Second Chance Properties (26 cents) in the Straits Times today regarding the start of process for en-bloc sale of Sim Lim Sq. Second Chance owns owns 12 retail shops there (aggregate value: about S$23.1 million). Note that NTA of Second Ch is 35 cents.
KGI Trading Ideas - Fu Yu Corporation- Cheap on ex-cash basis, potential
catalyst from change of a major shareholder
Trading volume increased to around 80m (as at 4:00pm today) compared to the
one-year daily average of 2m shares (see chart below).
(Embedded image moved to file: pic21450.gif)
(Source: Share Investor)
The above-average transaction may perhaps be due to a major shareholder, Ng
Hock Ching, disposing his stake in Fu Yu. Mr Ng has been disposing his
stake in the company since March this year, from around 14% stake at the
start of the year to 10% stake as at 10 October 2017. This may potentially
remove a key overhang, in our view, as he has been the only major seller
this year.
(Embedded image moved to file: pic23469.gif)
(Source: Share Investor)
Valuation - cheap on PE (ex-cash) basis
Fu Yu currently trades at 21x forward P/E, a premium to peers average of
13x forward P/E. However, Fu Yu has almost S$100m of cash sitting on its
balance sheet, making up 60% of its total market capitalisation.
If we were to exclude the cash, Fu Yu would be trading at 6x FY17F
consensus earnings, a bargain to peers.
We see bargains in some property counters after the recent correction. Top on the list is Lian Beng whose share price has corrected from a high of S$0.840 on 1 Nov to S$0.710 this morning – back to when it announced the proposed spin-off and listing of its property development business on 12 Oct.
It currently trades at a P/B of 0.59x based on a NAV of S$1.2076 as of 31 Aug and trailing 12-month P/E of 7.2x. We see the steep discount to book and low P/E multiple as attractive, given the potential catalyst of a spin-off and expectations of higher earnings with the current upswing in the property cycle.
