OVERVIEW:
The local company started its business in optical storage media industry and listed on SGX in 1995. Following a reverse acquisition exercise in 2011, it successfully diversified into the accommodation business. As at March 2015, its portfolio consists of 14 operational accommodation assets totaling 45,662 beds. 9 of them are worker accommodation assets in Singapore and Malaysia. The rest are student accommodation assets in Australia and UK. It develops, owns and operates these dormitory assets. On 2015, it has ceased its operation in optical storage media industry.
HIGHLIGHTS:
[1] FY2015 saw full year revenue and net profit from core operation rising 24% and 14% year on year. The major contribution was due to expansion of both student and worker accommodation assets.
[2] It is in position with net liability of $50m due to partial loan maturing by Oct 2016. Management indicated sufficient cash resources and banking facilities (aggregate of $213m) to meet the financial need. Its interest coverage is 4, thus earning is enough to cope with interest expense.
[3] Net asset value per share rose to 0.54 from 0.52 year on year. Current trading price represents undemanding valuation at P/B 0.7 and P/E 8. Dividend yield is 4%. .
INVESTMENT THEMES:
[1] Looking forward, there are totally 4 worker dormitories in project pipeline in Singapore and Malaysia by 2018. One of these is WestLite Papan which is located near to Jurong Island. It shall be completed by June 2016.
[2] CSL Selegie (domestic student hostel) completed final refurbishment on Oct 2015. Its location is easy access to SMU, Lasalle Colleague, etc. Management expects healthy occupancy in 6 to 12 months.
[3] The management indicated ambition for further strategical investment thus creating more value to shareholders.
PRICE TREND:
Price has been finding support ~0.35. Due to thin trading value, price is moving side way.
*** Note: Same counter has been mentioned in Sep[3] @ 2016 ***
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