A counter that is so undervalue where the cash it has is even more than their market cap! The total short term investment (bond) and cash of the company is RM160.37m. The total loans is RM327k. Hence, the total cash of the company has is RM160m.
Now let’s see what properties does this company has?
The total assets value is RM120m, which is far overdue for revaluation. Let’s ignore the revaluation part as we are not sure when will the company do it, hence we can see that the total asset value of the company is at RM280 million.
Something that we should not ignore is, they still haven’t include their office tower at Lot 91 which is a JV development with KLCC Property berhad which has yet to include in this property list. Can you imagine the value of this property?
Anyhow, let’s not calculate it since it is still under construction. Hence, the total value of Sapres property is RM120m, we give 50% discount to it as property market is not doing well now and to avoid value trap.
By using the Sum of parts calculation, Cash: RM160m Property (50% discount): RM60m So total is RM220m where the total issued share is just 139m. This work out to RM220m/139m= RM1.58
The share is now traded at RM0.80 which gives you 97.5% return. So is it a Dirt Cheap stock?
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....