"Lock"-ing our sights on Wheelock Properties

Orchard View @ Angullia park

Based on the pathetic average daily trading volumes of this counter, one could easily have surmised that a lot of investors (and traders) out there have probably already dismissed the potential of Wheelock properties and switched their attention to more "popular" property plays like Keppel Land and Capitaland. 


However, this counter came to our attention at Kiasu Investors (KI) while we were carrying out our routine run through of Kiasu Investing Rule #3 & Rule #4 (more on Kiasu Investing Rule #4 in a subsequent post).


While applying Kiasu Investing Rule #3, we noticed that this counter is giving out a dividend of 6 cts per share. Ex-div date is on 6 May next week (a shortened trading week due to Labour Day holiday on Monday). Based on last traded price of $1.87, this translates to a dividend yield of 3.21%. (which is much higher percentage-wise than most of the quarterly distributions of REITs listed on SGX).


Fundamentally, a lot of ex-investors were attracted to Wheelock by its large cash hoard (and some on the extremely "slim" hope that the HK parent might privatize the SG company). However, plenty of hopes were prematurely dashed with management's recent announcement of the purchase and planned development of a new residential site in Fuyang city, Hangzhou. The total development cost for the 1,900 residential units is expected to come to about S$750 million, effectively wiping out the entire cash hoard (and all this coming at a time when the Chinese government is frantically trying to clamp down on investments in its overheated property market.) It is not surprising that many investors are thus giving Wheelock a wide berth.


Nevertheless, we, being the fools that we are at Kiasu Investors, somehow managed to conjure up a rule from nowhere to convince ourselves (and hopefully not others) that this counter is really a good investment. We shall be sharing more on our imaginary rule in our subsequent posting. In the meantime, "we would strongly advise investors to exercise caution and seek professional advice before trading in shares of this company" (our standard but not-too-helpful disclaimer).

"Hot" on Hotung

Hotung Investment Holdings will be holding its AGM on 26 Apr (tomorrow). One of the resolutions to be approve by shareholders at the AGM is the declaration of a first and final dividend for the year ended 31 Dec 2010 of NT$0.47 per share. Based on last traded price of S$0.17 and exchange rate of 1 SGD to 23.4 TWD, this translates to a yield of approximately 11.8%. We note that the share price of Hotung has been pretty much range-bounded for the past weeks (after factoring the adjustment due to the change in trading currency from USD to SGD). Thus we deem S$0.17 to be a decent entry level for a bite of the "dividend" cherry that is almost certainly to be "voted for" by shareholders during the AGM. (Additional notes for Kiasu investors: previous AGM was held on 23 Apr 2010, with Book Closure date for dividend payout on 4 May 2010 - though there is no assurance that the management will stick to similar timelines if the dividend is approved this time round.)

We felt body paint is "hot" too!