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5 comment(s). Last comment by sosfinance 2018-01-15 22:34
Posted by bluefun > 2018-01-10 23:30 | Report Abuse
Thanks for good sharing SOS Finsnce bro, let's patience & confident wait for great rewards :)
Posted by sosfinance > 2018-01-11 07:51 | Report Abuse
1) Agree, dwindling property billings is a concern, similar to its dwindling construction contract in 2016 of about RM600m. They are launching about RM500m before FYE2018 and also planning for another GDV of RM3-4b in the pipeline (including Kwasa Land and others)
2) Yes, many are concern that its property segment may have a "drastic" drop from FY2017 (as it contribute close to 50%) due to poor property market sentiment. The concern are valid, however, it was clearly disclosed during the AGM, Capital 21, the billed sales is about RM43m, and there is about RM260m yet to be recognised (in the minutes),
3) In fact going forward, the Group segment earning structure could be 45:55:5 for Construction:Property:Concession Assets. Look at Scientex, its property segment grown way pass its original manufacturing segment with earning contribution of 2:1. Even for IJM Corp or Gamuda, in their earlier years, they went through this stage, where property is part of their segments, and concession assets also came in. We should look at how the Group allocation of their resources and profit margin (which shown they are competitive) and the momentum of growth they are creating.
4) The management already disclosed in the minutes of its AGM, RM60m recognised and about RM260m to go over next 2-3 years on Capital 21 alone. Well, when a stock is unpopular, it may take more time to appreciate this issue, meanwhile, the darlings of the market now is Oil & Gas. Who cares about property? Isn't it an opportunity, do you buy when the market is hot? or when no one care?
Posted by sosfinance > 2018-01-11 09:53 | Report Abuse
Some seminar said, focus on growth stocks (e.g. KESM) rather than undervalued stocks (I agree). Some see Gadang as an undervalued stocks, actually it is a growth stock as well (but fall under the unpopular sector at the moment). 1-3 years down the road you will know. What is the point of investing in growth stocks when it is fully valued (i.e. taken into account future growth into the price)?
Posted by sosfinance > 2018-01-15 22:34 | Report Abuse
For those who are not familiar with Capital 21 project. Gadang only contribute the land in the JV, in return, given a 16.7% share of GDV of the entire project. Based on initial agreement, the total share of GDV is up to RM300m, but later adjusted to about RM320m due to higher adjusted GDV.
GENERAL STATEMENT
Many are talking about Johor properties are 10 or 20 years ahead of its time, including some Johorean who stayed in there (General statement).
FACTS
However, what they are not aware is, about 70% of the share its entitlement will be paid to Gadang upon completion of the Non-HDA component, i.e. the retail segment of the project, which is expected to be launched by August 2018 (As per Capital City Limited, the developer of the project). Hence, major chunk will be recognised by August this year or plus minus few months of delay.
FACTS
The share of profits (on GDV) is based on construction progress. It has nothing got to do with how well the project does after one day or 10 years later. Even Capital City failed after a few years, Gadang would have received all its portion on the share of profits (as per management in the minutes of AGM - within 2 years).
FACTS
Gadang has about RM3-4 billion of GDV to be launch over the next few years despite the low unbilled sale on the property. Hope this clear the misunderstanding.
Valuation does not determine the share price.
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CS Tan
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This book is the result of the author's many years of experience and observation throughout his 26 years in the stockbroking industry. It was written for general public to learn to invest based on facts and not on fantasies or hearsay....
Flintstones
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Posted by Flintstones > 2018-01-10 22:46 | Report Abuse
Dwindling property billings is the problem. If you look at the earning structure, gadang is half a property company. So separate valuations have to be given to two different business. Currently, property business is valued at 6-7x PE. The market will appreciate gadang better when information regarding money flow from capital 21 is more clear