I am also looking at one other counter which I will reveal and provide analysis for shortly.
Markets are weirdly buoyant despite poor operating numbers and industry statistics amidst the backdrop of European crisis and and of further possible tightening in China. The upward moving trend is making it hard for me to buy since its like averaging up - does not make sense. Further, dips are shallow and short.
I neither a rocket scientist nor an expert economist with predictive ability so double dip or not - I do not know. There have been talks that rate hikes in China are unlikely but that does not imply there will not be monetary actions. I guess the only thing that can bring markets down is news of a fresh wave of tightening measures coupled with poor economic data. There remains much structural issues unsolved in both US, Europe, China and even Japan that may pose greater problems which I will talk about soon. One of them is the large amount of bad loans stashed away and not surfacing due to low borrowing costs or innovative financing vehicles. (Note that both changes in rates and credit liquidity are crucial)
It does seem that theres some form of reflexivity now in the markets, people buying up due to large liquidity so much so people are starting to think that there may be a chance of a bull in between. While if that is true, it is still in the building up stage. If that turns out to be fake, it may act otherwise, with poor economics resulting in falling asset values. With a lower collateral unable to meet the LTVs, debts once again, requires more refinancing and payments and less entities willing to put up credit. People liquidate to refinance, pulling down other asset markets and more selling ensues as people switch from slightly bullish to " I knew it was a bear all along".
Anyway, heres Roxy's short update.
- 2Q revenue up 27%, bottom line up 37%
- Cash and equivalent at $116.9m and debt at $270m (refer to previous update on why debt is not high)
- Lately Accor sold the 538 room Ibis hotel at bencoolen for $200m (3stars) or $374k / room so that is pretty much in line with Roxy's grand mecure hotel (4stars) which is also managed by Accor
- Still a far cry from the $400k/room levels for other similar quality names
- The quality and land may also mean upwards of $200m for Grand Mecure is very reasonable
- Hotel room AOR and ARR stable (refer to link below)
- 162 Haig and Straits residences had good launches and sales (100% and 77% sold) wow!
- Progress billings of $227.5m to be recognized from 3Q10 to 2012
- Group intends to launch another 2 projects in 2H 2010 out of the current 7 land parcels
- I saw the houses, pretty neat stuff. I would buy one if I could
- Security price is up from $ 0.29 to currently $0.32-33, mkt cap of $203 - 210m
- Remember that hotel if revalued adds another $160m or so to the equity. So thats 70+% upside
http://info.sgx.com/webcoranncatth.nsf/VwAttachments/Att_187BC87BDB05BE374825777600178BE6/$file/Roxy_Ann_Q2FY2010_Presentation.pdf
Disclaimer: The writer is vested in this counter
1 comments:
Great market update.
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