Anyway, below is the summary that I got it from AGM just now:
- Sim Lian Equity grew from S$200M++ to S$800M++ in just 4 years time. I believe it is due to its good strategy to tap on uptrend of property market cycle by introducing higher profit margin projects. After UBI One is completed, the profit margin may fall to normalized rate. (FC mentioned that the industrial property project normally enjoys a higher profit margin compared to residential property project)
- Investment Properties started to be appeared in Balance Sheet, with the group's intention to generate more recurring income. In fact, the property bought in Sydney also would bring in about 6% rental yield. I believe the group played in a prudent way to ensure that the excess cash is taken good care of, although the ROI is definitely lesser than property development project
- Net Debt Ratio dropped to near to 0% level in FY2013. It may indicates that the group would think it is harder to seek a good land bank with reasonable price. In fact, they may focus on their strategy to have more recurring income projects to diversify the concentrated risk on property development project
- The reason of Joint Venture given by Top Management was to cater for huge CAPEX projects that may exceed group's capacity to do it alone. Anyway, my personal view is that it may increase ROE by pulling Assets & Liabilities out of the group's BS. Of course, I still think it is a good way to do so as it may capitalize loan to JV in BS, while still enjoying the shared profit of JV and an increased net profit margin. I foresee this may be a trend for group to park some huge projects in this JV categories
- Group CEO shared with me that the script dividend reinvestment scheme was implemented as and when the group needs the cash to support ongoing working capital. They do not have intention to privatize the group at this moment although I think they already control at least 70% stake. Personally, I think the Dividend Reinvestment Scheme was good for those who still think the group has bright future and are willing to be the long term investors.
- With 4.6c dividend payout, it implies to about 5.2% dividend yield, which I think is good. Anyway, I think Sim Lian is in the midst of increasing recurring income properties, so the coming net profit may not exceed the record result in FY2012
The land purchase at Venture Avenue is the jewel of Sim Lian. Superb prime location. Go google and check it out.
ReplyDeleteMay I ask what was your entry price? Tks
My entry price was quit high as I only discovered it after June this year (so you can guess what my entry price is). Nonetheless, with more than 70% shareholdings with management, I believe that the price fluctuation can only be done when the dividend paid out date is around the corner. Anyway, this is only my own view without any supportive fact.
DeleteHi Jack. Found your blog is very informative and useful. Can i add you in my bloglist and share link with you? thanks.
ReplyDeleteMy blog is
http://tzlcl.blogspot.com/
Ya, of course. Will add your blog link in my blog list too. Cheers.
DeleteHi Jack,
ReplyDeleteVery informative blog.I also want to add you to my blog
I have my property in thailand
Chiang mai properties
I appreciate you writing this post, I was some what familiar with this subject.
ReplyDeleteIt’s always good learning unusual concepts.
The Shine Condo
Thanks for one’s marvelous posting! I genuinely enjoyed reading it, you are a great author. I will remember to
ReplyDeletebookmark your blog and will eventually come back from now on. I want to encourage that you continue your great posts.
Mountain Front Chiang Mai
Great posting! Also it is a Great Blog.Wish you keep working.
ReplyDeletePunna Chiang Mai
eToro is the best forex broker for new and professional traders.
ReplyDelete