*Official* HupSteel (SGX: H73)

tulipbubble

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Dear all,

Any one vested in Hupsteel?

Sharing my pro and con analysis, and hope to receive feedbacks:

Pro

1. Debt-free; thus immune to rising interest rate

2. At 19.5 cents, Cash, AR and inventory are substantial and forms almost the current market capitalization. The balance sheet is "clean" as Cash is liquid, bad debts has been minimal, little sign of inventory impairment. The rest of the balance sheet is "free", of which the investment properties are the interesting asset due to legacy costing and purchase.

3. Investment properties are recorded at cost/ valuation, with fair valuation gain of minimum $50m as at Jun 2014

4. If the company revalue the properties at valuation, RNAV will be easily $250m. With a market capitalization of $120+m, the PB is 0.5

5. Dividend approximately 5%

Con

1. "Family-Controlled" business with 55%

2. Steel business with low profit margin

3. Had share purchase in the past, but has since ceased since 2014. Management should use the excess cash to share repurchase so as to improve ROE, EPS, NTA/share
 

GiraffeValue

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hupsteel-chart.jpg


Mkt. Cap.: 92.517m
Total Liabilities + NCI :7,377
Cash: 44,279
Mkt Price: 0.15
P/B: 0.5
P/E: nil (negative earning for FY 15)
P/E(FY14): 34
Div Yield(FY15): 0.66%(first time div got cut)
Payout: nil negative earning for FY 15)
Adj NAV: 0.230 [MOS: 53%]
Debt to Equity: 0.002

EV/PBIT(FY15): Negative Earning (earning fluctuates quite a lot unable hence won’t be fair to use previous earning)
EV/PBIT(FY14): 17.82!
NCAV: 0.174 [mkt price trading at 13.91% below NCAV]
Graham’s NetNet(actual formula): 0.127 [mkt price trading at 18.01% ABOVE NCAV]

Another stock trading below NCAV.

I just wrote an post about it over here:

Conclusion:

There is cash burn rate for this company. But its huge hard assets make it as an attractive little monster to my portfolio.

I like that it is trading below its NCAV, theoretically even if the stock goes bust you still make money. And never forget that this does not include the freebie you got by owning the entire business[>90% consist of leasehold in PPE and Investment property]. And the best part is maybe that F/V of investment property is really $83M!

This stock has been in my watch list since April I think, I was reluctant to invest because of its really high P/E in other words, paying a lot for its earning not because the price is high but because the earnings is damn low. And the recent $0.05 drops gives me this opportunity to enter.
 
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wahkao3

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My analysis:

asset wise good, but no track record of value creation, cheap
FA weak bad

TA bad


TA and FA never say buy
dont buy
 

GiraffeValue

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You funny le you.

NCAV and NET NET I compute the data by myself, my blog got the free d.l :)

For the share price I download from YahooFin.
 

ValueInvestor

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How will it unlock value to minority shareholders?
What will be the catalyst?

Dont forget some value traps can go on for over a decade
 

GiraffeValue

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My analysis:

asset wise good, but no track record of value creation, cheap
FA weak bad

TA bad


TA and FA never say buy
dont buy

How will it unlock value to minority shareholders?
What will be the catalyst?

Dont forget some value traps can go on for over a decade

Yes, so don't buy 1 stock. Buy 30 stocks that possess the same characteristic and I think the return will be quite satisfactory.
 

JustTrade

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This stock was in my watchlist after reading some blog post on its asset holdings. So anyone else took the downturn to accumulate this into their portfolio?
 

GiraffeValue

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This stock was in my watchlist after reading some blog post on its asset holdings. So anyone else took the downturn to accumulate this into their portfolio?

I'm in. As usual, stock like this is good to buy a group of them. But not one.
 

Shion

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Hupsteel to appoint independent adviser for $1.20 per share offer; requests lifting of trading halt

Hupsteel to appoint independent adviser for $1.20 per share offer; requests lifting of trading halt

https://www.straitstimes.com/busine...dent-adviser-for-120-per-share-offer-requests

SINGAPORE - Mainboard-listed steel trader Hupsteel Limited said on Monday morning it will appoint an independent financial adviser (IFA) "in due course" with regard to the founding Lim family's voluntary conditional cash offer of $1.20 per share to delist the company.

On Monday (July 1) before the market opened, Hupsteel also requested that its trading halt be lifted. It had called for a trading halt on Friday morning.

A circular containing, among other things, the IFA's advice and the independent directors' recommendation will be sent to shareholders within 14 days from the despatch of the offer document.

The Lim family's offer price, which is final, represents a premium of 51.9 per cent over the last transacted price of $0.79 on June 27.

The offer price also represents a premium of 58.33 per cent, 58.6 per cent, 58.56 per cent and 54.32 per cent over the volume-weighted average price for the one-month, three-month, six-month and 12-month periods, respectively.

The offeror is Hercules Pte Ltd, a bid vehicle for the consortium members.

The offer is conditional upon Hercules owning, controlling or agreeing to acquire shares representing 90 per cent of the company, including valid acceptances of the buyout offer, as at the close of the offer.

Hercules has secured irrevocable undertakings from Hennfa Investments and each consortium member that holds shares directly in the company, Hupsteel said in its Friday filing. The undertakings to accept the offer amount to 54.16 per cent of Hupsteel shares.

OCBC is the financial adviser to Hercules for the offer.
 
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