Thursday, May 28, 2020

Added: HongKong Land USD (May 2020)

Bought another 4,000 shares of HongKong Land on 27 May at USD3.50
This is in additional of 10,000 shares bought on 1st Aug 2019 at USD6.10 (Link), 2,000 shares on 29 Aug 2019 at USD5.44 (Link), 2,000 shares on 21 Feb at USD5.36 (Link) & 1,500 shares on 10 Mar at USD4.65 (Link).
This bring my total holding to 19,500 shares. 

Reasons for buying:

1) SUPER OVERSOLD!!!!!!!!! Only PB 0.21

Imagine you could buy an iPhone 11 Max Pro 512GB at SGD 493.29 (RRP $2349) or Samsung S20 Ultra 512GB at SGD 398.58 (RRP $1898), instead of asking 'Would you buy?', I will be asking 'How many sets you would buy?!?!'

Why would you rush to buy a liability that you know will depreciate in value over the next few years BUT not buying an asset that you know will appreicate in value over the next few years?

2) Not too bad result (during COVID) from Interim Statement (28 Apr 2020)

Source: Interim Management Statement (28 Apr 2020)

Comparing apple to apple (HK Land Retail vs Retail industry / HK Land Commerical vs Commerical industry / HK Land Residential vs Residential industry), Hong Kong Land result look not too bad.

3) "New normal" post COVID

COVID had changed the way we work, we live, we social and etc.
Nobody will expect Work From Home (WFH) is possible pre COVID.
More company will shrink their office space, have higher % of hot desking and WFH staff over the next few years.

This is definitely bad news for Commerical building owner.

But, if we look into HongKong Land Commerical portfolio on their customer industry type, 41% are Bank & Financial + 31% are Legal industry in their Hong Kong Portfolio. These are essential industries and due to the senitivity data they access / process, only a small % of their staff will be able to continue to WFH.

As for their Singapore Commerical portfolio, 67% are Bank & Financial industry. 

I foreseeing that industry like IT Services & Consultancy, Natural Resources and Property will reduce their office space % the highest while Bank & Financial industry will reduce their office space % the minimum. 

As for their Retail portfolio, expecting further reduction in % for Fashion & Accessories and increase in % for F&B moving forward.

4) Mr Market will bring HK Land share price back to equilibrium

With enough patience, Mr Market will bring HK Land share price back to its worth.
If share price remain this low (PB 0.21), we might see new substantial shareholder (Higher chance) or privatization offer (low chance).

Related post:
1) Added: HongKong Land USD

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