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Hi GG,
I guess only insiders have information as to why there have been delays in the launches of the consortium’s GBD projects. The rest of us can only try to read between the lines (say from Oxley’s presentation for eg) or listen to what KSH management says at the next AGM.
My bullishness about KSH a few years ago was mainly premised on the multi-year GBD project, and as the launches have not started, we can’t help but see some investors giving up on that premise.
The questions now are:
1. Is the consortium’s GBD project in trouble? Will nothing be launched at all?
2. What’s the loss to KSH in a worst case scenario?
3. How much of KSH’s share price has already built in this worst case scenario?
My hunch is that GBD is not in dire straits. After all, a rock climbing feature has already been built, and there was a setting up a unit to handle hotel investments in GBD recently. Nevertheless, this is just an educated guess at best.
I have not done the maths as to how much the loss will be, but my suspicion is that it will not put a big dent in terms of figures, unless construction has already begun (in which case I would not expect the worst case scenario to happen).
Meanwhile, I suspect KSH’s share price has already built in quite a bit of the worries about GBD, judging from the company’s recent share buyback as well as the relatively higher NTA of 57ct. As of today, 1.1 million shares have been bought back in about a week. If the buyback carries on at this pace, perhaps the share price will rebound from here.
As for its Singapore business, KSH has sold enough units in its JV projects here so far as to not warrant much worries.
I think Oxley is much riskier than KSH, but even then I am not overly worried about Oxley. I believe it will be able to deleverage in good time.
There has always been talk about KSH being a target of shorting, and a big one at that. I am not sure how true that is, but if true, perhaps the launch and good sales at GBD will force a short covering.
In any case, KSH is not alone in being an underperformer. Most second liner property stocks as well as many other retail counters on SGX suffer from disinterest among retail players. These days, it’s only the algos and the institutions which are active, and they are mainly playing the blue chips and liquid bigger caps stocks. To join in the action, one has to own the likes of banks and big cap prop developers. Once a while though, some small cap counter will spring to life, in a “situational” play. Until then (and hopefully in the case of KSH), there is nothing much we can do except diversifying into liquid bigger cap stocks.
I guess only insiders have information as to why there have been delays in the launches of the consortium’s GBD projects. The rest of us can only try to read between the lines (say from Oxley’s presentation for eg) or listen to what KSH management says at the next AGM.
My bullishness about KSH a few years ago was mainly premised on the multi-year GBD project, and as the launches have not started, we can’t help but see some investors giving up on that premise.
The questions now are:
1. Is the consortium’s GBD project in trouble? Will nothing be launched at all?
2. What’s the loss to KSH in a worst case scenario?
3. How much of KSH’s share price has already built in this worst case scenario?
My hunch is that GBD is not in dire straits. After all, a rock climbing feature has already been built, and there was a setting up a unit to handle hotel investments in GBD recently. Nevertheless, this is just an educated guess at best.
I have not done the maths as to how much the loss will be, but my suspicion is that it will not put a big dent in terms of figures, unless construction has already begun (in which case I would not expect the worst case scenario to happen).
Meanwhile, I suspect KSH’s share price has already built in quite a bit of the worries about GBD, judging from the company’s recent share buyback as well as the relatively higher NTA of 57ct. As of today, 1.1 million shares have been bought back in about a week. If the buyback carries on at this pace, perhaps the share price will rebound from here.
As for its Singapore business, KSH has sold enough units in its JV projects here so far as to not warrant much worries.
I think Oxley is much riskier than KSH, but even then I am not overly worried about Oxley. I believe it will be able to deleverage in good time.
There has always been talk about KSH being a target of shorting, and a big one at that. I am not sure how true that is, but if true, perhaps the launch and good sales at GBD will force a short covering.
In any case, KSH is not alone in being an underperformer. Most second liner property stocks as well as many other retail counters on SGX suffer from disinterest among retail players. These days, it’s only the algos and the institutions which are active, and they are mainly playing the blue chips and liquid bigger caps stocks. To join in the action, one has to own the likes of banks and big cap prop developers. Once a while though, some small cap counter will spring to life, in a “situational” play. Until then (and hopefully in the case of KSH), there is nothing much we can do except diversifying into liquid bigger cap stocks.