[Reprint] property stocks just how cheap? _ mountain man peak

Original address: real Help Desk Tracking Softwareestate stocks just how cheap? author: Zhang Hua bridge today, thank you very much for inviting me to participate in the seminar. I'm only on behalf of the individual, wells fargo home equity loansand does not represent my employers. Please let me give up their conclusions and give arguments: 42 China real estate companies listed in Hong Kong stocks are cheap, but it's not as cheap as some people say it, but there are also some stock is a value trap (that is, it seem cheap but not cheap). If you can avoid the value traps, dispersing multiple real estate equities held up to 4-5, your return will be good. analysis of three methods has advantages and disadvantages of Desk Help Software Trackingthe estate shares, investors have to look at a few indicators in several ways. In addition, we should not rigid and stubborn. In addition to quantitative indicators, also depends on qualitative indicators (such as management and incentive mechanisms, location and price of the land bank, as well as project quality is good or bad). (1) NAV, method for estimating the net asset value. This approach has a long history and is also the most widely accepted. Sale items all at a reasonable price, construction costs, and taxes do an estimate. Then cash future income using a discount rate back to the present day, minus the net debt, work out the total. The number is the company's net asset value (NAV). This approach in my opinion is the most abused one. I am most NAV are too high, unrealistic, there are many reasons. First, they assume that the price is too high or too low cost (including interest and marketing). Of course, people underestimate the ability of regulators to toss about enterprise and tricks, as well as corporate research expenses is huge. Second, it is generally overestimated the management's ability to control the project's progress. $ 100 million in revenue this year and $ 100 million next year, the gold content is different. This will directly affect the NAV. Third, some plots cannot commence in the foreseeable future, because there is no demand. (2) earnings. I have been very much opposed to this approach, but recently I came to realize it goes. If a company's management is proactive, it should always have profits and cash flows, if it always tell the investor, he has 5 very valuable floor, 19 block of land to be developed, how long do you think shareholders will patiently wait for it? cash flow slow is an expression of five diseases: management is either idle or incompetent, or no power, or excellent but made a few decisions errors or out of the big problems. Earnings forcing management to keep fueling on the freeway. (3) the price to book value ratio. Stock price per share divided by the company's book value. The problem is that some companies had a lot of adjusted book value (property reassessment), while others did not, or the extent of revaluation is different. Some assessors and was very generous, somewhat more conservative. Some real estate company rental property, assess very frequently, some companies and vice versa. Land and projects cannot be reassessed, which affect the cross-comparisons between companies. price to book value ratio of the biggest flaw is that it can only reflect static, does not show the dynamic. This remark how stresses? Today's high or low price to book value ratio can only reflect real estate companies, but does not show it next to the high or low. If this company has been sitting in the next 5 years that some Sun on the ground, the stock of five years from now it will be cheaper. In addition, we do not assume that land prices to rise forever, by tax and administrative means and do not think that the Government does not change the rules of the game. If a company has been doing nothing, its land value and the value property with the minority shareholders have any relations? Compare NAV and price/earnings ratios can grasp the dynamics. we also want to consider one very important thing. Money fast turnaround of the company always in a State of war, internal systems running order, employee diligence and trained, a large amount of land and houses all in a State of being sold and to be put up, such a company is better at a leisurely pace in risk control company. We often hear a real estate companies of the boss says, the most recent cash-strapped, you want to think twice about borrowing money, or if you want to profit warnings, or if you want to change their business strategy, or if you want to sell their favourite office building due to sales of a large project preparation May open, the result situation suddenly changed (for example, bank interest rates, Government policy has changed, real estate near discounted, near the highway, or continuous rain in the heaven, and so on). You know it's not a good company. They have such an excuse for today, tomorrow there will be a excuse you completely unexpected. In my opinion, the best defense is offense, high speed cash flow is the best risk prevention. in addition, I would like to mention two interesting ideas: first investment properties inside the valuation of real estate companies to be greatly reduced, and second, all development real estate company should have a great Haircut. we often see some serious lower than they have in the market value of the property company values of some office building or shopping center. In addition to their liability at the project level, they have a lot of business area with very low rent long-term leased to large customers (Wal-Mart or Microsoft), so rental yields a problem in the future. Some properties do not have such a hidden flaws, but rent rate is not high. Under normal circumstances, the book value of these properties (revaluation of the value) only comfort, other people will not use the buy it (of course, other than the State-owned enterprises in addition to a small number of irrational). You might say, property in the future can be appreciated! However, it may also be devalued. But a lot of property is not actually sell: first, have to pay exorbitant land appreciation tax and sales tax, corporate income tax. Hong Kong-listed companies, dividends remitted 5% of withholding tax. Therefore, these properties look good, smell the fragrant, but not good. Of course, their NAV to any discounts. we take a look at the development of real estate companies, and people the NAV is calculated, assumes all of the area will be sold, but the public area(Club, garage, etc) not to sell, in addition, if 20% of the House is sold out (floors, design or quality problems or lack of demand), and the real estate company, net profit margin is 20% (this number is not low), all profits of the company is not in stock! It is hardly surprising that they are always short of money. had finished their backs, say good words. I think most Chinese real estate company stocks are cheap now, fully reflects the told me a few risks. Many real estate companies of the medium's growth is also very good. If the next 4-5 years, this industry is still in the stock market is so light, that is, the valuation discount is still so much, while their profits (or NAV) may more than double, then the payoff is pretty good. Of course, the stock market climate improved is your profit. How to select the investment object? I suggest that you particularly concerned about cash flow, sales growth of the company. In my humble opinion dozens of midsize companies comply with this standard. The next few years, this section is likely to outperform the other sector real estate company "value trap" tale of two stories below are from my little excerpt in the book the awakening of a securities analyst, for reference. In 2001, a cosmetics company listed in Hong Kong. Of course, regardless of the IPO pricing, also is a sign of future, depending on the company's profits (and cash-flow), and what is fixed assets or property of the company there is no significant relationship (of course, the rental income deductions that a little). But the President did not understand this truth, in order for the asset value of the initial listing, look good, he will put $ 1 billion worth of office building in listed companies. It is clear that his investment bank did not clarify this with him, or he refuses to make sense of. on sale a year later, when he understands that when the stock market secrets, he asked me if he could take out of the Office building that listed companies. I told him, certainly, but considerable trouble: this is a related transaction, listed companies must engage an independent financial advisers, valuation, report it to the small shareholder approval, and he had to come up with real money to buy back the assets of listed companies. Therefore, in the Office building in listed companies, in fact, is almost the precipitation of the asset, in listing the entire valuation of the company is zero, which is free of charge. Have the assets, almost without affecting the stock price or valuation. Some investors or fund managers will say, look, this stock well cheap, its market value is lower than the value of the building, but its cosmetic service is free of charge. They were just engaged in reverse: cosmetic business have a proper valuation of capital markets, but the building is free of charge. ����һ�����¡� Korea has a listing of department store has a large number of attractive properties (mostly 30 years ago or 20 years ago with a very low price purchases). Valuation of shares in the company is, of course, there is a price-earnings ratio (approximately 13 times times) or enterprise value divided by a multiple of cash flow, enterprisevalue/EBITDA, about 7-9 times. Although its price/book value ratio is low, but most people do not attach too much importance to this indicator, because it was considered property revaluation of too much moisture, does not make too much sense. In addition, if your long held these properties, nor sold, for the minority shareholders are concerned, its practical significance is rental income. Self-used property is leased to yourself, or you can calculate the rate of return. If the low rate of return, if the company's total profit in recent years without significant growth, prospects for the future, it would be a situation may arise, the company's valuation is likely less than the property disposed of net income. Or the value of the property it totally forgotten by the market. It seems very unfair, but examples of this abound. minority shareholders it is natural to ask, your property is worth, tell me what is coherence? recently, a Fund Manager since this Korea company, complaining about the stock analyst level is too low. "Big Bank is responsible for examining the stock analysts do not even know the Department store owned large tracts of valuable property, including those of department stores and shopping centers". I comforted her, "your complaints are a little bit of truth, however, the analysts know do not know the Department store holding the property, for him to analyze and assess the impact of not much. This company with a very low rent to rent to own property, which has been transformed into his own shopping centre, Maori, property did not want to change it now, and dividends, and repeatedly stressed that the company and the family "and the human eye" shareholders why keeps you playing it? in my eyes, this Korea company was a typical "value trap". in the United States, that companies less because there family companies less and less, and specialization (outsiders) management companies must as far as possible, the value of the shares dispersed excavated. How to dig? is simple: quick realisation property, increased dividends, to borrow for business to increase return on net assets. This has become a standard action, therefore, once the company's business to go West (sunset, or strong cash flow growth limited), the market immediately understand how management would probably do. (All opinions only on behalf of the individual, not representing my employer)