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OUE

Trading halted.... seow liao....

noslen      ( Date: 13-Aug-2019 23:03) Posted: Results are out.... unimpressive results and dividend of 1ct. No news on US bank tower sales or divestment of OUE downtown.... let's see how it goes from here.

 

Results are out.... unimpressive results and dividend of 1ct. No news on US bank tower sales or divestment of OUE downtown.... let's see how it goes from here.

 

Catalyst can be both positive or negative, increase in dividend and sheer difference in revenue or profit. Property counters' result not doing too well these days.

 

We should know the result today but i feel there may not be anything special to update shareholders. The catalysts you have brought up are not new and i am just curious what is stopping institutional investors from buying it? Something they know that we don't.... May cut loss and letting it go soon.

 

Oue' s dividend for 3 of the last 4 years is at least 5ct yearly. At 1.50, the yield is 3.33%. This is much better than SSB' s 1.65%. It has no problem to pay 5ct. this year with 15ct eps fr. M.Mandarin.
It should ' ve no problem to pay the same for the next 2 to 3 years if it paces the divestment of the US ppty, the other half of Oue Downt. & the 12 Jap. nursing homes. With interest rate falling,
even if the sh. price goes up to 1.80 with the yield falling to 2.8%, I think the yield is still attractive.     wyeo. 
 

 

Oue' s result sh. be out very soon. All its subsid. & associ. ' ve reported. I don' t think its report ' ll be after the 14Aug. voting on the merger of its two reits. Meanwhile, the US$ has strengthened to $1.3825,
favouring its US ppty' s sale by fall. The 12 Japanese nursing facilities worth abt. $300m have stabilised. Its occupancy has gone up to 85%. This sh. be ripe for divesting wh. you can' t do unless its income
has stabilised if you don' t want MAS or SGX to run after you. The latter is tightening on its oversight including whistle-blowing.     wyeo.

 

Of course, it is fundamentally sound as I' ve pointed out that 80% of its total assets are in prime ppties & lands in S' pore with 10% in US. My meaning of ' crash' is that after its exd, its share goes
down to a yield that' s comparable to blue-chip like CDL. But it has more, its 3.6 catalysts are playing itself out -- M. Mandarin is alreadya done deal. I' m betting that if Oue pays 50% of its dividend
wh. on record it usually does so after selling or divesting, its yield for ' 19 will be 6.9% : 10.5c(including 3c normal dividend) divided by 1.51. Its nav will still be 4.3+ after discounting this 10.5c. But if
we cannot trust our professional valuers like Cushman, Colliers or Savills wh do the valuations, then SGX & MAS are sleeping. And I' ve to call it a day!     wyeo.

 

If that' s the case, then it is fundamentally not sound?

ytthong1951      ( Date: 06-Aug-2019 09:32) Posted: It is not they ' ve taken a while to sell the US ppty. If they ' ve completed this & the M.Mandarin sales, both in this Q2, the profit ' ll be 375 + 135 = $510m. This is what I mean by their lumpy profits, whereas their normal qly profits are quite predictable when there aren' t any such sales, only a few millions. If this were to happen, their share would crash when there isn' t any such sales. wyeo.

 

It is not they ' ve taken a while to sell the US ppty. If they ' ve completed this & the M.Mandarin sales, both in this Q2, the profit ' ll be 375 + 135 = $510m. This is what I mean by their lumpy profits,
whereas their normal qly profits are quite predictable when there aren' t any such sales, only a few millions. If this were to happen, their share would crash when there isn' t any such sales. wyeo.

 

Intended to remove only one of the double same posts: my mistake. Reproduce the same again.' 50% special dividend of M.Mandarin 7.5c. US Bank Tower, purchase price inJun13: $459.3m.
CBRE' s valuation published in SGX on 12 april' 19:US$650m x 1.36 = $884m. AEI:$50m(Deutsch Bk.)  Profit:$375m divided by 902m shares = 41.5c. Deutsch says Oue ' ll distribute abt. 50% as 
special dividend: 18c. Ocbc' s abt. 50% is 19c.  Oue is staggering the sale of its prized ppties to even out the lumpy profits. And it is not just these two.'     wyeo
 

 

Taken a while now to try to sell the US bank tower...

ytthong1951      ( Date: 05-Aug-2019 09:41) Posted: --- Post Removed by User ---

 

If you buy CDL, the proxy of ppty stocks at curr. price 9.87 & we take the higher dividend of 20ct, the yield is 2.02%. If we take Oue at curr. price of 1.51 & the lower or normal dividend of
3ct, the yield is 1.98%. The difference is very little. The first is  blue-chip, the latter is not, but as I ' ve argued below it' s just as safe abt. 80% of its total assets are prime ppties & land in S' pore
& US, ignoring the rest as a safety margin. But I bet on Oue because there' s a good chance of a special dividend of 7.5c, bringing the total to 10.5c. That' s a yield of 6.9% at 1.51.   wyeo.

 

My strong conviction of what I' m in comes from its latest nav of 4.43 or 4.37 last audited. 72% of its total assets comes fr. S' pore & 10% fr. US(pg. 34-35 last audited.) After the sale of M.Mandarin & if they pay 8.5c dividends, the total percentage is still ar. 80% (4.43 - 8.5 = 4.34). If you ' ve no confidence in prime S' pore ppties & land & the same in gateway cities like L.Angeles, KL, Jakarta, Chengdu &
Wuxi, sell. If you believe as I do, then ........ .     wyeo.

 

Experience has proven that if the fall is sufficient, you ' ve to take a position. A delay, a little more of the same causes one to miss the averaging down. To do this right, you need to ' ve a 
very strong conviction of what you' re in. If there' s no conviction or little conviction, one will dilly-dally, causing want to miss a good averaging down. You need to decide when to go in, grit
your teeth when the time comes to make the buy. This is the hard part when the stock is falling & falling. I believe one needs a change of mind of set to do this. It is difficult or very difficult
but you need to do your homework & rework on it again & again before the strong conviction can come.   Good luck !       wyeo.

 

Selling pressure now... shall continue to monitor if it's still worth going in for more... the first half results will provide a better picture of what's to come.

 

Nobody, I bet sells a ppty without paying itself substantial %age of its profit when it holds 68% of the co. This what they & us wait for & their record says so. Deutsch says if they sell their US ppty
ar. their valuation, they will pay 50% of the profit as special dividend. This' ll be 18ct while Ocbc says that ' ll be 19c. If we use the same %age, the special dividend for M. Mandarin ' ll be 7.5c. this
coming 2q.  wyeo
 

 

I' m confident there' s no such loss of $177m. What you' re talking is about some withdrawal from the fund. Such a huge sum would appear in its qly report or audited, but I' ve not
come across such.  wyeo.

 

The divestment of Nuvest 33% stake at 1m is insignificant. But the 200m that they park with Nuvest shrunk in value in every reporting is alarming if it is not redeemed. From 200m to 12.8m, did they redeem the 177m or loss, that for me is huge, almost half of Marina Mandarin sales 😅 😅

 

Off-hand, I can sayNuvest Capital is a low-risk fund associated with GIC for cos. to park their cash wh. they could withdraw within a month' s notice when they need it. There' s a minimum you ' ve
to put, something like $200-$300m or thereabout. From what I remember, the loss or gain is rather insignificant, so I did not pay much attention to it as compared to say the recent divestment of
part of Oue Downt. where the profit comes to hundreds of millions. You just take the sale of Marina Mandarin for $390m. Their eps as reported in SGX is 15cts. You multiply this by 902m shs., it
comes to $135m profit. Their profit is very lumpy as with many ppty cos. That' s why it is selling at a big discount to its nav of $4.37. If it does not pay good special dividend, I guess you must be
prepared to hang on until it is taken private or wait for the next ppty upswing, subsisting on its normal yield wh. is slightly more or about that of fd or ssb. But, I' m betting that it will give good special
dividend as its parent needs the money to fund L.Karawaci.   wyeo.

 

Thanks Wyeo for taking the time to clarify with OUE. I think the Gemdale Properties investment is quite clear.

But there's one of their investment that i couldn't find any information on and perhaps you have read it somewhere.

I read they have sold the stake in Nuvest Capital for 1m and that is quite clear that there's no profit or loss in this deal. But i remember they also parked 200m with Nuvest Capital and i don't seem to find any information or announcement that they have redeemed them.

The only information i found is from what i read from the Edge -

OUE announced it had sold its 33% stake in Nuvest Capital for US$1 million ($1.36 million). But in 2014, OUE invested US$200 million in Nuvest Real Return Fund which is managed by Nuvest Capital.
Last Nov, OUE?s executive chairman had told analysts that the company plans to redeem the fund soon as it had not been profitable. In its FY2014 annual report, OUE's investment in the Nuvest Real Return Fund was valued at $268.9 million. The mutual fund was revalued at $168.7 million in FY2017, and at just $12.4 million in FY2018?s annual report. It is unclear if OUE had redeemed some of the fund or if the mutual fund is open-ended in which case it is subjected to inflows and outflows.

So this is interesting to me, how much was the loss in this investment or where was the money reinvested into?

Anyway, i am vested too so just thinking out loud and maybe you will know better.