt = 160.274m
Net Cash ~ 921 m
 
Net Cash used in acquisition of investments (Equity and Debt Securities):
In FY2012 = 337.345 - 18.223 = 319.122 m
In FY2013 = 228.368 – 166.493 = 61.875 m
Total ~ 381 m

As a result, net cash level dropped from 921 m at the end of FY2011 to about 442 m, at the end of FY2012 
 
This is one of the many options available to the controlling management in the deployment of “excess cash”. 
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[Scg8866t]

Reason why Wheelock moved up recently is because of HPL share swap between OBS and Fu siblings. The share swap of HPL to OBS(reason why HPL surged as OBS owning alot more of HPL now). But through this share swap(HPL and Kuo international), OBS will lose $500mil in net value post swap.

I wonder how this will affect Wheelock. As of now, Wheelock owns 40% of 68 Holding and effectively owns 22.58% of HPL.

http://www.straitstimes.com/business/com...ng-of-ways

[Boon]

Reason why Wheelock moved up recently is because of HPL share swap between OBS and Fu siblings. The share swap of HPL to OBS(reason why HPL surged as OBS owning alot more of HPL now). But through this share swap(HPL and Kuo international), OBS will lose $500mil in net value post swap.

I wonder how this will affect Wheelock. As of now, Wheelock owns 40% of 68 Holding and effectively owns 22.58% of HPL.

http://www.straitstimes.com/business/com...ng-of-ways

 
How has it been reported:
 
 According to the article, the share swap involves:
 
1) The two Fu siblings (Peter Fu & Juanita Fu) transferring their stake of 83.4 million shares, or 16.3 per cent, of Hotel Properties (HPL) to the Ongs.

2) The Ongs, in turn, would transfer their 40 per cent stake, totalling about two million shares, in Kuo International to them.
 
The share swap would allow the Fus to exit HPL and Mr. Ong to get out of Kuo, resulting in a parting of ways between the Fus and the Ongs.
 
The deal would be unfair to Mr Ong as the Kuo shares they would transfer are worth about $500 million more than the HPL shares they would receive.
 
What has actually happened:
 
Well, looking at disclosures of changes in share ownerships filed by HPL on 02-Dec-2016 & 23-Sep-2016, there had been share sales but no share swaps:
 
Peter Fu (who owns 59,916,697 HPL shares) and Juanita Fu (who owns 23,374,005 HPL shares) together had sold down their entire interests in HPL (totaling 83,374,005 shares) to OBS at a price of SGD 4.25 a share.
   
David Fu still owns 24,326,307 shares (~4.68%) – direct interest.
 
Christina Ong owns 23,457,308 shares (~4.51%) – direct interest.
 
OBS now directly owns 100,434,455 shares (~19.31%).

OBS + his wife + 68 Holdings combined now own 417,259,969 shares in HPL (~80.23%)
 
OBS ‘s deemed interest in HPL = 316,825,514 shares (~60.92%).

Also, we do not know how, when, and if the Kuo shares have been settled - until we do, there is no basis in believing that OBS will emerge 500 m “poorer”.
 
How will this affect Wheelock?  
 
I think both parties are bound by the investors agreement/consortium arrangement they entered into when forming 68 Holdings.

Have to look into it, I guess....................... 
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[donmihaihai]

Sorry for posting another.

Check cashflow statement. Gain/loss on disposal and change in value

[Image: 16ntwg.jpg]

The high acquisition activity in 2007 and the high disposal activity in 2013 correspond to the acquisition and disposal of SC Global.
Acquisition in 2007 was sold in 2013 - long holding period.
In between these periods there were little trading on HPL shares but its carrying value which is marked to market changed a lot 
Most of the major acquisitions in 2012/2013 were sold off in 2015.
There was major acquisition in 2015.
Other than the above, other activities were small trades.
Overall, by my standard, trading is not that frequent, I reckon.
___________________________________________________________________________

Hat off. What a way of looking at things. We can be pretty sure on the purchase and disposal of SC Global. But how do you know that those bought in 2012/2013 sold in 2015? If you don't know for sure, can't it be otherwise?

And Wheelock sold 97M, bought 97M in 9months 2016.

[Boon]

[Image: 261d7ia.jpg]

Major acquisitions made in 2012/2013 and subsequently disposed off in 2015 include:
 
1) The GBP denominated equity securities - bought in 2013 (and possibly to a lesser extent in 2014 as well) – sold off in 2015.

2) Similarly, the EUR denominated equity securities sold off in 2015 were those bought in 2013 (and possibly to a lesser extent in 2014 as well)

3) Substantial portion of HKD denominated equity securities sold off in 2015 were those bought in 2012 (and possibly to a lesser extent in 2013 as well) - carrying value decreased from 282.395 m (in 2012) to 110.280 (in 2015)
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[donmihaihai]

[Image: 261d7ia.jpg]

Major acquisitions made in 2012/2013 and subsequently disposed off in 2015 include:
 
1) The GBP denominated equity securities - bought in 2013 (and possibly to a lesser extent in 2014 as well) – sold off in 2015.

2) Similarly, the EUR denominated equity securities sold off in 2015 were those bought in 2013 (and possibly to a lesser extent in 2014 as well)

3) Substantial portion of HKD denominated equity securities sold off in 2015 were those bought in 2012 (and possibly to a lesser extent in 2013 as well) - carrying value decreased from 282.395 m (in 2012) to 110.280 (in 2015)
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Not going to say you are wrong but just disagree with you.

But let not forget, figure reflected on B/S date will not tell us what happened during the year. When I see turnover with more than 100% in 2015, I say trade. When I see another 97M each of buy and sell out of 250M securities, in 9months 2016, I say trade. When the ending balance is less than purchases during the year without the right amount of losses recorded in OCI, I say trade.

I will keep saying trade until proven otherwise.

[freedom]

I have limited accounting knowledge, so correct me if I am wrong.

"When I see turnover with more than 100% in 2015, I say trade."
I don't agree with this treatment.

1. Some SGX companies do not differentiate between mature of investments and disposal of investments in their cash flow statement. Although "figure reflected on B/S date will not tell us what happened during the year", the cash flow statement of "proceed/acquisition from investment" is not net. There was limited amount in cash flow state regarding investment in 2014. I tend to agree with Boon that it is not trade, at least not most of it. Given the long period it held its investment of 2 -3 years(acquisition in 2012 and 2013), it is more likely that the investment matured in 2015 assuming that it was debt instrument.
2. The turnover of more than 100% is not really right. At the end of FY2014, the amount held as investment was 591M, subsequently in 2Q2015, the fair value increased 36M and in 3Q 2015, there was gain on disposal of 22M. Together, 591 + 36 + 22 = 647, not too far from 653


"When the ending balance is less than purchases during the year without the right amount of losses recorded in OCI, I say trade."
I don't agree with this treatment. As Wheelock chooses fair value for its investment, for every interest it receives, the investment value could drop without any amount of losses recorded in OCI. It simply just amortizes the premium it paid when it bought the investment, e.g. it bought above the face value, and discount rate is lower than the interest rate.

[weijian]

hi freedom, welcome back to VB

[donmihaihai]

I have limited accounting knowledge, so correct me if I am wrong.


2. The turnover of more than 100% is not really right. At the end of FY2014, the amount held as investment was 591M, subsequently in 2Q2015, the fair value increased 36M and in 3Q 2015, there was gain on disposal of 22M. Together, 591 + 36 + 22 = 647, not too far from 653


"When the ending balance is less than purchases during the year without the right amount of losses recorded in OCI, I say trade."
I don't agree with this treatment. As Wheelock chooses fair value for its investment, for every interest it receives, the investment value could drop without any amount of losses recorded in OCI. It simply just amortizes the premium it paid when it bought the investment, e.g. it bought above the face value, and discount rate is lower than the interest rate.

Feel free to disagree on whether is trading or not but lets get some facts right and this is my last post on this.

FY2015 will reflect what happened in 2Q and 3Q. Can't add that up.
In FY2015, there was a gain of 22M.
Go to Other comprehensive income(OCI) - there is a negative 22M and it says, transfer to profit and loss on disposal for available for sales(AFS) financial assets.
Basically what it mean is that gain on mark to market for AFS recognized in prior year under OCI and went other reserves is recognized in P&L upon disposal(current year). What you see in other income of 22M is pull out of other reserves upon disposal.
Double check Consolidated statement of changes in equity. Yeah it is there.
What does note to accounts 3.3 financial assets - AFS says.
Available-for-sale financial assets are non-derivative financial assets that are designated as available-for-sale or are not classified in any other categories of financial assets. Available-for-sale financial assets are recognised initially at fair value plus any directly attributable transactions costs. Subsequent to initial recognition, they are measured at fair value and changes therein, other than impairment losses and foreign currency differences on available-for-sale debt instruments and foreign currency differences on available-for-sale equity instruments designated as hedged item in hedge accounting, are recognised in other comprehensive income and presented in the fair value reserve in equity. When an investment is derecognised, the gain or loss accumulated in equity is reclassified to profit or loss.



Sound strange. This is how it is being accounted.

Some math.

Purchase - 330M
loss in fair value - 46M
Yr end financial assets - 252M
Note there was forex gain in the FY and those does not belong to AFS.
330 - 46 = 286M
286 - 252 = 34M
34M is missing. It can be explain by Wheelock subsequent sold some of the purchases during the year or cooking the book.

As Wheelock chooses fair value for its investment, for every interest it receives, the investment value could drop without any amount of losses recorded in OCI. It simply just amortizes the premium it paid when it bought the investment, e.g. it bought above the face value, and discount rate is lower than the interest rate.

This is not correct for equity or debt financial assets.