dividend depends on earnings. lower earnings, lower dividend. is penang that bad? really that bad? competitions is fierce too, mahsing, eco world....invading penang...
Tambun is a lesson in "what is already cheap can become much cheaper".
The people who paid 1.2 above, it was cheap-ish then. But at 0.95, its quite attractive given the type of property development company it is. Its nowhere near as good NTA or RNAV wise compared to say ORIENT, DAIMAN or PLENITUDE, but this company is much much more efficient with its capital allocation that those above, and yet, it trades at such low valuation.
Need to wait? At this kind of price, i can wait forever hahaha. Only question now is, where to find the money to buy, sell or deposit in money =(
Jon, good points - I like this company and how they treat their shareholders, but I'm waiting for the next Q - unbilled sales are very low and we need to watch out for potential plunge in earnings. The market, bearish as it is on property, may punish it severely a la Huayang.
I want to see more future revenue streams being secured before I commit.
At this price, people are pricing it as if it has no prospect at all, that their net asset is worth less than what is written in the FS, and as if the management is rubbish.
All of which is untrue.
I'm not that big of a fan of projecting too far into the future. Pearl city and their current developments should keep it busy for the next 2-3 years.
ECOWORLD etc on the other hand, yes best management etc etc, but at 20 pe, you're paying for it and more imho.
Do note that i'm probably buying only a small 2-3% position, due to lack of cash and other just as attractive opportunities.
Jon, thanks very much for sharing, those are really good points. The management, as far as I can see, is solid, make good margins, and is not averse to sharing with minorities.
I've been in some value traps, that's why I'm a bit more cautious these days, and look more to the Growth side.
Maybe you can help me privatise PARKSON too, where I've been stuck for a while ;)
Look, Tambun is actually a great company. It has a near 20% ROE (even in these difficult conditions!) while it trades at a mere 0.7x of Book Value! The dividend, even if halved, should still be a handy RM0.05/share, which should translate to an over 5% yield at current valuations. Balance sheet is relatively clean. Plus it solely has exposure to Penang property market, which according to some people I have spoken to, is in better health compared to the market in KL/Selangor/Johor.
The problem with Tambun however is the scary fall in unbilled sales. If you monitor its movement QoQ/YoY for the past 2 years, you see that unbilled sales have fallen to ALMOST NOTHING, yet the earnings have held up strongly. This means, logically, that at some point in the near future the earnings have to fall off a so-called "cliff".
Another problem with Tambun is the lack of future visibility beyond Pearl City, which can only sustain them latest until 2022/2023. However, this is not really a problem...rather it is an opportunity! Tambun has been seeking landbanking opportunities for a very long time already. The majority shareholder/owner is also the main corporate guy in-charge of the company. He definitely has a plan!
I am quite certain that as soon as Tambun does some landbanking its price will appreciate 20-30% and bring it back to book value at least.
Pearl City Mall in deed has been generating a recurring income already. That's why Tambun can keep a good profit even unbilled sales is decreasing(but still can last for a few more years, not zero like what nikicheong bullshit.). All investors must know its strength. Property market will soon rebounce at the time no body know when it is.
"closed period" means a period commencing 30 calendar days before the targeted date of announcement up to the date of the announcement of the following to the Exchange
Very healthy cash levels. I think Tambun's selling point now will be the dividend yield cause the cash can finance dividends handsomely for the next 2-3 years...by which point you'd expect the property market to have recovered. Even if the dividend drops to 6 sen a year, if you buy in at current levels you will be getting a yield of nearly 7%. Very hard to beat actually. I foresee a correction in the price soon once it is clear that dividends won't simply fall off a cliff.
Tambun Indah - Missed Sales Target Author: HLInvest | Publish date: Wed, 28 Feb 2018, 09:41 AM
Results Below expectations: TILB’s FY17 core PATAMI of RM82.6m came in below expectations, accounting for 92.6% and 91.5% of HLIB and consensus full year forecasts, respectively. Deviations Mainly due to slower sales and lower-than-expected margin. Dividends None. The final dividend is usually declared after subsequent 1Q results. Highlights QoQ: 4Q17 revenue was down (-14.7%) while core profit contracted by 38.8% due to fewer on-going projects, weaker margin and further dragged by a RM4m provision for the loss of a low cost housing project. YoY: Revenue fell by 26.0% mainly due to fewer on-going projects and lower new sales. Core net profit declined more drastically by 50.6% caused by lower margin product mix. FY17: Core net profit declined by 22.8% on the back of lower revenue (-21.8%) due to lower new sales and fewer on-going projects as some projects were completed in the prior year such as Pearl Residence and Pearl Harmoni. In 4Q17, total new sales achieved was RM30.2m (RM17.8m in 4Q16), bringing FY17 sales to RM146.3m (FY16: RM229m), falling short of full year target at RM180m. Shrinking unbilled sales at only RM66m (cover ratio of 0.24x FY17’s revenue) remains the concern on the sustainability of earnings moving forward. Management is looking to sustain the earnings by improving the average take-up rate (currently at 70%) for its ongoing projects with a total GDV of RM848m. Three new planned projects namely Palma Residency (GDV: RM50m), Permai Residency (GDV: RM53m) and Palm Garden (GDV: RM110m) are set to launch in FY18. Risks Delay in new project launches. Forecasts We reduce our FY18 and FY19 earnings by 7.3% and 6.6%, respectively after factoring in lower sales assumptions. Rating TRADING BUY ↔ ; TP: RM1.23 Maintain TRADING BUY as we believe the retreat of share price is overdone with potential attractive dividend yield of c.8% at below average P/E multiple despite overall soft sentiment on the sector. While the replenishment of unbilled sales may be slow with delay in project launches, TILB remains one of the strong beneficiaries of the rising land prices in Penang mainland with attractive margin. Valuation Target price is lowered to RM1.23 (from RM1.27) based on unchanged discount of 45% to RNAV of RM2.26. Source: Hong Leong Investment Bank Research - 28 Feb 2018
Tambun is oversold and undervalued at current price! Look at its strong balance sheet, cash rich, low debt, current price below NAV, etc. Profits are dropping is because of slowdown in property market, not the company's problems. The bottom line is property market will recover sooner or later. DYODD!
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Posted by poh_83 > 2018-02-01 15:55 | Report Abuse
Is ok, it keep drop then you keep buying, once it rebound then slowly sell....