Macau Property Opportuni... Share Discussion Threads

[chorister] 01/12/2014 17:26

Stuffee - thank you. I was in a hurry and took the lazy option of asking rather than doing my own research. Your detailed answer is much appreciated. If I get 385p a share in 2016 I'll raise a glass to you!

[jbarcroftr] 01/12/2014 13:42

Thanks Stuffee completely agree

[stuffee] 01/12/2014 11:42

Chorister

I'm sorry but I can't say I agree.

With Macao's economy forecast to grow at 10.5% in 2015, the fastest in Asia, and continuing shortfalls in residential housing demand over supply, MPO's portfolio of luxury apartments looks pretty well placed, even if casino revenue flattens (MPO does not operate casinos). The opening of numerous new huge leisure resorts over next two years (Galaxy, Studio City, Sand's China, Wynn Palace etc) will all generate great demand for new employees' housing. The completion of the massive Hong Kong/ Zhuhai/ Macao bridge in 2016 will provide further big boost.

NAV was $4.97 (316p at $1.57) per management statement at 30 Sept 2014; this was after deducting a deferred tax provision of 15p, which will not be paid if SPVs holding properties are sold rather than properties directly. A liquidation vote has to be held by December 2016. With potential further upside on the Senardo retail development and MPO's history of selling assets above valuation, I feel the 385p estimated realisable value on liquidation looks sound.

Can't think of many other investments with high probability of 62% gain from current 237p over 2 1/2 years.

[chorister] 01/12/2014 10:15

It looks like Macau property may be overheating - time to take the cash off the table?

[sammu] 28/11/2014 10:32

Latter; lazy.

[ryandj2222] 28/11/2014 09:33

Does this pay a dividend or just return cash to shareholders?

[tyranosaurus] 17/11/2014 13:53

Current price only £2.30.
It`s time for the company to buyback some shares.

[888icb] 27/10/2014 16:06

Nice little tick up this pm.If you look at the graph since mid month this has moved from 220 to 250p. So only another 40p to go to reach the IC target of 290p.

[888icb] 24/9/2014 15:55

Yes looking better today as there has been time for investors to digest the excellent results. ST in the IC has a 290p target in his detailed online article yesterday which may well find its way into the magazine on Friday.

[badtime] 24/9/2014 12:14

Looking a bit better

[sammu] 23/9/2014 22:51

Yeah well if it's 15p (which looks about right) then you could take NAV as 301p - or ~313p at current exchange rates.

[badtime] 23/9/2014 13:40

Yep and it's all in the accounts

[jakecook] 23/9/2014 12:39

ST from IC article online 30 minutes ago:
"Moreover, the underlying growth was in effect even greater because Macau has reported its accounts inline with a new and very recent interpretation of international accounting standard IAS 12 with regards to a deferred tax liability. This meant that net assets of $398m (£244m) were understated by $19.6m (£12m) in the company’s accounts, equivalent to 15p a share, even though all of Macau’s asset disposals to date have been transacted through special purpose vehicles, and so avoid taxes. The company’s directors intend to continue operating in this way which means that they have adopted a very conservative stance by accounting for this 15p a share deferred tax liability."

[salvorhardin] 23/9/2014 12:37

“We need to know whether this tax will be paid
Until then this is going nowhere due to the uncertainty”

The difference in the two NAVs (IFRS 160p vs. 286p adjusted NAV) is down to the treatment of work-in-progress, not the deferred tax situation. Property company accounting is notoriously conservative when it comes to valuing work-in-progress; it basically uses cost rather than market value.

This is stated out in note 17 to the accounts as follows:

“Under IFRS, inventories are carried at the lower of cost and net realisable value. The Adjusted NAV includes the uplift of inventories to their market values.”

In any event the 286p NAV assumes that the newly interpreted deferred tax charge will arise. This is clearly stated on the first page of the results as follows:

"Adjusted NAV per share gained 30.7% to US$4.89 (286p*), taking into account a deferred tax charge which reflects a new and very recent interpretation of an international accounting standard. IFRS NAV per share rose 14.6% to US$2.74 (160p*) year-on-year."

Deferred taxes are commonly produced by unrealised capital gains which may become chargeable at some future date (because the asset is sold). In the case of property companies it is normal for the building to be owned by a separate company and when the building is sold the transaction involves the sale of this company rather than the building (which doesn’t crystallise these deferred taxes though the sale of the company sometimes creates a corporation tax charge).

[oregano] 23/9/2014 12:32

i think you are reading that wrong. if they don't pay tax the NAV is $19m higher. the £1.60 is using different accounting methods (IFRS).

still, rhetoric is a bit mixed / flat.

[tyranosaurus] 23/9/2014 12:17

A NAV of £2.86 is good but a NAV of £1.60 is bad.
We need to know whether this tax will be paid
Until then this is going nowhere due to the uncertainty.

[badtime] 22/9/2014 11:57

Re tax ...they also mentioned that they don't think it will need to be paid...see results for further info

[badtime] 22/9/2014 10:57

Results out

[sammu] 22/9/2014 10:22

They are not able to buy back in the closed period - they appointed a firm to buy back independently so the delay (possibly for the reason stated below) may have been very marginally helpful.
Results are out - go to their website. www.mpofund.com/investor_news.php
It seems to me that the results may have been delayed by a "very recent interpretation of an international accounting standard" regarding tax assumptions which reduced adjuded NAV by ~ $19m.
The exchange rate was taken at $1.70 and has since moved usefully in our favour. Some discussion about changes to regulations and market growth moderation.

[phat hair] 22/9/2014 09:49

I'm no expert (understatement) but I expect that to take advantage of delayed results by doing cheap buy-backs may not be totally kosher.

[badtime] 22/9/2014 09:38

and this slide continues

[sammu] 19/9/2014 18:05

If they want to buy back shares at a better price - how better than to break the "goldern rule".

[badtime] 19/9/2014 17:41

Ring and ask them maybe?

[mark2market] 19/9/2014 17:13

Intriguing head fake from Lazard, and disappointing that the company has failed to adhere to its own timescale for publishing annual results; why would that be?

[badtime] 19/9/2014 16:07

Lazards back down to 19%......looks as if the buyback was from them