RENU results Mar 2011

Quarter EPS 4.11
12 Month EPS 28.70

* YoY Gross profit ( from core business) is up 120%
* YoY Net profit down by 53% . Reason is other income is down

Remember RENU has its hotel core business and maintain a good portfolio as investment. During the period Hotel refurbishment was done and now its back on track. Admirably the costs involved seemed to be borne by the company itself. Improvement in earnign from core business from last quarter can be seen . Cash t balance is still positve for RENU.

http://www.cse.lk/cmt/upload_report_file/569_1305544174.pdf

slstock wrote:Quarter EPS 4.11
12 Month EPS 28.70

* YoY Gross profit ( from core business) is up 120%
* YoY Net profit down by 53% . Reason is other income is down



Remember RENU has its hotel core business and maintain a good portfolio as investment. During the period Hotel refurbishment was done and now its back on track. Admirably the costs involved seemed to be borne by the company itself. Improvement in earnign from core business from last quarter can be seen . Cash t balance is still positve for RENU.

http://www.cse.lk/cmt/upload_report_file/569_1305544174.pdf

Very Impressive results.......

Related discussion..
http://forum.srilankaequity.com/t3190-renu-a-detailed-analysis-value-stock

It is great to see RENU starting to show growth in thier earnings from the core business. According to my knowledge, the hotel is now fully operation after the refurbishment. We can expect RENU to produce much better results in the coming quaters from thier core business which is hotel operation.

Not to mention about RENU's huge investment portfolio. This is currently reflected in the balance sheet at the cost. If you revalue this portfolio it will depict a huge growth for sure.

Also RENU has a big investment in DFCC shares. In fact RENU has something like 7 million DFCC shares in their portfolio as per last annual report. (This is after adjustment for 1:1 bonus issue). This number of DFCC shares is same as RENU's issued share volume. DFCC declared lucratative dividends (7+3) recently. This means the dividends from DFCC alone will account for RS 10 for RENU's future EPS.

This has all ingredients to be next ALLI in my opinion. Do your own analysis and decide.

They resumed the hotels normal operations at the end of February ! So the results are really impressive! I was skeptical to buy the share before this quarter results out because of this but seems it was a good idea that I atleast bought those 100 shares!

Positives:
1. Revenue from Hotel operations has overtaken Other Income this quarter; therefore, RENU deserves to be rerated based on PE ratio applicable to the hotel sector.
2. After the refurbishment, GP margin has increased Q on Q from 60% to 93%! This also augurs well for the future.
3. There has been a YoY reduction in Finance Cost by Rs 4.6 million.

Concerns:
There is a YoY increase in Administrative Expenses by Rs 13.3 million - Is that largely due to the higher service levels expected of the renovated hotel?

Observation:
There is a high Receivables figure (Rs 338 million) - Does this relate to proceeds from sale of shares, waiting to be reinvested at the right opportunity?

However, RENU's most attractive feature is not visible here: its understated Investment portfolio... To me, these results are just the appetizer; I am waiting for the main course!

Sounds Interesting !!! I'm waiting for a buy signal!

Antonym wrote:Positives:
1. Revenue from Hotel operations has overtaken Other Income this quarter; therefore, RENU deserves to be rerated based on PE ratio applicable to the hotel sector.
2. After the refurbishment, GP margin has increased Q on Q from 60% to 93%! This also augurs well for the future.
3. There has been a YoY reduction in Finance Cost by Rs 4.6 million.

Concerns:
There is a YoY increase in Administrative Expenses by Rs 13.3 million - Is that largely due to the higher service levels expected of the renovated hotel?

Observation:
There is a high Receivables figure (Rs 338 million) - Does this relate to proceeds from sale of shares, waiting to be reinvested at the right opportunity?

However, RENU's most attractive feature is not visible here: its understated Investment portfolio... To me, these results are just the appetizer; I am waiting for the main course! :D

What is the book value of RENU

ipoguru wrote:

What is the book value of RENU

237.87

slstock wrote:

ipoguru wrote:

What is the book value of RENU

237.87

This may be the book value as per thier accounts published. But if you consider re-valuation of their assets and investments, the figure is much higher than this. Antonym would say that it is around Rs. 475 currently

@StocksWatch: Yes, that is a reasonable estimate.

The market value of their investments would be at least Rs 2.425 billion (Refer another post on RENU by seyon for details).
If their property is revalued as indicated in Annual Report 2009/10, the value of PP&E would come to Rs 334 million.
Just replace these figures in the Balance Sheet and you'd arrive at the actual value of Rs 479 per share.

Antonym wrote:@StocksWatch: Yes, that is a reasonable estimate.

The market value of their investments would be at least Rs 2.425 billion (Refer another post on RENU by seyon for details).
If their property is revalued as indicated in Annual Report 2009/10, the value of PP&E would come to Rs 334 million.
Just replace these figures in the Balance Sheet and you'd arrive at the actual value of Rs 479 per share.

Then why directors (or company who know about RENU) selling at 430 rupees?

http://www.cse.lk/cmt/upload_cse_announcements/7831305286676_.pdf

When was the quarterly results published on CSE. I couldn't find a date

StocksWatch wrote:

slstock wrote:

ipoguru wrote:

What is the book value of RENU

237.87

This may be the book value as per thier accounts published. But if you consider re-valuation of their assets and investments, the figure is much higher than this. Antonym would say that it is around Rs. 475 currently

This is the book value from quarter report. RENU does not seem to be doing market to market values in their annual reports possibly because it i held as long term. hey only do cost based analysis on their portfolio.

As I mentioned in my original post their portfolio value is much more . I will not iterate as Seyon had done some analysis. Further to his analysis their Land should be re-valued. Their portfolio vaule + land values should make the NV over Rs 600 easily. ( provided they did not disposed any of their logn term shares).

So RENU to me is also very attractive to medium to long term.

ipoguru wrote:

Antonym wrote:@StocksWatch: Yes, that is a reasonable estimate.

The market value of their investments would be at least Rs 2.425 billion (Refer another post on RENU by seyon for details).
If their property is revalued as indicated in Annual Report 2009/10, the value of PP&E would come to Rs 334 million.
Just replace these figures in the Balance Sheet and you'd arrive at the actual value of Rs 479 per share.

Then why directors (or company who know about RENU) selling at 430 rupees?

http://www.cse.lk/cmt/upload_cse_announcements/7831305286676_.pdf

When was the quarterly results published on CSE. I couldn't find a date

Are we to take director selling seriously all the times? The looks can be deceiving.. Director can sell a part of their holding when the share matures to some price where they think its a good value to drop. On the other hand if others started sellign too, this may come down below 400 again and they can buy back for the next run..
So when we see an NAV range of 400-600 why we should sell now is the question? Are we following the director or our brains?

smallville wrote:

ipoguru wrote:

Antonym wrote:@StocksWatch: Yes, that is a reasonable estimate.

The market value of their investments would be at least Rs 2.425 billion (Refer another post on RENU by seyon for details).
If their property is revalued as indicated in Annual Report 2009/10, the value of PP&E would come to Rs 334 million.
Just replace these figures in the Balance Sheet and you'd arrive at the actual value of Rs 479 per share.

Then why directors (or company who know about RENU) selling at 430 rupees?

http://www.cse.lk/cmt/upload_cse_announcements/7831305286676_.pdf

When was the quarterly results published on CSE. I couldn't find a date

Are we to take director selling seriously all the times? The looks can be deceiving.. Director can sell a part of their holding when the share matures to some price where they think its a good value to drop. On the other hand if others started sellign too, this may come down below 400 again and they can buy back for the next run..
So when we see an NAV range of 400-600 why we should sell now is the question? Are we following the director or our brains?

Hey he only sold 1000 shares. I Must be enough for a vaction to singapore. Why worry this much.

slstock wrote:

smallville wrote:

ipoguru wrote:

Antonym wrote:@StocksWatch: Yes, that is a reasonable estimate.

The market value of their investments would be at least Rs 2.425 billion (Refer another post on RENU by seyon for details).
If their property is revalued as indicated in Annual Report 2009/10, the value of PP&E would come to Rs 334 million.
Just replace these figures in the Balance Sheet and you'd arrive at the actual value of Rs 479 per share.

Then why directors (or company who know about RENU) selling at 430 rupees?

http://www.cse.lk/cmt/upload_cse_announcements/7831305286676_.pdf

When was the quarterly results published on CSE. I couldn't find a date

Are we to take director selling seriously all the times? The looks can be deceiving.. Director can sell a part of their holding when the share matures to some price where they think its a good value to drop. On the other hand if others started sellign too, this may come down below 400 again and they can buy back for the next run..
So when we see an NAV range of 400-600 why we should sell now is the question? Are we following the director or our brains?

Hey he only sold 1000 shares. I Must be enough for a vaction to singapore. Why worry this much.

I checked their last quater results 2010/12/31 and before. There is not significant improvement in this quater results. Why then this is suddenly becomes attractive?

I am not being negative but want to find out the reason for this share to trade at lower P/E. Market is not that dumb there should be a reason to trade this at lower P/E.

ipoguru wrote:

slstock wrote:

smallville wrote:

ipoguru wrote:

Antonym wrote:@StocksWatch: Yes, that is a reasonable estimate.

The market value of their investments would be at least Rs 2.425 billion (Refer another post on RENU by seyon for details).
If their property is revalued as indicated in Annual Report 2009/10, the value of PP&E would come to Rs 334 million.
Just replace these figures in the Balance Sheet and you'd arrive at the actual value of Rs 479 per share.

Then why directors (or company who know about RENU) selling at 430 rupees?

http://www.cse.lk/cmt/upload_cse_announcements/7831305286676_.pdf

When was the quarterly results published on CSE. I couldn't find a date

Are we to take director selling seriously all the times? The looks can be deceiving.. Director can sell a part of their holding when the share matures to some price where they think its a good value to drop. On the other hand if others started sellign too, this may come down below 400 again and they can buy back for the next run..
So when we see an NAV range of 400-600 why we should sell now is the question? Are we following the director or our brains?

Hey he only sold 1000 shares. I Must be enough for a vaction to singapore. Why worry this much.

I checked their last quater results 2010/12/31 and before. There is not significant improvement in this quater results. Why then this is suddenly becomes attractive?

I am not being negative but want to find out the reason for this share to trade at lower P/E. Market is not that dumb there should be a reason to trade this at lower P/E.

I bought few shares of RENU yesterday at 390 level.. It seems very illiquid and as I see somebody trying to keep the price down or is it mere selling pressure of retailers.

If the NAVPS is 400 I will wait till this rise to at least 600. What is your target Antonym?

I aslo brought few RENU @385/- & 380/- , by Selling STAF @49.90 and REEF-W19 @ 21.20 (both with no profit or loss).

Still thinking whether i should do the same for SERV. But it is RED 16%.

Hi, ipoguru...
You are right - RENU is illiquid. For some time now, I have had the distinct impression that the price is being kept down artificially. The sale of 1,000 shares by Lancaster is quite probably a part of the same game-plan. This is the tide; we have to swim with it, not against it...
However, as long as RENU's investment portfolio is being managed by Mr Ravi Thambiayah, I am not concerned.

After seeing the results, I have revised my exit price to Rs 600 and am willing to wait indefinitely. (To recap: Profits from Hotel operations alone have more than doubled Q on Q after refurbishment. So, future EPS is promising.)

The business is doing well; the stock will eventually follow.

I just saw factFINDER's message... Guys, I hope you are doing your own independent analysis as well. Do not take buy or sell decisions based only on what people say. Money has a habit of moving from smart people to smarter people. Be smarter!

Antonym wrote:Hi, ipoguru...
You are right - RENU is illiquid. For some time now, I have had the distinct impression that the price is being kept down artificially. The sale of 1,000 shares by Lancaster is quite probably a part of the same game-plan. This is the tide; we have to swim with it, not against it...
However, as long as RENU's investment portfolio is being managed by Mr Ravi Thambiayah, I am not concerned.

After seeing the results, I have revised my exit price to Rs 600 and am willing to wait indefinitely. (To recap: Profits from Hotel operations alone have more than doubled Q on Q after refurbishment. So, future EPS is promising.)

The business is doing well; the stock will eventually follow. :)

I just saw factFINDER's message... Guys, I hope you are doing your own independent analysis as well. Do not take buy or sell decisions based only on what people say. Money has a habit of moving from smart people to smarter people. Be smarter!

Top 20 share holders hold about 88% shares. The rest hold about 75000 shares.
Top 20 share holders may know the value of share at current levels and do not want to sell.
only few from remaining 75000 is coming to market that's why its illiquid.
Some Big fish may need to collect as much as from this 75000 and hence they keep the price artificially low.

Else there should be something strange to trade at these values.

Antonym wrote:Hi, ipoguru...
You are right - RENU is illiquid. For some time now, I have had the distinct impression that the price is being kept down artificially. The sale of 1,000 shares by Lancaster is quite probably a part of the same game-plan. This is the tide; we have to swim with it, not against it...
However, as long as RENU's investment portfolio is being managed by Mr Ravi Thambiayah, I am not concerned.

After seeing the results, I have revised my exit price to Rs 600 and am willing to wait indefinitely. (To recap: Profits from Hotel operations alone have more than doubled Q on Q after refurbishment. So, future EPS is promising.)

The business is doing well; the stock will eventually follow.

I just saw factFINDER's message... Guys, I hope you are doing your own independent analysis as well. Do not take buy or sell decisions based only on what people say. Money has a habit of moving from smart people to smarter people. Be smarter!

As mentioned if/when they value their long term portfolio + Land , their NAV should be 600+. So if one goes Mdeium to Long Term with this Rs 600 is decent target to keep in mind.

Antonym wrote:
I just saw factFINDER's message... Guys, I hope you are doing your own independent analysis as well. Do not take buy or sell decisions based only on what people say. Money has a habit of moving from smart people to smarter people. Be smarter!

@Antonym,

yes, I did my own analysis as well.

I had a issue of restructuring my small portfolio in order to narrow down the no of stocks. I discussed it with friends here (http://forum.srilankaequity.com/t2923-a-case-study-of-extreme-diversification-seek-your-comments-suggestion). Thanks. you also posted your openion there . Now, I'm in the process of restructuring it. I sold KHL @17/- with loss. and STAF and REEF-W19 without loss or profit. Still thinking about SERV. I'll going to concentrate RENU & AHUN in hotel sector.

About RENU, I first entered in to it in March 2011 at the prices 335/- to 372/-. Though I trust it I didn't want to touch it above 400/- but waiting to come down below 400/- again. I will buy more if it further down to 360-370/- levels.

Wish all of you a nice weekend!

I have calculated the anticipated dividend income for RENU for the Mar - Jun 2011 quater at Rs. 56 million. That is Rs. 8 per share. This will be reflected in the other income category of next quaterly report. (Dividends income calculated based on RENU's portfolio as published in the last available annual report)

On top of this, the company has shown remarkable increase in the profit from hotel operations in the recently published financial report which is a good sign.

Overall the future of RENU is promising to me. Do your own analysis and decide.

StocksWatch wrote:I have calculated the anticipated dividend income for RENU for the Jan - Mar 2011 quater at Rs. 56 million. That is Rs. 8 per share. This will be reflected in the other income category of next quaterly report. (Dividends income calculated based on RENU's portfolio as published in the last available annual report)

On top of this, the company has shown remarkable increase in the profit from hotel operations in the recently published financial report which is a good sign.

Overall the future of RENU is promising to me. Do your own analysis and decide.

I totaly agree with your views on RENU.

kam2011 wrote:

StocksWatch wrote:I have calculated the anticipated dividend income for RENU for the Jan - Mar 2011 quater at Rs. 56 million. That is Rs. 8 per share. This will be reflected in the other income category of next quaterly report. (Dividends income calculated based on RENU's portfolio as published in the last available annual report)

On top of this, the company has shown remarkable increase in the profit from hotel operations in the recently published financial report which is a good sign.

Overall the future of RENU is promising to me. Do your own analysis and decide.

I totaly agree with your views on RENU.

Sorry just saw a typo in my post. The 56 million dividend income can be expected for Mar - Jun 2011 quater and not Jan - Mar quater. This is now corrected in my original post above.