Wheelock Properties

[toiletsiao]

Anyone of you guys invested in Wheelock Properties? I realised theres no discussion on Wheelock Properties.. .. i decided to contribute my share of things...

Based on some simple analysis done...it looks like a good pillow stock with potential to be privatised. Currently it has an NAV of 2.21 against the current px of 1.97 (about 10% discount).. It has a huge cash hoard of 872mil (73cents per share).

Basically Wheelock's income is derived from 3 components - Investment Properties, Development Properties , Equity Investments

Investment Properties:
Wheelock Place Valuation appx 750mil
Scotts Square Valuation appx 300mil

Total: 90cents per share

Development Properties:
Scotts Square (76% sold) Progressive Recognition
Orchard View (9/30 sold) Progressive Recognition
Ardmore 3 (Slated for launch in 2011)

Equity Investments: (My estimation will be grateful if someone can correct me and give me a specific amt )
15% stake in SCGlobal (worth $103mil)
XX% stake in HPL (worth about 235mil)
Total: 28cents per share

Based on the current price of $1.97 ... stripping its cash in bank account nett - bank loans as well as its equity investments.. effectively we are paying only a value of about $1.06 for its investment properties + income derived from its property developement business...most of their profits(90% are derived from this) .. eps from this 2 business is easily at least 10cents per share every yr....its already 17.7cents ytd... looks like a steal to me at this price......not sure what u guys think...

There are also risks/disadvantages associated to this stock

- Depleted Landbank (Left Ardmore 3)
- Lack of Liquidity (75% held by Wharf Holdings)
- Equity investment in SCGlobal and HPL (both dont really pay out good dividends for shareholders its stake in SCGlobal is loss making(paperloss) however its stake in HPL is sitting on a gain of about 55%)

Overall based on the pros and cons i think wheelock is worth buying...keep as pillow stock..haha..just got a niggling feeling they be paying some special dividends this yr..they pay a cash distribution of 2 bucks per share in 2006...so fingers crossed!!!

[freedom]

I am surprised that wheelock only has little debt, and so much cash.

[d.o.g.]

eps from this 2 business is easily at least 10cents per share every yr

EPS is meaningless for a property developer, as project development and profit recognition are lumpy. The best that can be done is to look at the existing landbank and figure out what sort of profits these will convert into, and then discount that back to get the RNAV. Beyond that, the future landbank size, cost and eventual sale price are unknown.

It has been rightly noted that Wheelock has no more landbank left except for Ardmore 3. So unless and until Wheelock buys more land, its development profits will soon go to zero and it will just be a landlord.

[mrEngineer]

My opinion is no special dividends as we have seen past 3 years of 6cent dividends with large amount of cash hoard. I think dividends will be special after e completion of scotts square project after successful leasing of shops & hotel with full revenue recognized and cash collected. Privatization unlikely as well as it is not under a family business if I m not wrong.

[freedom]

I don't see a lot of upside for short term trading, with its depleted landbanks, don't think market will give it multiple of NAV.

and it is not a steady company for long term investment for the current price as well.

property developers tend to be volatile especially after a huge run-up since 2003?

how high can singpoare's private property be?

[wj888]

I remember reading about the CEO on Straits Times before and it leftme with the impression that he is a man of great patience.

I supposed the depleting landbank is not a concern. The CEO is one who will bid his time with the cash horde and buy only when he is confident property market is in a doldrums.

So, in the meantime, as long as the RNAV supports the shareprice, then it's a buy and hold for me.

[starbugs]

The discount to NAV and RNAV is too small for Wheelock to be a candidate for privatization.

The depleted landbank is actually now a plus point with the new property measures.

[freedom]

SC Global could do a cash call very soon.

It has 800+ million debt matured in 2011 and cash on hand only 165 million. with quite some properties completed or near completion, but not launched or sold. with more cooling measures coming, will SC Global obtain enough cash to settle its debt or potentially a cash call very soon?

[yeokiwi]

SC Global could do a cash call very soon.

It has 800+ million debt matured in 2011 and cash on hand only 165 million. with quite some properties completed or near completion, but not launched or sold. with more cooling measures coming, will SC Global obtain enough cash to settle its debt or potentially a cash call very soon?

Unless, the assets used for securing the loans have dropped in valuation drastically(quite unlikely at the moment), SC global will be able to roll over the debt. Besides, SC global has enough cash to pay for the interest on the loans.

$165 million of cash is good enough to handle small drop in the valuation.

[freedom]

SC Global could do a cash call very soon.

It has 800+ million debt matured in 2011 and cash on hand only 165 million. with quite some properties completed or near completion, but not launched or sold. with more cooling measures coming, will SC Global obtain enough cash to settle its debt or potentially a cash call very soon?

Unless, the assets used for securing the loans have dropped in valuation drastically(quite unlikely at the moment), SC global will be able to roll over the debt. Besides, SC global has enough cash to pay for the interest on the loans.

$165 million of cash is good enough to handle small drop in the valuation.

does everyone see a future in property developers?

if not, banks will not roll over the debt given the uncertainty in the property business. just too much risks.

during 2008, it was not that everyone could not pay its debt, but banks still did not allow rollover of debt.

valudation is not the only killer. confidence is also very important.