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
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....
poh_83
109 posts
Posted by poh_83 > 2018-02-01 13:45 | Report Abuse
I think at least need >2 years to rebound, just keep it for dividend lol.