Sunday, August 7, 2016

Frasers Centrepoint Limited (TQ5)

Source: LTS Scan - Weekly Bollinger band touch and rebound.
9 Steps analysis – 2.25 [C2]
Intrinsic Value (EPS) $1.78             (Cash flow) $2.46

Fundamentals (based on SGX StockFacts)
EPS 3Q16 5.27c, 3Q15 5.7c; 9M16 11.77c, 9M15 16.48c
NAV $2.19 ;  Dividend 2x 8.6; Feb 6.2c, May 2.4c
Top 2 substantial shareholders TCC Assets Limited and Thai Beverage Public Company Limited collectively own 87.62%, should they decide to delist, all they need is to secure 69,020,756 shares which cost only $105.6 million (at $1.53 per share), which is quite cheap considering PE Ratio is only 7.71.
If earning drop by say 30% (9M16/15 fell 26.5%) to EPS 15c, PE is only 10.2.

Looking at the few property stocks that have delisted in recent years, I wont be surprise if Frasers decide to do the same.

- Asset enhancement works at the Centrepoint, on schedule to complete in 3Q16.
- Northpoint City expected to complete in 2018
- Minimal lease expiry for office for remainder of FY15/16
- Frasers Tower expected to complete in 2018
- Sale of units in Australia & China while not fully sold, seem to do ok
- Capital Management seem good with various notes issued at rates lesser than CPF rates for examples; on 21 Apr 16, $250 mil.issued at 4.25%, due 2026;  on 21 Jul 16, US$200 mil.issued at 2.5% due 2021, along with capital recycled from sale of 19% interest in Compass Point, One@Changi City to Ascendas REIT...
- net D/E ratio decreased to 0.71x, more leverage space to develop further if good lands secured
- Going forward, expects a tepid growth environment

Weekly Price back at Sept 15 low, MACD-H 4th green histogram, MACD line flat, may cross above signal line in 1-2weeks;  Force index traced bullish divergence.

Daily price making upward movement, breaking above 13 & 26d EMAs;
MACD-H green & stayed above 0.
MACD-signal line uptrending after bullish crossover on 15 July 16, first recoil from EMAs over, a meaningful uptrend is in progress.
FI went above 0.

Tactical Plan
20 Jul 16 (Wed)                                 Bought @$1.53

Cut Loss:               $1.49 (out)           $1.495 [Alert, last low]
Targets                  (1) $1.58 [daily upper Bollinger band m 26wk BB average]
(2) $1.70 [resistance & weekly upper Bollinger band]

This counter was initially spotted on 20 July 16, and that was the date I went in. Waited sometimes when it dived below, until its 3Q earning was released on 5 Aug 16 (Fri). While the recent upward moves might be due to anticipation of earning news, the slight dip in earnings should not be much of concerns since earlier highlighted its PE ratio is attractive enough for me. If the uptrend continues, then the targets should be achievable in 2-3 months time.

May the trend be with me... 

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