Hiap Hoe

Hi,

profit guidance for 2Q results due out in a few days.Fundamentals look great and year end results should be profitable.Notwithstanding its Nav of$1.55 and eps 75.28 in first quarter there is a sell down of about 6%after the announcement by management.

Will appreciate any comments on their Y/E results.
Thanks

Hi gmj, I have discussed Hiap Hoe in the past on another thread “2nd Liner Property stocks”, but since you have created a unique one for the counter here, here’s my take on the company’s results released last night:

As expected, there is nothing to worry about with regards to the loss, as it consists of one-time charges and/or timing of expense reporting. $9.2m was attributed to admin expenses for the Superbowl exercise (although I have not idea what this is), $3.9m depreciation of Aussie property acquisition, and $5.5m stamp duty for its Aussie buy. The items are not recurring and are all lumped into one quarter’s results. Nothing sinister.

There was also very little revenue recognition from Waterscape this past quarter, with only 1.67% taken into its books. This adds further to its poor results.

In any case, Hiap Hoe is not an earnings-story for these couple of years, so “poor” results are not unexpected. It probably has some earnings meat left in Waterscape, but after that, it will have to wait for its Aussie profits to kick in from 2017. However, unlike stocks which stand only on their earnings projections, asset-rich counters like Hiap Hoe (current NAV $1.54) are unlikely to plunge on poor earnings alone. My personal estimate of Hiap Hoe’s RNAV (not taking into account its Aussie projects) is about $1.70-80 (mainly from unrecognized Waterscape profits and surplus valuation of Superbowl’s commercial spaces). However, I am not expecting good dividend payouts unless the company is successful in selling Treasure at Balmoral or its Superbowl assets.

Yesterday, the co also released information (although skimpy) on sales at Marina Tower Melbourne. It said sales there had hit about S$150m, without giving details on the number of units sold, selling prices, etc. Nevertheless, sales Down Under are much better than for its projects in Singapore.

Hi Sumer,

Thanks again for your update.
Also Hiap Hoe does have an existing stream of income from the 2 hotels and rental properties which should help with div payments when project completion are lumpy quarter to quarter.All taken into consideration,there is indeed nothing sinister about this quarter loss.
Cheers and always appreciate yr reliable analysis.

Plans for Hiap Hoe's Londsdale Street project are revealed here:

urbanmelbourne.info/planning/2014/08/11/...e-street-development

2 nice towers of 57 and 61 floors respectively.

Project will have 728 apartments and 312 hotel rooms. There will also be a 7 storey podium for the car park and retail/office space.

Hiap Hoe will then be the proud owner of 2 hotels in Melbourne and will be one of the significant Aussie exposed play listed here.

Looking forward to this development! Hopefully Hiap Hoe are more careful and can avoid town planning issues faced by other developers.

Apparently, the same architect is being used by CES for its Victoria St project as well:

urbanmelbourne.info/development/2013/12/...aser-make-their-mark

All things considered, would you give Chip Eng Seng a slight edge over HH as an investment in comparison?

Perhaps our readers should be reminded that Hiap Hoe has put up a notice, a caveat emptor, dated 17 Jul 14, informing the public that, contrary to what was presented in the Nextinsight Article entitled "Sumer: HIAP HOES's Melbourne Project 85% sold in a week" dated 16 Jul 14, is "misleading and wishes to clarify that the suggestion in the Article that the Group has sold about 85% of the units in the Group's Marina Tower Melbourne project in one week is not true."

It went on to further stressed that the views presented in the Article "...should not in any way be taken to represent the views, financial position, business plans or prospects of the Group."