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Yesterday's announcement too complicated for me. But I note that PL Square retail portion is valued at $300m for 80% stake or $375m for 100%, which divided by 95,000 sf, means the value of the shops is about $4,000 psf of NSA.
I think LKH the gains given is not the whole story. Shop space undervaluation should be much higher.
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Eh, almost all the office units are sold already. So, it's a done deal. Money locked in already. Office demand risk is now in the hands of the buyers of the strata units.[/align]
Only the retail shops are yet to be sold, but even that is not a problem. I think it will be sold to a Guthrie unit as this is prob part of the deal when the land was bought for development. And since the transfer yesterday values the retail at $4,000 psf, it looks like a fair deal (although not optimum as strata selling maximises price, like what CES do)
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Correction: 95000 sf retail space valued at S$300m against book value of $190m.
At this point of development (dont know what % completed), LKH stand to gain $27.5m (pretax to be conservative) for the dilution from 80% to 55%.
Look at it the other way around - LKH 80% share of original costs of retail podium is S$152m. They sold 25% to existing partner Sun Ventures - Invesco at $75m (based on $300m).
Basically on a net basis LKH's carry costs of the remaining 55% is $77m that is worth $165m or a surplus of $0.119/share.
The remaining 55% stake is likely to generate a recurrent income of around 1.4 cents just on retail rental on 100% when the mall is operational.
Vested
GG
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Why is this fundamentally strong company being sold at such cheap prices?
A week ago it was at a high of 78cents! Even taking into consideration XD (4.5c)
Patience is a virtue.
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(13-06-2013, 03:31 PM)TheMillennium Wrote: Why is this fundamentally strong company being sold at such cheap prices?
A week ago it was at a high of 78cents! Even taking into consideration XD (4.5c)
Market sentiment my friend. Market sentiment overrules all things at least for present till ?
WB:-
1) Rule # 1, do not lose money.
2) Rule # 2, refer to # 1.
3) Not until you can manage your emotions, you can manage your money.
Truism of Investments.
A) Buying a security is buying RISK not Return
B) You can control RISK (to a certain level, hopefully only.) But definitely not the outcome of the Return.
NB:-
My signature is meant for psychoing myself. No offence to anyone. i am trying not to lose money unnecessary anymore.
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For LKH the "kateks" are active in this counter. I know because they borrowed my shares to short. If it drops much further I am going in to pick some. Lets put a short squeeze on them. For LKH we can look forward to 5c for FY13/14 and their earning will only peak in FY14/15 according to the CEO. So we can look forward to at least 10c in total for next 2 years as their projects are essentially all sold.
pls do your own research.