REEF hotel number 4 is comming soon - Passikudah beach resorts Ltd

http://www.cse.lk/cmt/upload_cse_announcements/2631327053342_.pdf

Citrus Leisure bought land with 12.5 Acre in Passikudah on Nov 3 ( why they waited long time to announced to shareholders ??? )
They bought the land called "Passikudah Estates". It is the neighbor land of govenment's Passikudah project.
http://www.sltda.gov.lk/passekudah_project
http://www.sltda.lk/node/457

Look at the land called "Passikudah Estate". It is near to the block number 1. Block 1 is not available for developments. It is used as a sea buffer. What fortune for REEF.

REEF acquiring lands in all key beach locations . Galle, Kalutara, Kalpitiya, Passikudah. Their plan is to build 600 new rooms.
Still we have
Hikkaduwa -40
Waskaduwa and Kalpitiya - 300

Last year annual tourist arrival reached 850,000. January it is going to hit 100,000. Still Sri Lanka is gaining recommendations on world top sites.

Better you do analyze about the future EPS and NAV ( It is also important since they take capital gains on regular basis) and keep it under your radar

Better you add following upcoming gains to your study

Selling 20% of the CLND = currently 932Mn.
Leasing 50 villas in Kalpitiya - profit = 937Mn

http://www.ft.lk/2012/01/21/passikudah-beach-resort-buys-12-acres-for-rs-169-m/

Passikudah Beach Resort buys 12 acres for Rs. 169 m

Passikudah Beach Resort Ltd, a subsidiary of Citrus Leisure Plc announced it had purchased a land called Passikudah Estate in Passikudah, Batticaloa which was twelve acres one rood and twenty five decimal six five perches for Rs. 168.7 million.
Funds for the purchase had been advanced by Citrus Leisure Plc.

Citrus was formed with a long term objective to develop hotels and currently owns three properties: Citrus Hikkaduwa which opened recently after expansion, Citrus Waskaduwa and Citrus Kalpitiya, both 150 room luxury resorts to be completed by December 2012.
The board of directors of Citrus includes Prema Cooray, deleted Jayaweera, Varuni Amunugama Fernando, Rajindra Seneviratne and Sarva Amarasekere.
The group earned revenue of Rs. 6.27 million in the six months to September 2011 while incurring a loss of Rs. 30 million. Shares of Citrus Leisure were last traded at Rs. 44.20.

Will there be new warrants/rights issues?

WildBear wrote:Will there be new warrants/rights issues?

I don't think. They have 900 Mn from recently converted warrants.

This is a speculative stock. Investors must avoid. These citrus family are running the show on retailers money. For them it's zero cost, thanks to retail investors. You freely give them the money. For those family of people it's fortunate that they were born in a country of dumb people who would throw their savings, going after those big players shares like dogs.

So you have a piece of land. The land didn't come up free. You have to pay. Or did it come by some alternative means? You have to build the hotels. And that would take at least 3 years. Until then it's a burden to the company. You need money to build the hotels. Cement, bricks... If you build a house you know the costs go sky rocketing. So why should the share price go up when this would be a HUGE COST for at least 3 years? Are you going to get any dividends?

I read somewhere we talk about so many hotels. But in reality last year there were something like 40 rooms added to the hotel rooms count in Sri Lanka. Can't remember the number. What happens when all these hotels are built in 3 - 4 years later? Novelty will wear off. Then we'll have so much hotel projects (if they really get completed) but what about the demand then?

This is one of those speculative junk that retailer investors go after. So should go up thanks to you people.

Yes. Agree with you. All the hoteliers are fools. They must know lands, cements ,.. are not come free. Government should not promote new tourist zones and bring rules to stop building new hotels. But there are some hotelier who like to burn their money. We can't stop them from get burning. Bad luck

hasi17 wrote:

I read somewhere we talk about so many hotels. But in reality last year there were something like 40 rooms added to the hotel rooms count in Sri Lanka. Can't remember the number. What happens when all these hotels are built in 3 - 4 years later? Novelty will wear off. Then we'll have so much hotel projects (if they really get completed) but what about the demand then?

This is one of those speculative junk that retailer investors go after. So should go up thanks to you people.

Exactly, its just a speculative one now..

However, I consider these points;
Tourist arrivals are expected to grow at a higher rate than the no. of hotel rooms currently can accommodate.. since 2009 its getting higher and higher since we have no war SL is marked as a safe country with a great tourist destination.. The new infrastructure projects add fuel to the fire and making it reachable.
So with so many hotels coming in, the revenue will be dispersed and all hotels will have to share the small pieces of pie.. even the existing hotels would face fierce competition in future.. Then again its added business too..

Nevertheless, I only see a value in REEF after 3-4 years, with the room night increasing concept and the expectation of ever growing tourist arrivals.. For that if you buy REEF.W19 at a lower price, say 10-15 with the conversion price in 2015, ur cost is Rs. 55/-. But wouldn't REEF.N go pass 100 in 5 yrs is the question ????

Just my thinking

Good thinking BTW.. Another view of this which could certainly add value to my line of thinking..

P.S. I'm collecting REEF.19 and so far collected 400 of it So my views could be biased.. Its good to have a thread opened for a better judgement.. Thanks again..

Deputy minister said there were Russian tourist who couldn't find a single room in south during last week. Are we prepared ? If not we can't achieve the expected target in next year. Tourist will not come to SL because SL is going out with available rooms.

I don't think REEF will stopped at 600 rooms. Look at their balance sheet. Very Strong. Only 1.2 bn Liabilities in company balance sheet. After W17 conversion that will reduced to 250Mn. After W18 they will have 700Mn cash in hand. That's the amount they used to (150 rooms) PP of Waskaduwa beach resorts.
Then what will they do from 2.5Bn in W19 ? Will they add another 450 rooms ?

When we are talking about profits, REEF expect 3% fees from Rev and 2% of Gross profit. They expect about 50Mn annual management fees each from Kal , Was ( refer expected income statement). They will expect 250Mn from extra 600 hotel rooms + Hikkaduwa

Now we have to calculate EPS from hotel business share.

hasi17 wrote:This is a speculative stock. Investors must avoid. These citrus family are running the show on retailers money. For them it's zero cost, thanks to retail investors. You freely give them the money. For those family of people it's fortunate that they were born in a country of dumb people who would throw their savings, going after those big players shares like dogs.

So you have a piece of land. The land didn't come up free. You have to pay. Or did it come by some alternative means? You have to build the hotels. And that would take at least 3 years. Until then it's a burden to the company. You need money to build the hotels. Cement, bricks... If you build a house you know the costs go sky rocketing. So why should the share price go up when this would be a HUGE COST for at least 3 years? Are you going to get any dividends?

I read somewhere we talk about so many hotels. But in reality last year there were something like 40 rooms added to the hotel rooms count in Sri Lanka. Can't remember the number. What happens when all these hotels are built in 3 - 4 years later? Novelty will wear off. Then we'll have so much hotel projects (if they really get completed) but what about the demand then?

This is one of those speculative junk that retailer investors go after. So should go up thanks to you people.

Firstly the costs for the hotel is not a cost, its called a capital expenditure.
That does not affect the profitability of a company.

Secondly, All the businesses are trying to grab a piece of new opportunity that SL has faced with. Therefore Businesses cant be backed down just because everyone is building hotels. Important thing is to grab the opportunity without crying over that others' hotel projects

[quote="sapumal"]http://www.cse.lk/cmt/upload_cse_announcements/2631327053342_.pdf

Selling 20% of the CLND = currently 932Mn.
Leasing 50 villas in Kalpitiya - profit = 937Mn

Kindly let me know how you calculate the CLND profit of 932M.

chamith wrote:
Firstly the costs for the hotel is not a cost, its called a capital expenditure.
That does not affect the profitability of a company.

Secondly, All the businesses are trying to grab a piece of new opportunity that SL has faced with. Therefore Businesses cant be backed down just because everyone is building hotels. Important thing is to grab the opportunity without crying over that others' hotel projects

Of course hotel business is in high demand at the moment. No question. If I collect money from generous public who would gladly offer me money I would also build a hotel. But for at least the next 3 years this hotel would not rent a single room. So as a minority investor what would you get out of it. For the major share holders there is no question. They're the owners. They can do what ever they want. So you invest in this hotel. After 3 years if everything goes according to the plan and the budget (probably not) hotel will be in business. There will be profits on paper from the business. But what would the minority investors get anything? Do you think the family who owns these share care about the investors?
Other than for trading in rallies in the counter this is not a investor friendly family of shares. They're trading shares.

What i understand from your posts;

1. Minor shareholders should stay away from investing. Invest only if you can own the whole company.

2. All these are paper profits only

3. Major shareholders can take the profit from the company but small investors cant.


Can you plz tell me do u invest in any stock market ?
What are the shares you recommend?
This is very interesting,

Sorry. CLND gain might be not correct. This section was grabbed from my recent post " continues interest on W18)

hasi17 wrote:
Of course hotel business is in high demand at the moment. No question. If I collect money from generous public who would gladly offer me money I would also build a hotel. For the major share holders there is no question. They're the owners.

Who is the major share holder ? Can't you be the part of a major share holder ?
Who asked you to put money on Passikudah ?

hasi17 wrote: Other than for trading in rallies in the counter this is not a investor friendly family of shares. They're trading shares.

If you had the share when they bought it @45 still you are in big profit
your cost = 45+2*25(right) + 2*30 (W17)= 155
revenue = 18*2 (W18)+ 15*4 (W19) + 44 * 5 = 300+ (within 1 and half year)

Net Asset value of the company were @17. Now it is @30

I don't think there will be surplus of hotel rooms for next 5-10 years. Even if every one (Potential investors) started to build hotels it would be very difficult to reach the target 40 000 rooms by 2016. I think this sector has huge room to grow over next 10-15 years.

sapumal wrote:Sorry. CLND gain might be not correct. This section was grabbed from my recent post " continues interest on W18)

hasi17 wrote:
Of course hotel business is in high demand at the moment. No question. If I collect money from generous public who would gladly offer me money I would also build a hotel. For the major share holders there is no question. They're the owners.

Who is the major share holder ? Can't you be the part of a major share holder ?
Who asked you to put money on Passikudah ?

hasi17 wrote: Other than for trading in rallies in the counter this is not a investor friendly family of shares. They're trading shares.

If you had the share when they bought it @45 still you are in big profit
your cost = 45+2*25(right) + 2*30 (W17)= 155
revenue = 18*2 (W18)+ 15*4 (W19) + 44 * 5 = 300+ (within 1 and half year)

Net Asset value of the company were @17. Now it is @30

Hmm, is GREG and REEF the same company?

hasi17 wrote:Hmm, is GREG and REEF the same company?

thanks god. Now you got it right. So don't invest on GREG, Passikudah or REEF

What i feel,Your original post was to talk about REEF N not for Reef W 18.However 932 M is a significant amount when comparing with their yearly turnover 104M(10/11),6.2M for six months ended 30/09/11.

As per my calculation,Booked capital gain roughly as follows

REEF have transferred 20M shares to their subsidiary Kalpitiya Beach at 40(Original cost around 20)

Booked capital gain around 400M.

Kalpitiya having 40M shares at average cost 30=1200M

70% should go to REEF=840M

You all know CLND is a speculative & Bullshit share.Now only to play the drama.They will push the price,once they have released sep-Dec accounts & annual accounts.This is only for short term. REFF group play with Indexes & finally all investors have to suffer. Reff,CLND all should come to their fair price.For me CLND not worth 15/=

REFF EPS for 6 month negative(1.78)
Share Capital 932M.With this capital gain also they can go to 1-1.5 Eps(REff price now 44)

I dont think they can achieve EPS 1 from their real business even in next 5 years.

REFF 10/11 Revenue=104M
11/12 Six months revenue=6m

Unfortunately If CLND share falls down to 20L(High speculative share,NAPS 17+,EPS 0.10 check the accounts). They have to reverse the whole profit in coming years.still 40M shares in Reff group. Other thing is if they have sold 20M shares to outsiders( without transfer to Kalpitiya) CLND price would have fallen down drastically.No body even mad person do not buy CLND at 40.

Dont promote this share,this is a pure speculative & CRAP share.

sapumal wrote:Sorry. CLND gain might be not correct. This section was grabbed from my recent post " continues interest on W18)

hasi17 wrote:
Of course hotel business is in high demand at the moment. No question. If I collect money from generous public who would gladly offer me money I would also build a hotel. For the major share holders there is no question. They're the owners.

Who is the major share holder ? Can't you be the part of a major share holder ?
Who asked you to put money on Passikudah ?

hasi17 wrote: Other than for trading in rallies in the counter this is not a investor friendly family of shares. They're trading shares.

If you had the share when they bought it @45 still you are in big profit
your cost = 45+2*25(right) + 2*30 (W17)= 155
revenue = 18*2 (W18)+ 15*4 (W19) + 44 * 5 = 300+ (within 1 and half year)

Net Asset value of the company were @17. Now it is @30

Kalpitiya capital gain should be =(50-30*40)=800m not 1200M

70% of 800M =560M

Total impact 900+

[quote="market bull"]
REEF have transferred 20M shares to their subsidiary Kalpitiya Beach at 40(Original cost around 20)

Booked capital gain around 400M.

Kalpitiya having 40M shares at average cost 30=1200M

70% should go to REEF=840M

market bull wrote: You all know CLND is a speculative & Bullshit share.For me CLND not worth 15/=

That's for you. Did you count the legally possessed 9 Acre land to your balance sheet ? What is the price per perch of your calculation ? Shangri la paid 8.5Mn per perch.

market bull wrote: REFF EPS for 6 month negative(1.78)

Ok, don't bring that fact. Hotel was closed during last 9 months. Even I didn't bring the fact that group had recorded EPS = 7 rupee for last year. It was one time gain

market bull wrote: I dont think they can achieve EPS 1 from their real business even in next 5 years.

Did you read the top part of this conversation ??????? Did you read the Pros of Kalpitiya, Waskaduwa, PP of Hikkaduwa ????? Actually do you have any analysis about REEF ?????

Compare the balance sheet and Hikkaduwa new sub document . If you are smart , you will find 72Mn capital gain. If PP get 100% success it will record another 109Mn gain. Listing Kal they had 79Mn gain. Listing Was they had 22Mn gain. All of these profits (280Mn) are for this year. LOL

sapumal wrote:
When we are talking about profits, REEF expect 3% fees from Rev and 2% of Gross profit. They expect about 50Mn annual management fees each from Kal , Was ( refer expected income statement). They will expect 250Mn from extra 600 hotel rooms + Hikkaduwa

Hope that you are talking about their Investment property.CLND NAPS is 16.69 including that.

EPS=0.093
Current PE: 537

Do you agree with me above figures regarding to CLND.Thats what i mentioned that it should come to at least its fair level.

In which year REFF group had achieved EPS=7. Their EPS was 0.46 for 2010/11,0.05 for 09/10.What do you mean that it was one time.Please dont be a person like our well known GREG promoter.

REFF PER comparing to lat year eps=97,you are in a day dream to see the REEF PER around 200-300L
All know that who has pushed the CLND price. See what happened to EAST. How you guarantee that same thing cant be happened to speculative share like CLND.

Imagine what happened to Ceylinco group.They were very expert to transfer management fee from one company to another company.

*****PER of all speculative shares should be corrected to at least their fair level. Then only all people will be benefited.

Dont promote REEF again again without reasonable facts.REEF is a crap.

sapumal wrote:

market bull wrote: You all know CLND is a speculative & Bullshit share.For me CLND not worth 15/=

That's for you. Did you count the legally possessed 9 Acre land to your balance sheet ? What is the price per perch of your calculation ? Shangri la paid 8.5Mn per perch.

market bull wrote: REFF EPS for 6 month negative(1.78)

Ok, don't bring that fact. Hotel was closed during last 9 months. Even I didn't bring the fact that group had recorded EPS = 7 rupee for last year. It was one time gain

market bull wrote: I dont think they can achieve EPS 1 from their real business even in next 5 years.

Did you read the top part of this conversation ??????? Did you read the Pros of Kalpitiya, Waskaduwa, PP of Hikkaduwa ????? Actually do you have any analysis about REEF ?????

Compare the balance sheet and Hikkaduwa new sub document . If you are smart , you will find 72Mn capital gain. If PP get 100% success it will record another 109Mn gain. Listing Kal they had 79Mn gain. Listing Was they had 22Mn gain. All of these profits (280Mn) are for this year. LOL

sapumal wrote:
When we are talking about profits, REEF expect 3% fees from Rev and 2% of Gross profit. They expect about 50Mn annual management fees each from Kal , Was ( refer expected income statement). They will expect 250Mn from extra 600 hotel rooms + Hikkaduwa

So REEF is another GREG. Owners collecting the money from the Sri Lankan investors and building their wealth. Some people just making some money trading in the sidelines.

Market Bull,
Please read the CLND Annual report and try to figure out about a 9 acre land. That land is still on @1982 valuation.

We have discussed about REEF EPS long time ago.
http://forum.srilankaequity.com/t1561-cse-announcement-about-reef-reef-350mn-capital-gain?highlight=reef
Can you clarify me how NAV jumped from 22 to 30 during 2011 March ended quarter ?

market bull wrote:
Dont promote REEF again again without reasonable facts.REEF is a crap.

For every of my posts I have facts. Which one was missing ?
I haven't asked any one to buy REEF. If I observed anything on REEF I have posted it on forum. In which of my post I have asked to buy REEF or in which of my post I have given wrong facts ????
When facts are true it is not called as promotion. It is the reality.

You don't have any inside knowledge, but blaming others like a person who has 100% knowledge about REEF. Please don't comments without analyzing things. Income statement and balance sheet are only two sheets. You don't get 100% only referring that 2

OK. Now we can see there are two factions.

People of one faction say REEF is going to become a real good Hotel Chain in SL and will give rich dividends to the early birds.

Others say it is a crap like GREG and major shareholders are not trustworthy.

What I can say is REEF was not following good manners (we normally expect) at the initial stages of its re-formation. We had some questions about its acquisitions , warrants, unexpected decisions, deals supported by Big Big people ... etc.

At the moment I feel it is establishing its position in the leisure sector due to its aggressive actions we criticized in the past. I think we also try to reap from this new culture.
Hence for REEF, I do not take its current EPS or past performances into consideration.
As per the plans they will have 10 times of rooms than now after few years.

I think, yes, there is a big risk to take at the moment but it is worthwhile.

Hence, I am in the same group of W19 lowers, with our new co-Admin Smallville ( congrats!) , collecting W19.

I can enjoy a huge return or/and become a proud holder of shares of a top class hotel chain if succeeded. I know there is also a risk of loosing my money.
I can take that risk because I am not putting my hard earned money.
I have some money generated at CSE last 2 years by taking similar types of risks. I even sell some other shares to buy W19. Foolish ? Have to wait few more years to learn it.

P.s. -related fact-
To double our tourist arrivals per year we need just 2% of traffic shift from Far East . ( Thailand + Malaysia got 40 million arrivals 2011 while we touch 1 million)

I saw that you have started another topic for REFF group. Actually i was busy with some other works & no time to analyze the REFF Accounts. However if you were trying to evaluate my knowledge on accounts,please let me know.I will stop some work & give the priority to you.

For me REFF is a crap....

sapumal wrote:Market Bull,
Please read the CLND Annual report and try to figure out about a 9 acre land. That land is still on @1982 valuation.

We have discussed about REEF EPS long time ago.
http://forum.srilankaequity.com/t1561-cse-announcement-about-reef-reef-350mn-capital-gain?highlight=reef
Can you clarify me how NAV jumped from 22 to 30 during 2011 March ended quarter ?

market bull wrote:
Dont promote REEF again again without reasonable facts.REEF is a crap.

For every of my posts I have facts. Which one was missing ?
I haven't asked any one to buy REEF. If I observed anything on REEF I have posted it on forum. In which of my post I have asked to buy REEF or in which of my post I have given wrong facts ????
When facts are true it is not called as promotion. It is the reality.

You don't have any inside knowledge, but blaming others like a person who has 100% knowledge about REEF. Please don't comments without analyzing things. Income statement and balance sheet are only two sheets. You don't get 100% only referring that 2

market bull wrote:I saw that you have started another topic for REFF group. Actually i was busy with some other works & no time to analyze the REFF Accounts. However if you were trying to evaluate my knowledge on accounts,please let me know.I will stop some work & give the priority to you.

For me REFF is a crap....

Thanks for your kindness. I don't need your help. I have knowledge on accounts.