Low Keng Huat (Singapore)

[BlueKelah]

From previous quarterly for FY16 released 03/09/2016 earlier this year.it seems occupancy was already 97% in early 2015.

[Westgate Tower achieved 97% occupancy as at 23 March 2015]

also [ Our share of loss at Westgate Tower increased by $2.2M to $5.7M during current year from $3.5M during previous year as the major tenants commenced operations only in November 2015.]

From this, one would expect that the tenants there booked their place in the building but only been paying rental since end of 2016.


latest Sept 2Q financials :
Page 3/14
[Share of losses of associated companies and joint ventures decreased by $2.8M to $2.4M in 1H current
year from $5.2M in 1H previous year. It decreased by $2.2M to $0.9M in Q2 current year from $3.1M in Q2
previous year. The decrease in share of losses of associated companies and joint ventures was mainly due
to improved profit performance of Westgate Tower as major tenants commenced operations from Q4
previous year. Westgate Tower achieved occupancy of 98% as at 6 September 2016.]

Page 13/14 of the 

[Net profit before tax and non-controlling interests for investment segment increased to a profit of $1.6M during 1H current year from a loss of $1.4M in 1H previous year. Net profit before tax and non-controlling interests for investment segment increased to a profit of $1.2M during Q2 current year from a loss of $1.3M in Q2 previous year. The increase was mainly due to the decrease in share of losses from Westgate Tower. Major tenants at Westgate Tower commenced operations from Q4 previous year and the occupancy at Westgate Tower is 98% as at 6 September 2016.]

As such it seems that they have been and are still losing money on the Westgate investment but as the rents are coming in since Sept, this investment should turn positive cash-flow by the end of the year


Dun worry, so long interest rate dun go up, this counter buy liao just lock in and go to sleep, its now running on REIT mode unlike the Oxley keep on expanding debt... Boss will take care of you one, they are old hand who knows what they are doing

[money]

I used to be an old shareholder. What i didnt like about LKH now is it 2 major property development projects in singapore may just break even. One of them is at the toh tuck area. The other is balestier towers which if i remember correctly, they have converted it into investment properties because they probably understand that redeveloping and trying to sell now is almost useless.

Dont think there will be significant income stream from its paya lebar retail and westgate for any jumbo dividend soon. But i do agree that it has many undervalued assets

[BlueKelah]

I used to be an old shareholder. What i didnt like about LKH now is it 2 major property development projects in singapore may just break even. One of them is at the toh tuck area. The other is balestier towers which if i remember correctly, they have converted it into investment properties because they probably understand that redeveloping and trying to sell now is almost useless.

Dont think there will be significant income stream from its paya lebar retail and westgate for any jumbo dividend soon. But i do agree that it has many undervalued assets

Yah they have super undervalued assets compared to share price today. I think previously VBs here have estimated a RNAV of around $1.50

But the toh tuck there the Kismis project and the Balestier project are not that exciting and can consider a non-event as far as any big boost to profit. 

This year wont be too bad and EPS this half year is already 5.83c  after Duxton Vietnam sale, so this year at least 3c(5.45% yield) dividend should be secured. Maybe next on the chopping block is Duxton Perth which could bump EPS up further this year.



LKH accounting is using conservative cost model and they seem to make provisions for all sorts of things that they estimate will happen in the future. There is even impairment for loss in the ongoing Balestier project this quarter. Probably have to wait another half year to see what the Westgate and AXA Towers will really bring in.

[gzbkel]

From previous quarterly for FY16 released 03/09/2016 earlier this year.it seems occupancy was already 97% in early 2015.

[Westgate Tower achieved 97% occupancy as at 23 March 2015]

also [ Our share of loss at Westgate Tower increased by $2.2M to $5.7M during current year from $3.5M during previous year as the major tenants commenced operations only in November 2015.]

From this, one would expect that the tenants there booked their place in the building but only been paying rental since end of 2016.


latest Sept 2Q financials :
Page 3/14
[Share of losses of associated companies and joint ventures decreased by $2.8M to $2.4M in 1H current
year from $5.2M in 1H previous year. It decreased by $2.2M to $0.9M in Q2 current year from $3.1M in Q2
previous year. The decrease in share of losses of associated companies and joint ventures was mainly due
to improved profit performance of Westgate Tower as major tenants commenced operations from Q4
previous year. Westgate Tower achieved occupancy of 98% as at 6 September 2016.]

Page 13/14 of the 

[Net profit before tax and non-controlling interests for investment segment increased to a profit of $1.6M during 1H current year from a loss of $1.4M in 1H previous year. Net profit before tax and non-controlling interests for investment segment increased to a profit of $1.2M during Q2 current year from a loss of $1.3M in Q2 previous year. The increase was mainly due to the decrease in share of losses from Westgate Tower. Major tenants at Westgate Tower commenced operations from Q4 previous year and the occupancy at Westgate Tower is 98% as at 6 September 2016.]

As such it seems that they have been and are still losing money on the Westgate investment but as the rents are coming in since Sept, this investment should turn positive cash-flow by the end of the year


Dun worry, so long interest rate dun go up, this counter buy liao just lock in and go to sleep, its now running on REIT mode unlike the Oxley keep on expanding debt... Boss will take care of you one, they are old hand who knows what they are doing

Ah so that's the reason. Thanks for clarifying!
According to the 1H report, loss in associated companies and JV is now 2.4M for first half. Lets wait to see what happens for the full year.

[BlueKelah]

Ah so that's the reason. Thanks for clarifying!
According to the 1H report, loss in associated companies and JV is now 2.4M for first half. Lets wait to see what happens for the full year.

no problem ;D since I am following this stock a bit as well.

Westgate should be cash flow positive by end of this year since the funding for it was from the PLS profits. AXA tower on the other hand they had to take on 32m in bonds as part of the deal with the interest rate at 6% and variable up to even 10%+.

So in longer term if PLS retail / Westgate and AXA can generate >22m net income then the 3c dividend is pretty much sustainable without LKH having to do much other work until the property market start to boom again...

[gzbkel]

>Westgate should be cash flow positive by end of this year since the funding for it was from the PLS profits.

If that's the case, why the $16.1M interest exp for 2015? Is that some kind of bridging loan?

>So in longer term if PLS retail / Westgate and AXA can generate >22m net income then the 3c dividend is pretty much sustainable without LKH having to do much other work until the property market start to boom again...

Historical payout has been around 30-40%. 3c dividend is around 22m, so they need net income of about 55m if they want to maintain the payout ratio.
Not sure if that is possible under current conditions...

[BlueKelah]

>Westgate should be cash flow positive by end of this year since the funding for it was from the PLS profits.

If that's the case, why the $16.1M interest exp for 2015? Is that some kind of bridging loan?

>So in longer term if PLS retail / Westgate and AXA can generate >22m net income then the 3c dividend is pretty much sustainable without LKH having to do much other work until the property market start to boom again...

Historical payout has been around 30-40%. 3c dividend is around 22m, so they need net income of about 55m if they want to maintain the payout ratio.
Not sure if that is possible under current conditions...

LOL that is something i am not too sure as well.... 

For the 16.1 million, It is possibly for the loan that the JV first obtain to buy the Westgate Tower. 


If you look at the AR16 page 79 : Non-current liabilities : Financial liabilities (excluding trade and other payables and provisions) WC(282,690m) WT(260,536m) Total(543,226m)
There seems to be outstanding loan of 543.226m on Westgate. 16.1m interest means the interest rate is about 2.96%.

Cost of Westgate was about $1900 PSF which is only doing $6 psf a month ($72 psf a year) thats 3.79% yield only for the office space. I am assuming the yield of the retail space will be better to balance it out. But looking at longer term, Jurong is gonna be a booming hub if the high speed rail link to malaysia ever comes about, so this investment for LKH is more of a longer term bet on capital gains.

dividend wise depends on the boss loh but historically they do ok payout compared to some other property counters.

[ksir]

>Westgate should be cash flow positive by end of this year since the funding for it was from the PLS profits.

If that's the case, why the $16.1M interest exp for 2015? Is that some kind of bridging loan?

>So in longer term if PLS retail / Westgate and AXA can generate >22m net income then the 3c dividend is pretty much sustainable without LKH having to do much other work until the property market start to boom again...

Historical payout has been around 30-40%. 3c dividend is around 22m, so they need net income of about 55m if they want to maintain the payout ratio.
Not sure if that is possible under current conditions...

LOL that is something i am not too sure as well.... 

For the 16.1 million, It is possibly for the loan that the JV first obtain to buy the Westgate Tower. 


If you look at the AR16 page 79 : Non-current liabilities : Financial liabilities (excluding trade and other payables and provisions) WC(282,690m) WT(260,536m) Total(543,226m)
There seems to be outstanding loan of 543.226m on Westgate. 16.1m interest means the interest rate is about 2.96%.

Cost of Westgate was about $1900 PSF which is only doing $6 psf a month ($72 psf a year) thats 3.79% yield only for the office space. I am assuming the yield of the retail space will be better to balance it out. But looking at longer term, Jurong is gonna be a booming hub if the high speed rail link to malaysia ever comes about, so this investment for LKH is more of a longer term bet on capital gains.

dividend wise depends on the boss loh but historically they do ok payout compared to some other property counters.

iirc they only bought westgate office tower not the retail mall.

[cyclone]

S$10,771.61 per square meter = S$1,000.72 per square foot.

Provisional Tender Results for Land Parcel at Perumal Road for Residential with Commercial at 1st Storey Development

Low Keng Huat (Singapore) Limited is pleased to announce that the Company has emerged as the top bidder of the land parcel at Perumal Road for residential with commercial at 1st storey development. The tender price for the Site is S$174,080,000 or S$10,771.61 per square meter per plot ratio.

The Site has a land area of 3,847.8 sqm and tenure of 99 years. It has an allowable gross plot ratio of 4.2 and a maximum permissible gross floor area of 16,161 sqm including 500 sqm of commercial space at 1 st storey. The proposed development, will comprise approximately 200 housing units with commercial at 1st storey.

[Jacmar]

There goes the 4 cents div. now looking forward to 3 cents only..fingers cross. at 3 cents div is still decent at about 5%. Overall this is not a big project by their stds of past developments. They need to keep their construction arm occupied while lying low. construction is tough right now n margins low. only those that does dev n construction can make some money. Location wise for this project is quite good.