Wheelock Properties

[TTTI]

Hi Scg8866t,

I don't think there is a restriction that only subsidiaries based in HK can hold HK listed shares. Sorry, I think there is a confusion here. I am not referring to page 75, I am referring to page 80, Note 9 - Investments.

Lotsa good discussion in this thread.
Sorry moderator, I have minimal knowledge about Wheelock Properties, so nothing really constructive to add to this discussion in terms of FA.
Rather, having followed the thread superficially, I just wanna point out that there's really no need to get worked up over differing opinions.

I am sure many people disagree with my opinions in my blog, perhaps they are just too polite (more likely, lazy) to argue with me.
If someone does, even if it's a differing opinion, it's completely fine with me. In fact, differing opinions are good. That's how we stress test our own methodology. 
Think about it, if we all think and behave and form opinions that are completely in sync with one another, then we can all stop active investing because the markets would be 100% efficient.
In short, we should all agree that we will disagree once in a while.

[Boon]

Hi Scg8866t,

I don't think there is a restriction that only subsidiaries based in HK can hold HK listed shares. Sorry, I think there is a confusion here. I am not referring to page 75, I am referring to page 80, Note 9 - Investments.

Hi ghchua/SCG8866t,

Yes, it is Note 9 on page 80 we are referring to but details on both Equity and Debt securities are not given - in AR2013, it shows that the investments portfolio includes HPL shares (which is now accounted for under associates) and SC Global shares (which had been sold).
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[bardsmanship]

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.

[Boon]

Hi Scg8866t,

I don't think there is a restriction that only subsidiaries based in HK can hold HK listed shares. Sorry, I think there is a confusion here. I am not referring to page 75, I am referring to page 80, Note 9 - Investments.

Hi ghchua/SCG8866t,

Yes, it is Note 9 on page 80 we are referring to but details on both Equity and Debt securities are not given - in AR2013, it shows that the investments portfolio includes HPL shares (which is now accounted for under associates) and SC Global shares (which had been sold).
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From page 98 of AR2015: under currency risk:
 
Equity Securities = SGD 110.280 m (denominated in HKD)
Debt Securities = SGD 141.534 m  (denominated in USD)
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[donmihaihai]

Investment in financial assets is not static. Check the movement and currency risk from AR14 to AR15.Go back earlier if you want. Wheelock trade a lot.

And the currencies involved range from USD, GBP, HKD to Eur. Saying those in HKD are property equity listed in HK exchange is good guess at best. Because we don't know.

To look at Wheelock Properties we need to know what is it business and what it has. I am going to use total assets because its has little liabilities.
1.14 b investment properties.
0.56b investment in associate (HPL)
0.25b Financial assets
0.88b development properties
0.17b net working capital (current assets less development properties less liabilities)

The above will provide a easy view on how to look at Wheelock properties, where is the wild card and the business.

[ghchua]

Hi donmihaihai,

There is no guessing game here. As I have said before in my earlier post, the reply was given from the Board during the AGM in response to a question from a shareholder. Those investments were in HK listed property counters. As for the debt, it might be denominated in other currencies like USD but issued from HK property developers.

[donmihaihai]

Thanks ghchua. But the way wheelock trade financial assets..

Might be even cross holding/ trading

[Boon]

[Image: zmdsmo.jpg]

I don't think they trade a lot - changes in portfolio value were due more to changes in market value rather than more frequent trading.

Only had HKD denominated shares in 2011 - agreed with ghchua that HKD exposure were higher in prior years (2012, 2013, 2014) 

GBP & EUR denominated investments had been pared down.
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[donmihaihai]

Check cashflow statement

[donmihaihai]

Sorry for posting another.

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