Construction is not the only sector which is touted to be a beneficiary of the government’s policies in 2007. Another sector is leisure and gaming.
This counter predominantly owns or has shares in leisure facilities (Sungei Wang), Hotels (Andaman, Datai, Shangri-La), as well as a power station and is 25% owned by Genting. On 29 Dec it announced its sale of Sungei Wang plaza in exchange for a stake in Bintan Treasury Bay (a private vehicle which owns land in Bintan) to capitalise in the redevelopment of Bintan in Singapore. As a result of the announcement, the price broke through its range high of 1.85 and is set to hit 2.50 on excitement of this news.
Okay so much for all the hoo-ha. Let’s look at the numbers. Landmarks scores an 8 on my company valuation test, which puts it in the similar league to pretty well run companies like Astro, so I have no problems with this counter. But what are its growth prospects? If you’re been to Bintan, you’ll know why it is generating so much excitment. This is an unspoilt beach about 1 hour away from Singapore which is set to benefit big time from expanding tourism. Since it is also owned by Genting, there are natural synergies there. And you can expect Genting casinos to plug this baby big time… BUT, in exchange for a slice of this pie, Landmarks had to dispose of Sungei Wang – its most prized asset and biggest earnings contributor. Is the exchange worth it? I’ll leave it to you to decide. At these prices you could say that it is expensive and might even be ramped, which from its history you will see that it is no stranger to. But, because it’s a good company with good prospects and I wish to trade on the breakout, I have decided to take a light position on this today. Even if this turns out to be a headfake I would be happy to sit on this counter for a while.
I will post up my own scoreboard on this company valuation later, but here’s the blurb.
UPDATE (12-01-07): Here’s the scoreboard. This baby gets a 10! And I got in (expensively at) 2.4025.
Wish me luck!
