Category: FCL

Sell @ $1.515

Fears of Ukraine war seems to have subsided, with the news reporting Russia withdrawing most troops away from the border…

Decided to sell the balance of my holdings to free up cash for other opportunities… Thank you! "Special Situations – II"… 😀

Sell @ $1.51

Need to free up cash to buy UMS… Original target was $1.6x as their biz looks good…

Will likely sell off the rest if UMS drops further… 😀

Buy @ $1.415

Q1 results were released before mkt opened. Looks good to me, with bigger increases in Revenue & Profit coming from Australia side. Other points,

• EPS increased y-o-y from 9.45ct to 10.42ct (4.12ct based on increased share base)
• Unrecognised Revenue = $2.1Bil (Singapore) + $0.8Bil (Australia)
• NAV increased from $2.12 to $2.15, looks like increase was mainly from Investment Properties previously (see pg16)
• Some of their Debts are "hidden" as Trade Payables (to F&NT previously, but now to FCLT) – refer to pg6 of Financials

Just wondering if they'll pay out an Interim Div next Q…. 😀

From their Introductory Document dated 28 Oct 13, pg 57 on Dividend Policy,

• Dividends paid to F&N previously (using max share base 2,892,432,490 shares),
  • 9M013 : 5.2ct
  • FY2012 : 5.2ct
  • FY2011 : 6.9ct
  • FY2010 : 8ct
• 75% of Net Profit After Tax to be Recommended subject to conditions

Buy @ $1.41

Average down my previous buy. Jump-Q at 5pm matching. My 'Special Situation II' play is slowing becoming an awkward situation… hee.. 😀

Buy @ $1.425

Add back to my portfolio. xd today for 1.73ct but dropped more, -6ct. So, where're all the 'Special Situations' players and what are they doing??

I did a quick comparison with CDL & Capitaland … again. Since the last study (day of FCL listing), both prices had dropped, CDL -8.8% ; Capitalnd -5.76%. FCL is -5.94% vs $1.515 (my entry price back then) or -9.5% @ $1.575 (my exit price). It hit a high of $1.72/3… At current prices, the discount to NAV is 24% (using $1.88) or 32.8% (using $2.12).

Thus, a quick decision to buy… Itchy fingers.. If stuck then wait to see if they list Frasers Hospitality Trust and hope for it to recover by then… 😀

Sell @ $1.575

Contra off my entire tiny stake. Rather surprised at the quick turnaround in demand and it closed strongly ~10ct higher @ $1.67. At current prices, discount to NAV is ~-21.2%, which is very similar to Capitaland (NAV = $3.74 ; Price = $2.95 => Discount = -21.1%). I was thinking Capitaland looks like a better option now as it has the advantage of being listed for a longer period of time and thus better certainty. However, a quick look at ft.com on their financials shows Increasing Debts (to Grow Assets) but Decreasing EPS. Coupled with the fact that I'm not too familiar with Capitaland, I better give it a miss… unless fingers itchy for a short term punt..

Post-mortem : Looks like this Joel Greenblatt Special Situations experiment worked… too well! Go read his easy-to-read books for more info. Still, a word of caution… When SPH spun off SPH REIT, there was no similar market sell off. What's important is still the need to do a valuations of the 'child' (spun off stock) to see if it's undervalued.

That was what I was trying to do last week… scrambling to check the NAV discount / premium and comparing with the closest competitors (Capitaland & CDL). That however didn't help much as Capitaland was at a discount (-20%) while CDL was at a premium (+13.6%). The only help was FCL was at -30% discount.

Next, an equally quick study was done on the biz segments (posted the powerpoint slide previously) and altho' the residential mkt (>50%) was a dampener (govt cooling measures), the assurance was many of the projects were majority sold and there were $2Bil+ of unrecognised Revenue ie. will be recognised over the next couple of years. In addition, in the pipeline was their plan to spin off a Hospitality REIT.

So… decision was to buy…

Finally, one reason I sold quite fast is the lingering doubt I have on the NAV. I have still not found out why and how it went up from $1.88 to $2.12 in such a short time of a couple of months. Most likely, some financial engineering?? Well… as Warren Buffett said, "A Bird in Hand is Worth Two in the Bush." ie. Taking Profit means Cash in Hand …  Time to move on.. 😀

Buy @ $1.515 & $1.485

Newly listed today with shares issued as Dividend-in-Specie (DIS) to F&N shareholders (1 x F&N => 1 x F&N + 2 x FCL).

Pre-DIS indicative NAV were,

• F&N = $1.69
• FCL = $2.04
• Total = $5.77

An old CIMB report has the following Valuation figures,

• F&N = $1.90
• FCL = $1.96
• Total = $5.82

Post DIS, we see today,

• F&N = $2.47
• FCL = $1.485
• Total = $6.44

So, we see a good premium to F&N and a good discount to FCL. F&N is likely being supported by the current 12ct div (xd on 4-Feb) plus another 42ct Capital Reduction (yet to announce EGM).

Yesterday, there was also an SGX Annc which gave FCL NAV = $2.12! At today's close, we're seeing a 30% discount… I'm buying based on this quick preliminary study plus memories of past studies which I'd done and posted in VB forum last year where I also compared against CDL & CapLand.. Will have to redo my studies soon as Property Stocks are now not in favour, due to adverse impact of govt cooling measures…

Still, I imagine it's one of the Special Situations described byJoel Greenblatt… unwanted 'child' (FCL fm DIS) being thrown out by pre-existing shareholders who're only keen on the parent (F&N)… Let's watch and learn… 😀