Frasers Property (formerly: Frasers Cpt (FCL))

[greengiraffe]

Flaw In Australand Development Unit Valuations?

ALZ's development unit is touted to be the growth division comprising 30 - 40% of EBIT over time. The development division has a projected end value of A$7.5bn based on the annual report.

http://infopub.sgx.com/FileOpen/Target_s...eID=306200

The independent valuer of Australand uses the above simplistic method to value its development divisons - available under section 8.4 from page 103 - 108.

I searched high and low in ALZ's 2013 annual report and found on page 84 value of landbank:

i) http://phx.corporate-ir.net/External.Fil...U9MQ==&t=1

and the independent valuation report for details of landbank and found none. There are no details of development landbank. However, FCL spent 1 month performing due diligence at Australand before going ahead with the final offer.

I think Charoen and his team must have done a more detail analysis of the market value of the land bank instead of relying on the simplistic EBIT multiple approach.

Only time will tell.

Vested
GG