Of course Heeton is trading at too deep a discount to RNAV. Lack of analyst coverage is the reason and lack of publicity elsewhere. RNAV is close to S$2.00 while the stock is 78 cents only. I am looking at Heeton jumping to above $1.00 before the year is out.
Heeton's bonus issue, while hinted at during the recent AGM, has a small surprise in the form of the bonus warrants. To me, the bonus warrant is a rights issue that is cleverly repackaged as free warrants - because the warrants have a life of only 2 years and an exercise price which is "doable".
The jump in Heeton's share price subsequent to the announcement is proof once again (despite many companies claiming that "bonus issues have no material effect" on the worth of a stock) that bonus issues do benefit share prices, and hence shareholders.
We know, of course, that bonus issues (or rights and stock splits) do not affect the company's EPS/NTA on paper. But the reality is that market players react to such announcements, and subsequently share prices are affected, sometimes substantially. Hence, "on paper" logic is one thing, but what happens to the actual share price is another - and in Heeton's case, it clearly shows that "what is" (ie, the price reaction) has to be acknowledged, rather than simply dismissed by those who argue on "what it should be (ie, no effect)".
I hope that small shareholders can cite Heeton's bonus issue this time in support of their calls for other companies to make similar corporate moves - especially those that have a justification for it (eg, low liquidity, good ratios, high reserves). Heeton's bonus issue this time could well be due to one shareholder's plea to the management during this year's AGM, and we thank him as well as the management for heeding this call. Next year, during AGM season, perhaps we can all share some "reality wisdom" with other corporate bosses (like those of Hiap Hoe/SB perhaps)?
In the case of Heeton, its fundamentals are quite clear to those who look at the stock closely. My quick recap of Heeton: RNAV above $2 per share, EPS should be consistently high over the next 3 years (mainly from Boutiq, Sky Green, Newest and KAP), possible surprises in clearing of Lumos stock, sale of shopping centre and positive news on El Centro.
Apart from the fundies mentioned, Heeton will be the only developer stock that has a warrant issue for speculative players to "fry" - another "reality wisdom" that escapes those who are locked into "on paper" logic.
Having said that, the Singapore government's latest housing loan move could dampen demand for properties, and have a negative effect on the physical market, and property stocks. That is market risk, which is another topic altogether, but do take it into consideration in your own analysis.
Adding to what Sumer said, I feel that Heeton should also open up to the media & analysts. Now, where got analyst coverage? While some analyst reports are too shallow, it is still a guide to investors who don't have a chance to meet management.
another underlooked stock which holds a host of freehold ppties is hupsteel.
its ppties are last valued in 1993 at ard 14m. this includes a total of sone 50,000sf freehold industrial land, 2freehold shophouses, & 4freehold shoplets.
plans for redev of 6kim chuan 33000sf land out already, into a 7storey building.
nav is at 33c based on 1993 land valuations. now trading at 22.5c.
immense upside on its freehold gems awaits.
its management is rapidly increasing its sharebuyback.
and despite its half dead steel biz, they are still paying dividends regularly. the only catch is that its core steel biz is highly cyclical.
takr a look at its ar.
the true nav might be in the region of 45-50c, making it less than 1/2price now.
increase in rig orders by our big boys ie semb/kepcorp is one possible catalyst. but thats hard to say definitely.
wats more certain is redev of 6kim chuan into a 80000sf freehold building in 18mths time. this shd start contributing rental income then.
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