You fail then to consider the impact of a stable 7 to 8 cents of EPS in the years beyond the first year. Which IMO is more important to the company's valuation. Pay 21 cents now and company earns it back in 3 to 4 years. Not good enough in your opinion?
(28-07-2014, 11:44 PM)Curiousparty Wrote: [ -> ]Revenue = 7690sqm x 10.76 x efficiency ratio (say 80%) x 762 PSF (based on 2013 freehold rate) = $50 mil.
(basis: Factory units with 60-year lease and freehold tenure were transacted at an average of $441 psf and $762 psf, respectively, reflecting increases of 5 per cent and 8.5 per cent from 2012. )
Total cost of land ($zero) + construction = $1650 (PSM) x 7690sqm x 1.2 (20% buffer for rising labor cost, cost overrun)= $15 mil
[Hupsteel is not in the business of construction. there might be cost overrun, etc]
NAV created from KC project = $35 mil / 616 mil = 5.7 cents.
The NAV (or revaluation gain) created from KC project is only a meager 5.7 cents, after waiting for a miserable 2-3 years
How many " 5.7 cents NAV gain" can we create from all the freehold properties that Hupsteel has and how long do we have to wait for all to be redeveloped?
we are looking at the RATE of NAV creation, relative to the existing NAV
*****************
The Board of Directors of Hupsteel Limited (the "Company" and together with its subsidiaries, the
“Group”) is pleased to announce that the Group has entered into an agreement (“the Building
Agreement”) to redevelop its freehold property at 6 Kim Chuan Drive (the “Property”) into a 7-storey
industrial building with an elevated car park having a gross floor area of 7,690 square metres.
sorry, don't quite get it. Not sure how u get EPS of 7 to 8 cents.
Thought the initial gain is one-off revaluation gain of 5.7 cents.
Thereafter, if the company manages to lease out the premises, then the going rental rate is about $2.5 PSF per mth.
{basis:
http://www.commercialguru.com.sg/project...ntre-19342}
Recurring income per annum = $2.48mil or 0.4 cents EPS
(this is provided the whole floor space is leased out).
don't see how the company can have an recurring EPS of 7 to 8 cents per annum.
Did I calculate wrongly? If so, pls kindly point out. Many tks in advance.
(? ~ ?)
(29-07-2014, 12:16 AM)psolhawk Wrote: [ -> ]You fail then to consider the impact of a stable 7 to 8 cents of EPS in the years beyond the first year. Which IMO is more important to the company's valuation. Pay 21 cents now and company earns it back in 3 to 4 years. Not good enough in your opinion?
(28-07-2014, 11:44 PM)Curiousparty Wrote: [ -> ]Revenue = 7690sqm x 10.76 x efficiency ratio (say 80%) x 762 PSF (based on 2013 freehold rate) = $50 mil.
(basis: Factory units with 60-year lease and freehold tenure were transacted at an average of $441 psf and $762 psf, respectively, reflecting increases of 5 per cent and 8.5 per cent from 2012. )
Total cost of land ($zero) + construction = $1650 (PSM) x 7690sqm x 1.2 (20% buffer for rising labor cost, cost overrun)= $15 mil
[Hupsteel is not in the business of construction. there might be cost overrun, etc]
NAV created from KC project = $35 mil / 616 mil = 5.7 cents.
The NAV (or revaluation gain) created from KC project is only a meager 5.7 cents, after waiting for a miserable 2-3 years
How many " 5.7 cents NAV gain" can we create from all the freehold properties that Hupsteel has and how long do we have to wait for all to be redeveloped?
we are looking at the RATE of NAV creation, relative to the existing NAV
*****************
The Board of Directors of Hupsteel Limited (the "Company" and together with its subsidiaries, the
“Group”) is pleased to announce that the Group has entered into an agreement (“the Building
Agreement”) to redevelop its freehold property at 6 Kim Chuan Drive (the “Property”) into a 7-storey
industrial building with an elevated car park having a gross floor area of 7,690 square metres.
Am I seeing things? Currently >1000 lots on queue at 21 cts.
Economic growth still not that great. I wonder what could cause such interest.
Calculation error, my apologies. You are possibly right with regards to your estimates for EPS. We will see what Hupsteel does with its building when completed.
Even if all the freehold properties are redeveloped, probably we are looking at a max RNAV of ~$0.50.
Applying 35% discount (common practice to all property counters) to RNAV, we are looking at only $0.33. ("realizable NAV")
And this is assuming ALL Freehold properties are redeveloped .
The rate of NAV adjustment to reach $0.33 may extend to one decade or more , assuming Hupsteel takes 2 to 3 years to redevelop one property.
I suspect this could be a share buy back?
Volume is abnormally high at 2 million shares, against average of 100K share a day
From FY report
"Under the Share buyback mandate approved by shareholders, the Company purchased a total of
2,397,000 shares for S$533K by way of on market purchase on the Singapore Exchange Securities
Trading Limited during the quarter. "
let wait for announcement, if share buy-back...
or could just be valuebuddies loading up 500K of HS!
Paulow is a fervent believer of HupSteel, might be him. Who knows?
There was no announcement yesterday.
Looking at the historical records, 20 day average volume is 206K shares.
There are precedents though of such high volume. 31/10/2013, 22/04/2013.
The absolute peak though was Jan 28-31, 2013, with 16 million shares traded.
This caused a 26% jump in one day, from 19 cents to 24 cents.
However, word of caution is that share price subsided to previous levels over the next 1 year or so. And in fact has not hit the 25 cents mark since then.
Attached is the volume history
The sum did not really work out for Hupsteel. Not sure the value proposition...