04-09-2012, 09:09 AM
(03-09-2012, 03:45 PM)d.o.g. Wrote:(03-09-2012, 03:10 PM)propertyinvestor Wrote: I dont understand why you guys are so obsessed with Molokai properties? Its peanuts compared to the Hotel / Oil and Gas royalties asset. If they can raise cash from it good. But really, its not material to begin with.
There are only 5 assets identified in the FY2011 annual report:
Guoman Hotels
Clermont Leisure
Bass Strait Oil Royalty
Molokai Properties
Denarau Properties
Of these, Guoman is clearly the largest. The smallest are Denarau (US$5.6m book value) and Clermont (casino license valued at $US46.5m). The book value of Molokai (~US$170m) actually exceeds that of the Bass Strait Oil and Gas Royalty (US$134m).
So the only asset that can definitely be ignored is Denarau. Clermont, probably. Guoman clearly merits the most time and attention. Molokai and Bass should probably be given at least a look depending on the price of the stock - if it's cheap enough it may not matter. Of course, if the decision to buy hinges on the value of that last 20% of the assets, maybe the stock is not cheap enough.
And cheap is not always good. Cheap can stay cheap for a long time. Quek Leng Chan has many ways to extract value, in the form of salary, director fees, related party transactions etc. Minority shareholders have only a (non-guaranteed) dividend to look forward to, and have to hope for other fools to pay a higher price for their stock.
I believe they have undervalued the O&G Royalties asset. I view GL as a good store of value at current price.