Hotel Royal

[cif5000]

I have not dug into Hotel Grand Central, so I have nothing much to share except that presumably, the company also holds some good property/hotel assets, and the counter is also likely under-priced by Mr Market.

I can accept Hotel Royal because its controlling shareholder - Lee Family, headed by Lee Chin Chuan - has a good reputation, and OCBC (through Great Eastern Life Assurance) is a long-standing shareholder currently holding a 12% stake. The existing old Hotel Royal located at 36 Newton Road should be due for redevelopment - hopefully into a high-end condo - soon.

By the way, today Hotel Grand Central also made an announcement on a similar - but much larger - impact on P&L due to the recent change in tax laws on tax depreciation on buildings in New Zealand.....
http://info.sgx.com/webcoranncatth.nsf/V...00028D2A1/$file/HGCImpactofdeferredtaxchangesinNewZealand.pdf?openelement

Thanks for your thoughts. I asked because both companies carry properties mainly in Singapore, Malaysia and New Zealand, and New Zealand has the tax news.

On HGC, I have no idea the background of the controlling shareholder Tan Eng Teong. His brothers also sit on the board and his daughters and niece are in the management team (this is a non-sexist statement). They also control the associate company listed on Bursa.

In Singapore, HGC's hotel along Orchard Road should worth some money and can also be redevelop as the area renews itself.

I don't understand your meaning of "much larger". Are you referring to the absolute figure? The tax impacts for Hotel Royal and HGC are $4.7m and $12.8m respectively. If we base them on 1H10 pre tax earnings, then that impacts represent 90% for HR and 113% for HGC. Comparable I would say. The main reason is of course HR has a slightly lower percentage of property asset in NZ - 17% vs 22%.