Still waiting for weakness in the share price. Penang mainland property market outlook is also looking rather subdued. Lower my entry price to RM1.35-RM1.38 from RM1.42.
Normally upon the issuance of Notice of Closure of Dividend after trading hours, there will be a rush to buy the share the next morning and push up the price if the dividend yield is attractive. Not many investors are aware that Tambun AGM has approved a final dividend of 7 sen, giving a yield of 4.93% based on latest closing price of RM1.42. In November it is expected to give an interim dividend of 3 sen., making a total annual payment of 10 sen or a dividend yield of 7%.
In 2016, the Notice of Closure was issued on 7 June (Tuesday), while in 2015, it was issued on 30 June (Tuesday). However, in 2014, it was issued as late as 19 August (Tuesday). It is possible that the Notice of Closure could be issued after trading hours tomorrow (Tuesday). Once the Notice of Closure is issued, the price of Tambun could turn upward, just as in the past, as well as in the case of UOADev shares.
Let us hope Tambun will issue the Notice of Closure for the final dividend as soon as possible, hopefully tomorrow evening, so that we could reap some profits especially for those of us who have accumulated the shares on it s recent downturn.
Despite a drop in sales revenue, Tambun EPS of 5.61 sen for the first quarter ending March 2017 was higher than the corresponding quarter in 2016, due to better profit margin and rental income. If we annualize the first quarter EPS, Tambun PE ratio is attractively low at less than 6.5 times. It has the capacity to pay good dividend, if current EPS can be maintained. An analyst opined, sales revenue could improve in the second quarter, as the number of bank loan approvals could be higher. Invest at your own risk, best of luck.
If you are still holding Tambun shares which you have bought at a price higher than the latest closing price of RM1.42, do not panic and do not sell the shares now. If you sell, you will suffer irrecoverable capital loss as well as sacrifice the 7 sen dividend already approved by at the AGM on 18 May 2017. Wait for the issuance of Notice of Closure of the 7 sen dividend which is equivalent to a dividend yield of 4.93%. Once the Notice of Closure of dividend is issued through Bursa website after trading hours and release through the Press the next day, investors attracted by the high dividend yield (better than FD rate) will rush in to buy the share and push up its price. Only then, you may want to consider selling the shares before the ex-dividend date or hold them to be eligible for the dividend payment.
The recent experience of UOADev share price is good lesson of the need to wait until the issuance of Notice of Closure. When UOADev released its recent first FY quarter results, the EPS declined significantly against its preceding quarter results. Some investors panicked and sell down the stock, either knowingly or unknowingly sacrificing UOADev AGM approved 15 sen dividend (a yield of more than 5%). In the day trading session before the Notice of Closure was issued in the evening after trading hours, the share price dropped by 11 sen. Immediately the day after the Issuance of Notice of Closure of the 15 sen dividend, investors rushed in to buy the stock, leading to a 12 sen rise in the price of UOADev share. Consider my suggestion: do not sell your Tambun shares now. Instead wait until the Notice of Closure of dividend is issued. Only then you can either consider to sell or take up the dividend.
Dividend is good but is it sustainable? Tambun unbilled sales is not high or too dependant on Pearl City(PC) to generate 90% revenue. I prefer Huayang because 42 sen cheaper and many property projects(include just took over Magna) compare to Tambun PC.
Teck Ng Yes, 7 sen is a good dividend yield of 4.9% against today Closing Price of RM1.43. Much better than FD rate. 06/07/2017 18:38
If you read analyst reports, the rally in the Bursa property stocks (based on KL Property Index) is unjustified/premature given that the property market slowdown is due to extend into mid 2018 at the earliest. Initially at the end of last year analysts were saying that the bottom/through will be this year, hence that led to buying interest in property stocks. However, it is now clear that we have NOT hit the bottom yet...the slowdown will persist till mid 2018 at the earliest, maybe even extend into 2019.
Given that, I fully expect most property stocks to slowly recede 10-15% from their current levels.
Tambun is maybe a unique stock cause it has full exposure to Penang, very high ROEs in spite of the downturn, and an extremely healthy balance sheet with the catalyst of significant landbanking exercises in the near term. But still...unless there are any catalysts, and especially if revenue/profits drop off a cliff like Hua Yang, it's best to wait a while more, let the property stocks drop, and then get in.
Initially my target was to come in at RM1.42, but now given what I have been reading and listening to people talk, I will only buy Tambun at ~RM1.25. Patience is a virtue. Never rush unless you are certain of a near term catalyst to drive the share price higher.
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nikicheong
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Posted by nikicheong > 2017-06-03 13:23 | Report Abuse
Still waiting for weakness in the share price. Penang mainland property market outlook is also looking rather subdued. Lower my entry price to RM1.35-RM1.38 from RM1.42.