ValueBuddies.com : Value Investing Forum - Singapore, Hong Kong, U.S.

Mr Chua has been accumulating shares for the past month or so. If anything, that's good news and unlikely to be a value trap.

http://www.businesstimes.com.sg/companie...for-ho-bee

surprised me today of the Eporo Tower project. this was never into my monitoring window.. just know this today... think can only be knowing more details from annual report

TP Chua is a smart cookie and his actions so far is indicative on his view for Singapore prop mkt as a whole...

http://infopub.sgx.com/FileOpen/HBL_Pres...eID=362192

Good to see growth is still on the agenda - but with only S$10m cash on hand (based on 1Q FS) - plus even considering full S$66m proceeds from Forte - this S$300m purchase will be a huge drain on cash, and add greatly to borrowings, limiting any future ability to acquire and act.

What would the smart cookie do next? (and when?)

Property development and investment is a high leverage business. Pretty sure Ho Bee lined up good financing for the purchase to make it financially worthwhile.

Ho Bee started from UK years ago before making its big pot in Sentosa...

Akan Datang

(29-07-2015, 09:54 PM)vested Wrote: [ -> ]Good to see growth is still on the agenda - but with only S$10m cash on hand (based on 1Q FS) - plus even considering full S$66m proceeds from Forte - this S$300m purchase will be a huge drain on cash, and add greatly to borrowings, limiting any future ability to acquire and act.

What would the smart cookie do next? (and when?)

http://infopub.sgx.com/FileOpen/HBL_Pres...eID=363258

Chua TP sees something that we don't?

http://infopub.sgx.com/FileOpen/HBL_Pres...eID=380668

Another big acquisition in the UK. Their investment property portfolio is huge!

(Not Vested)

Interesting, they have only 12 Mils in cash and huge amount of debts~ 1.3 billions, unless they recently sold off wholesales some property-held-for-sales then i am not sure where is the source of money.
Their borrowing cost is incredible low and my hat off to the management, they really bet BIG BIG time on london office.
I guess they will need to have some kind of REIT spin off soon or divest some property in the next 2 years as the size of their debt is really huge. Before that, i think no more acquisition for some time.

This deal consider good as they have rental contract with british government till 2023 at 5% yield (against Ho Bee borrowing cot of less than 2.5%)

(01-12-2015, 06:27 PM)SLC81 Wrote: [ -> ]Interesting, they have only 12 Mils in cash and huge amount of debts~ 1.3 billions, unless they recently sold off wholesales some property-held-for-sales then i am not sure where is the source of money.  
Their borrowing cost is incredible low and  my hat off to the management, they really bet BIG BIG time on london office.
I guess they will need to have some kind of REIT spin off soon or divest some property in the next 2 years as the size of their debt is really huge. Before that, i think no more acquisition for some time.

This deal consider good as they have rental contract with british government till 2023 at 5% yield (against Ho Bee borrowing cot of less than 2.5%)

The Company does generate $30-35 million rental revenue per quarter so perhaps some of the cash-flow in 4Q was diverted to finance the acquisition.

I don't think the debt is really huge. The gearing as of 3Q 15 stood at 31%. Quite a number of commercial REITs have far larger leverage (with a much larger dividend payout ratio).

I do agree with you - it does seem like a good deal with a very strong counter-party.

(Not Vested)

(29-07-2015, 10:41 PM)greengiraffe Wrote: [ -> ]Property development and investment is a high leverage business. Pretty sure Ho Bee lined up good financing for the purchase to make it financially worthwhile.

Ho Bee started from UK years ago before making its big pot in Sentosa...

Akan Datang

(29-07-2015, 09:54 PM)vested Wrote: [ -> ]Good to see growth is still on the agenda - but with only S$10m cash on hand (based on 1Q FS) - plus even considering full S$66m proceeds from Forte - this S$300m purchase will be a huge drain on cash, and add greatly to borrowings, limiting any future ability to acquire and act.

What would the smart cookie do next? (and when?)

Actually, i am doubtful about whether ho bee made money from sentosa. Its first few projects made decent $$ but its last 2 or so projects bought land at such a high price that with the high unsold sentosa inventory now, i think overall they probably just broke even. The only project that truly made good profits in the past 5 years was probably bidding for that plot of land at bunon vista mrt