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Sri Lanka Equity Forum » Stock Market Talk » Expert Chamber » Analysis of REEF in depth

Analysis of REEF in depth

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41Analysis of REEF in depth - Page 3 Empty Re: Analysis of REEF in depth on Thu Jan 26, 2012 9:44 pm

smallville


Associate Director - Equity Analytics
Associate Director - Equity Analytics
@seyon wrote: However i am also bullish on warrants 19 after smallville notice. But i am waiting till the next warrant conversion.

Frankly, I've to give credit to Chinwi for pointing me in this direction.. I was quite happy about VONE as a long trm hold and was trying to find out the info on it then a discussion with Chinwi changed my attention to REEF19.. Both were at the same range those days and I wanted to wait to buy it ard 10-15 range.. Wink
So still this has not come to my price but 13-14 is also ok for me.. But I've not started buying this apart from the 400 share I hold Wink he hee..

I still believe in a second chance to buy low..

Even if we put aside the fundamental and forecasted valuations, I think its a fair assumption that REEF can trade above 100 in 2-3 years time.. So with a conversion price of 40 for REEF19, its an easy 20% gain in 2-3 years.. Even sometimes REEF19 without converting can give u a 20% gain cuz REEF is a speculative share and there are ppl beind this to drag this to next level..

42Analysis of REEF in depth - Page 3 Empty Re: Analysis of REEF in depth on Thu Jan 26, 2012 11:59 pm

seyon


Assistant Vice President - Equity Analytics
Assistant Vice President - Equity Analytics
@smallville wrote:
@seyon wrote: However i am also bullish on warrants 19 after smallville notice. But i am waiting till the next warrant conversion.

Frankly, I've to give credit to Chinwi for pointing me in this direction.. I was quite happy about VONE as a long trm hold and was trying to find out the info on it then a discussion with Chinwi changed my attention to REEF19.. Both were at the same range those days and I wanted to wait to buy it ard 10-15 range.. Wink
So still this has not come to my price but 13-14 is also ok for me.. But I've not started buying this apart from the 400 share I hold Wink he hee..

I still believe in a second chance to buy low..

Even if we put aside the fundamental and forecasted valuations, I think its a fair assumption that REEF can trade above 100 in 2-3 years time.. So with a conversion price of 40 for REEF19, its an easy 20% gain in 2-3 years.. Even sometimes REEF19 without converting can give u a 20% gain cuz REEF is a speculative share and there are ppl beind this to drag this to next level..

Ok Small.. Thanks to Chinwi and you. I am also waiting till next warrant conversion. The way mkt goes, We may be able to buy less than Rs.10.. I am waiting the days to come

20% gain in 2-3 years ????? I can't understand the calculation. Pls explain..

43Analysis of REEF in depth - Page 3 Empty Re: Analysis of REEF in depth on Fri Jan 27, 2012 8:16 am

Chinwi


Associate Director - Equity Analytics
Associate Director - Equity Analytics
@seyon wrote:

Ok Small.. Thanks to Chinwi and you. I am also waiting till next warrant conversion. The way mkt goes, We may be able to buy less than Rs.10.. I am waiting the days to come

20% gain in 2-3 years ????? I can't understand the calculation. Pls explain..

Seyon,
I think it is a typo. ( or may be 200%)
Say you bought REEFw19 @ 15
If Reef N trade @ 100 in 2015
then REEFw19 = 100 - 40
= 60
your gain 60 - 15 = 45
45/15 = 3
= 300% ( without considering inflation)
= 200 % - 400 % possible

44Analysis of REEF in depth - Page 3 Empty Re: Analysis of REEF in depth on Fri Jan 27, 2012 8:22 am

Chinwi


Associate Director - Equity Analytics
Associate Director - Equity Analytics
+ contd-

if REEF N trade @ say 50 in 2015 (due to any unexpected reason)
Then REEF w19 = 50 - 40 = 10

(your cost = 15 + 40 = 55)
= LOSS

45Analysis of REEF in depth - Page 3 Empty Re: Analysis of REEF in depth on Fri Jan 27, 2012 8:41 am

seyon


Assistant Vice President - Equity Analytics
Assistant Vice President - Equity Analytics
@Chinwi wrote:+ contd-

if REEF N trade @ say 50 in 2015 (due to any unexpected reason)
Then REEF w19 = 50 - 40 = 10

(your cost = 15 + 40 = 55)
= LOSS

Thanks Chinwi. I don't think. At present Investor paying Rs.40 for the intial stage, If they built up within target time and start their operation, that would enhance the value of the share certainly. Anyway we will wait and see.

46Analysis of REEF in depth - Page 3 Empty Re: Analysis of REEF in depth on Fri Jan 27, 2012 8:45 am

Chinwi

Chinwi
Associate Director - Equity Analytics
Associate Director - Equity Analytics
@seyon wrote:
@Chinwi wrote:+ contd-

if REEF N trade @ say 50 in 2015 (due to any unexpected reason)
Then REEF w19 = 50 - 40 = 10

(your cost = 15 + 40 = 55)
= LOSS

Thanks Chinwi. I don't think. At present Investor paying Rs.40 for the intial stage, If they built up within target time and start their operation, that would enhance the value of the share certainly. Anyway we will wait and see.

Me too. I put that to balance my 400% forecast :-)

47Analysis of REEF in depth - Page 3 Empty Re: Analysis of REEF in depth on Sun Jan 29, 2012 6:40 pm

mark

mark
Expert
Expert
there was a continuous huge dumping in REEF W18 in last days(by putting undisclosed sell orders),the exercise price of warrant is 30rs and due in this year.....
current mkt price of REEF N is 40Rs..hmmmmm

48Analysis of REEF in depth - Page 3 Empty Re: Analysis of REEF in depth on Sun Jan 29, 2012 9:26 pm

DK


Manager - Equity Analytics
Manager - Equity Analytics
Chinwi, about that calculation, you havent accounted for dilution of share price due to rights conversion right?

49Analysis of REEF in depth - Page 3 Empty Re: Analysis of REEF in depth on Mon Jan 30, 2012 11:22 am

Chinwi

Chinwi
Associate Director - Equity Analytics
Associate Director - Equity Analytics
@DK wrote:Chinwi, about that calculation, you havent accounted for dilution of share price due to rights conversion right?

I have considered it DK, but not in the usual direct way.

Actually it was some what a layman's calculation, not just considering all these ratios, present number of shares or number after the dilution in 2012 and 2015.

It is because of the nature of this Company.
For this I referred their proposed hotel projects, their location, projected room numbers and possible revenue, their cash flow plan and given EPS and the value of the company as a whole and possible NAVPS, EPS after 2015. (EPS considered by me inclusive of dilution is much lower than what they say in their plans)
In addition I have to think about future demand for the share from big funds and foreign investors and the backing they get from the Government. Rising of asset value due to the infrastructure development by the Govt. is also considered.

This REEF is high risk high return/loss entity. It may go either way. If they developed as planned I thing it will generate high interest from international funds.

I have no interest in W18 . There will be a selling pressure for it in coming month . The real game will be after they close W18 episode. For next 3 years they have no warrants. That is the period for build and inauguration of the new hotels. During that period anything could happen.
IF they introduce some other dilution in between, we will have to think again. But, according to their project and cash flow plans they have not suggested any rights or warrants for that period. Capital infusion of 1.8 billion by the way of bank loans is there.

50Analysis of REEF in depth - Page 3 Empty Re: Analysis of REEF in depth on Mon Jan 30, 2012 2:02 pm

smallville

smallville
Associate Director - Equity Analytics
Associate Director - Equity Analytics
@seyon wrote:

Ok Small.. Thanks to Chinwi and you. I am also waiting till next warrant conversion. The way mkt goes, We may be able to buy less than Rs.10.. I am waiting the days to come

20% gain in 2-3 years ????? I can't understand the calculation. Pls explain..


OOPS... my bad.. its a TYPO... extremely sorry, who wud wait 2-3 years to get a 20%? he hee..

The min should be 200% with the calculated risk.. Chinwi had explained it in a very simple way os I dont have to waste time.. Smile

Also Chinwi has been prudent enuf to show the vice versa as well.. But what I think is; if REEF trades at 50 in 2015, it could be after a sub div or another right issue..

Rights are not gonna be treated good however..

51Analysis of REEF in depth - Page 3 Empty Re: Analysis of REEF in depth on Mon Jan 30, 2012 2:20 pm

greedy

greedy
Manager - Equity Analytics
Manager - Equity Analytics
@smallville wrote:On another thread Antonym mentioned the current PE of our market is still relatively too much compared with other developed markets while its cheaper than rest of the world..

http://mobile.bloomberg.com/apps/quote?ticker=CSEALL%3AIND

Then it has room for another crash may be to 5000 before coming up.. Who knows even all these can be manipulated know?


One of the few things that we need to consider when we do comparisons of P/E between different stock markets is that inflation and Interest Rates. Many including me made that mistake in comparing P/E ratios of stock markets ignoring interest rates and inflation.

Same applies when we do comparisons of Current P/E ratios with the past... due consideration to be given for inflation and interest rates.

52Analysis of REEF in depth - Page 3 Empty Re: Analysis of REEF in depth on Mon Jan 30, 2012 4:29 pm

smallville

smallville
Associate Director - Equity Analytics
Associate Director - Equity Analytics
Correct Greedy,

Inflation rate refers to a general rise in prices measured against a standard level of purchasing power. The inflation rate in Sri Lanka was last reported at 6.9 percent in November of 2011 and then dropped to 4.9% in Decemner 2011 according to CB.the interest rates are getting higher now in most private banks..

Ppl may not come to stock markets if the FD and bond rates stay above 15% cus those are guaranteed..

Found the following in http://www.tradingeconomics.com/ & indexmundi.com;

Analysis of REEF in depth - Page 3 Sl_inf10

Analysis of REEF in depth - Page 3 World_10

Analysis of REEF in depth - Page 3 World_11

53Analysis of REEF in depth - Page 3 Empty Re: Analysis of REEF in depth on Mon Jan 30, 2012 11:20 pm

seyon


Assistant Vice President - Equity Analytics
Assistant Vice President - Equity Analytics
@smallville wrote:
@seyon wrote:

Ok Small.. Thanks to Chinwi and you. I am also waiting till next warrant conversion. The way mkt goes, We may be able to buy less than Rs.10.. I am waiting the days to come

20% gain in 2-3 years ????? I can't understand the calculation. Pls explain..


OOPS... my bad.. its a TYPO... extremely sorry, who wud wait 2-3 years to get a 20%? he hee..

The min should be 200% with the calculated risk.. Chinwi had explained it in a very simple way os I dont have to waste time.. Smile

Also Chinwi has been prudent enuf to show the vice versa as well.. But what I think is; if REEF trades at 50 in 2015, it could be after a sub div or another right issue..

Rights are not gonna be treated good however..

Ok small.

54Analysis of REEF in depth - Page 3 Empty Re: Analysis of REEF in depth on Tue Jan 31, 2012 12:59 am

manula


Vice President - Equity Analytics
Vice President - Equity Analytics
@greedy wrote:[
One of the few things that we need to consider when we do comparisons of P/E between different stock markets is that inflation and Interest Rates. Many including me made that mistake in comparing P/E ratios of stock markets ignoring interest rates and inflation.

Same applies when we do comparisons of Current P/E ratios with the past... due consideration to be given for inflation and interest rates.

@greedy ...good point..it is correct but this will affect the all the fundmental shares buying for a long term. We have to follow the inerest rats, inflation etc.. not only the company growth..

55Analysis of REEF in depth - Page 3 Empty Re: Analysis of REEF in depth on Sun Jul 27, 2014 10:46 pm

WildBear


Assistant Vice President - Equity Analytics
Assistant Vice President - Equity Analytics
time to look back at REEF group with bullish signals on Leisure sector and positive news all areound.

I guess REEF.N or REEF.W19 still didin't get any momentum during current utrend.

Worth looking at last quarter financials of REEF and REEF warrants.

What you guys think, will
REEF group reach above expectations in coming months ?

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