Monday, January 23, 2017

Bukit Sembawang Estates Ltd - Sitting On Unrealised Gold

Readers of my blog will know that I am a huge supporter of this counter, Bukit Sembawang Estates Ltd.

Fundamentally it still stand as one of the best property counter in my view - loaded with cash that can at least cover the dividend for another 3 years and having development properties without any debt.

Recently, I had a discussion with a reader on this company. He is an accountant and were asking me some questions on its financials. I was able to answer some, while others requires a lot of digging.

Nevertheless, he came to a conclusion that the "Development Properties" stated on the Current Asset were at "cost". I double checked on the 2016 annual report and found this to be true. This meant that I am "sitting on unrealised gold" by having this counter as part of my portfolio.

A screenshot of the Current Asset in its latest Quarterly Financials
A screenshot of the Development Properties in its 2016 Annual Report.

Then, one day, while googling I came across this map and I was like, "Isn't this Luxus Hill's development area?"
A map from Streetdirectory.com

I checked Google Earth and the same picture came up:

The open spaces sure look big and imagine the number of landed properties that can be fitted into these spaces!

These spaces are currently owned by Bukit Sembawang Estates Ltd and it will be eventually developed into 99 years leasehold landed properties.

Do note that these open spaces should not be subjected to QC charges.

Anyway before you engage into fast gear and start buying this counter, the risk in buying this counter are still significant. I believe their other developments are still slow moving and they had paid additional charges before. There could be other charges that they need to pay in future, which could potentially reduce the dividend amount.

Therefore, remember to do your own due diligence before buying!

Current Price: $4.550 as of 23 Jan 2016.

Please do your own due diligence before you invest in this stock.

Do note the author is vested in this stock/company. 

Oh... and do remember, please like our Facebook page (T.U.B Investing) and follow me on InvestingNote.

2 comments:

  1. Haha, trying going to amk ave 5 and you will see it is huge.

    Anyway it has shot up to 4.8+ recently.

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    Replies
    1. Hi Blanc Fable,

      Thank you for commenting again.

      Yup, its huge!

      Not sure about the recent drive up in prices. Most probably via BBs. I read somewhere it was previously a fund favorite.

      Regards,
      TUB

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