Rowsley - what's up? (or down?)

Sell the mother shares hold the warrants to maturity...warrant is just a fraction of the mother share's price...6 months from 11 Oct u may exercise into mother shares by paying 18cts ..still cheaper than mother shares which is about 31cts verses 30cts {12cts +18cts(exercise price)} Normally nobody exercise until expiry dates unless the warrants plus exercise price is way below Rowsley's shares than worth paying cash to registrar of Rowsley..U hold warrants for its gearing/leverage effect

For the FA investor, here are some nos. to go by:

12.69 cents a share is the NTA of Rowsley.

14.28 is the NTA assuming all the warrants are converted.

Rowsley now trades at around 2.4X NTA.

OCBC in August valued Rowsley at 34 cents after conversion of all the warrants.

In short, Rowsley is trading at fair value now.

by kit whye:

Rowsley reported its H1 results ended 30 Sep 2013. However, the income statement is not meaningful as the new RTO business is still at its infancy.

Just look at its balance sheet: Total equity of $685 million, Goodwill of $371 million, and current outstanding shares of 4251 million.

The goodwill is the payment for excess book value of RSP Architects which has a original book value of $410 million that include the 9.23-hectare land in Malaysia’s Iskandar Development Region.

Therefore, its NAV per share now is 16 cents, and NTA per share is 7.4 cents a share. Therefore, current intrinsic value of Rowsley should be between 7.4 cents and 16 cents.

The key is how much net profit Rowsley will made out from selling off its developed properties at Iskandar? In circulation is also 1976.8 million warrants which could be converted into ordinary shares at a conversion price of 18 cents a share.

The warrant closed at 11 cents yesterday. Converting the warrant currently will not benefit the warrant holders. Rowsley has $360 million book value of investment properties and properties under development from its acquisition of RSP Architect. If Rowsley could make 30% from the development, its EPS should come in at at about 2.5 cents a share. Will that able to boost Rowsley's share price?

Dampener on Iskandar property!

The Malaysian Budget 2014 review of the Real Property Gains Tax has extended the quantum of increase from 15% within the first two years of disposal to 30% within the first three years of disposal.

It has also re-imposed a prevailing 5% tax on companies and non-citizens in the sixth and subsequent years.

The new RPGT, and the removal of developers interest bearing scheme (DIBS) which enable buyers to pay a 5% or 10% downpayment with mortgage payments kicking in until the property is completed, would also stamp out bulk buying by foreigners.