| Latest Forum Topics / HongkongLand USD Last:7.45 -- |
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Rate Cuts and US QE is great for HK LAND
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valuefish
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31-Oct-2019 15:20
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HK land should trade at higher valuations compared to dairy farm simply because their Earnings will outpace dairy farm over the next 2 years. As for share buybacks, I think HK land is currently on the prowl for more acquisitions in greater bay area - See management discussion and presentation back in July for hints. Curent protest in HK is throwing out opportunities for HK land to make big ticket acquisition at good prices from weak holders. But as the FED and HKMA have eased policy recently, it may be difficult to find good quality landbank at cheap prices. It would not be unreasonable to expect another 100M share buyback at current prices
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HTHT1989
Senior |
31-Oct-2019 15:10
Yells: "Huat ah!" |
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I wanted to buy back Dairyfarm yesterday but its a little too late to go in at $6.10 now.. but HKL indeed seems to be taking a rebounce now. This is old but promising. https://www.fool.sg/2019/08/05/6-interesting-insights-from-hongkong-land-holdings-ltds-latest-earnings-call/ Hongkong Land spent around US$132 million on share repurchases in 2018. Dixon emphasised that the company continues to believe that its current share price remains attractive. With an earnings yield in excess of 7%, the group believes share repurchases represent a good way for the company to return value to shareholders. At its current price, shares also trade at a 63% discount to its tangible book value.
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valuefish
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31-Oct-2019 15:08
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this is just the beginning. HK Land management update next month will likely show that rental reversions for office leasing will still be slightly positive but retail rents should be slightly negative. The lion share of profits is mainly on the commercial office space for HK land. Again, people should look at their tenancy profile which is the key to HK land' s profitability. Many chinese mainland companies will still want to have a presence in Hong Kong due to special trade status Hong kong has with the US. Its also a great place for them to raise or move capital
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valuefish
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31-Oct-2019 14:55
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I dont understand why dairy farm is getting more interest than HK Land. Retail is currently weak in HK because of the protest but that doesnt mean the retail tenants can just move away without paying rents. Tenancy is a commitment and the landlord is king in this aspect. Most landlords will also have held on to a 1-3 months deposit from the tenants
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PQTPQK
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31-Oct-2019 14:38
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seem like his turn... | ||||
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HTHT1989
Senior |
31-Oct-2019 14:26
Yells: "Huat ah!" |
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Valuefish I' m gonna trust u on this.. need a win back from my loss in Dairyfarm | ||||
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valuefish
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31-Oct-2019 14:09
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It should go higher than $6. USD has come down by almost 300pips against the SGD over the past 3months. Keeping all factors unchanged, HK land should not drop below $5.55 and any price below that is an automatic buy | ||||
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PQTPQK
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31-Oct-2019 13:56
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agree. it will go up $6 ? | ||||
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valuefish
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31-Oct-2019 13:19
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Dairy Farm, sister company of the Jardine group, has gone up 25c this morning due to the weak USD. Dairy farm is not real estate company and would not be as sensitive to interest rate cuts compared to HK land. This goes to show that HK land is not only being undervalued but is just waiting for the market to wake up to the fact that it has solid fundamentals to drive it forward | ||||
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valuefish
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31-Oct-2019 13:13
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Congrats to those who bought in the morning. This is just the beginning. BOJ has announced no action and this will lead to a weaker USD till the next policy meeting | ||||
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valuefish
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31-Oct-2019 10:22
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One just needs to look at the Developers and landowners listed on HSI. Swire Properties, Henderson land, CK asset ect ect are all showing resilienece and price recovery. By this measure, HK land has a short term upside of at least 10% |
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valuefish
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31-Oct-2019 10:07
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Hong Kong is still a city with plenty of hot money despite the protest and many companies are still looking to list on the Hong Kong exchange despite what the naysayers say https://business.financialpost.com/pmn/business-pmn/hong-kongs-central-bank-says-no-obvious-capital-outflow-from-banking-system |
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PQTPQK
Supreme |
31-Oct-2019 09:57
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thanks | ||||
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valuefish
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31-Oct-2019 09:41
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At the rate which the USD is dropping, mr market is making a mistake by pushing down the price of HK land. It has to go up instead of going down as HK land is still a company with income producing assets similar to a reit. The fair value of HK land is easily in excess of $8USD |
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PQTPQK
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31-Oct-2019 09:40
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so can buy ? | ||||
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valuefish
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31-Oct-2019 09:28
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Fed just announced another 25bps cuts to the Fed fund rates. This in turn will lead to the HK monetary authority to follow suit and bring rates down. As a majority of HK land debts are denominated in HKD and SGD, rate cuts by HKMA and ongoing QE operations by the federal reserve will be beneficial to HK land in the form of lower interest payments. Annual report states that a change in interest rates of 1% in either direction will have an impact on the profits and loss of around $47M. As such HK land will save $30M USD annually going forward due to declines in the SIBOR and HIBOR that will influence their unhedged bank loans. |
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