Rowsley

Dear LimPeter,
Your name-sake counterpart has been hot in the news lately.
While I do not doubt the reliability and quality of RSP, I am interested to know the mechanism behind this deal. It seems that the shell owner does not want to fork out money for the architects and instead invite them to be part of the project.
Hence, no costs upfront for the shell company and risks are minimised. It is a well planned deal.
As to what valuation should the public give to a property-architect firm, I leave it to the market to decide.

proof in the pudding who laughs his or her way to the bank (i don't have a stake in rowsley but wished i had) !

Requoted ..see how wrong the current price and the past
TOPIC: Rowlsey - what's up? (or down?)
Rowlsey - what's up? (or down?) 18 Mar 2013 09:21 #13584
Rowsley's sharp and sudden fall on Friday afternoon was supposedly due to talk of someone giving an "overvalued" assessment on the counter. For a stock that held on well to its price last week despite the rout on speculative counters, the sudden hammering on Friday seems rather strange and sudden, and SGX apparently thought so too, querying the company at 4.30pm. After all, Rowlsey has always been more of a speculative "concept" stock that should have come down earlier together with its compatriots rather than only on late Friday afternoon.

With the little info that I have, I thought it's interesting to see how Rowsley's figures look like, assuming that the deal to (1) acquire RSP Architects and (2) purchase and develop Vantage Bay's site in Johor Bahru are successful.

The story about Rowsley is the plan to develop 10 million sq ft of GFA (hotels, condos, hospitals, shops) on a piece of land in JB not far away from the Causeway, facing the straits and Singapore. It is near to the new MRT station in JB that will be linked to Singapore. The site looks rather good.

Assuming that this space is all used to build condo units for sale (being the most conservative assumption since medical and retail spaces would be much more valuable), this is the possible maths:

Land cost psf of GFA = M$90 psf (arrived at from S$358m divided by 10m sq ft multiplied by 0.4 exchange rate)

Other costs = M$510 psf (assumption based on 99yr condos of a reasonable standard at Medini being launched at $600-700 psf; so cost of M$510 psf is reasonable)

Sales price = M$1,200 psf (based on average sales price of Brunsfield's Danga Bay project of M$1,100 psf, and Setia 88's condo at JB of M$1,200-1,400 psf, etc. I actually think Rowsley's product should be priced higher as the Singapore name would command a premium, but M$1,200 psf is assumed for prudence)

Gross profit = 10,000,000 X (M$1,200-$510-$90) = M$6 billion.

Divided by 6.841 billion shares post the warrants issue, the gross profit per share is thus 87.7 sen or 35 Sing cts.

This of course is a very crude way of calculating, but it does give us an idea that the project could be quite profitable. Of course, the Vantage Bay medical city development would span several years, and not all parts of it will be for sale.

Because of the warrants issue, the ex-rights (to the warrants) price of Rowsley would be 25.3 ct, assuming Friday's close of 40ct. This 25.3 ct is then compared to the gross profit of 35 ct from the Vantage Bay project, and on this alone, the maths does not look too bad. Many other speculative counters do not have similar positive projections.

In addition, Rowsley will not just be a developer stock but one that can be grouped under "medical" should it retain the hospital, thereby commanding a higher valuation. RSP Architects would also form another component of its NAV. There are also possibilities of further injection of businesses into Rowsley, since Peter Lim is also working on Motorsports City in Gerbang Nusajaya.

Personally, I like the Iskandar theme as I see many catalysts going forward. So far, only a few SGX stocks come under this theme, and Rowsley is the most "exposed" in terms of its Iskandar business relative to its market cap. The caveat, of course, is that the deal is successfully completed.

The catalysts for Iskandar are many, and one only has to follow the articles in Malaysian online news sites to see that many things are going on just up north. Some of these include the imminent IPO of IWH, the HSR developments, and the confirmation of the Woodlands-JB MRT link.

As an interesting example, if one were to go through CATs ads last Saturday, one would come across ads for a condo called Astaka. Not many people know it yet, but it will have the tallest residential building in Malaysia/Singapore. And it will be built in JB City, which is Zone A of Iskandar. It will be 300m high and tower over the tallest buildings in Singapore (ie, Republic Plaza, at 280m) and rise higher than Marina Bay Sands (207m). Already, whole floors of the towers are snapped up by buyers.

That an iconic tower like this is planned for Iskandar is perhaps a sign that the music is getting a bit louder just outside our backyard. Could Rowsley be one of the tunes?
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Last Edit: 19 Mar 2013 11:06 by

MacGyver wrote: Dear LimPeter,
Your name-sake counterpart has been hot in the news lately.
While I do not doubt the reliability and quality of RSP, I am interested to know the mechanism behind this deal. It seems that the shell owner does not want to fork out money for the architects and instead invite them to be part of the project.
Hence, no costs upfront for the shell company and risks are minimised. It is a well planned deal.
As to what valuation should the public give to a property-architect firm, I leave it to the market to decide.

Requoted..see how wrong/right the articles on Rowsley when it was ab 25cts in early 2013

TOPIC: Rowlsey - what's up? (or down?)
Rowlsey - what's up? (or down?) 18 Mar 2013 09:21 #13584
Rowsley's sharp and sudden fall on Friday afternoon was supposedly due to talk of someone giving an "overvalued" assessment on the counter. For a stock that held on well to its price last week despite the rout on speculative counters, the sudden hammering on Friday seems rather strange and sudden, and SGX apparently thought so too, querying the company at 4.30pm. After all, Rowlsey has always been more of a speculative "concept" stock that should have come down earlier together with its compatriots rather than only on late Friday afternoon.

With the little info that I have, I thought it's interesting to see how Rowsley's figures look like, assuming that the deal to (1) acquire RSP Architects and (2) purchase and develop Vantage Bay's site in Johor Bahru are successful.

The story about Rowsley is the plan to develop 10 million sq ft of GFA (hotels, condos, hospitals, shops) on a piece of land in JB not far away from the Causeway, facing the straits and Singapore. It is near to the new MRT station in JB that will be linked to Singapore. The site looks rather good.

Assuming that this space is all used to build condo units for sale (being the most conservative assumption since medical and retail spaces would be much more valuable), this is the possible maths:

Land cost psf of GFA = M$90 psf (arrived at from S$358m divided by 10m sq ft multiplied by 0.4 exchange rate)

Other costs = M$510 psf (assumption based on 99yr condos of a reasonable standard at Medini being launched at $600-700 psf; so cost of M$510 psf is reasonable)

Sales price = M$1,200 psf (based on average sales price of Brunsfield's Danga Bay project of M$1,100 psf, and Setia 88's condo at JB of M$1,200-1,400 psf, etc. I actually think Rowsley's product should be priced higher as the Singapore name would command a premium, but M$1,200 psf is assumed for prudence)

Gross profit = 10,000,000 X (M$1,200-$510-$90) = M$6 billion.

Divided by 6.841 billion shares post the warrants issue, the gross profit per share is thus 87.7 sen or 35 Sing cts.

This of course is a very crude way of calculating, but it does give us an idea that the project could be quite profitable. Of course, the Vantage Bay medical city development would span several years, and not all parts of it will be for sale.

Because of the warrants issue, the ex-rights (to the warrants) price of Rowsley would be 25.3 ct, assuming Friday's close of 40ct. This 25.3 ct is then compared to the gross profit of 35 ct from the Vantage Bay project, and on this alone, the maths does not look too bad. Many other speculative counters do not have similar positive projections.

In addition, Rowsley will not just be a developer stock but one that can be grouped under "medical" should it retain the hospital, thereby commanding a higher valuation. RSP Architects would also form another component of its NAV. There are also possibilities of further injection of businesses into Rowsley, since Peter Lim is also working on Motorsports City in Gerbang Nusajaya.

Personally, I like the Iskandar theme as I see many catalysts going forward. So far, only a few SGX stocks come under this theme, and Rowsley is the most "exposed" in terms of its Iskandar business relative to its market cap. The caveat, of course, is that the deal is successfully completed.

The catalysts for Iskandar are many, and one only has to follow the articles in Malaysian online news sites to see that many things are going on just up north. Some of these include the imminent IPO of IWH, the HSR developments, and the confirmation of the Woodlands-JB MRT link.

As an interesting example, if one were to go through CATs ads last Saturday, one would come across ads for a condo called Astaka. Not many people know it yet, but it will have the tallest residential building in Malaysia/Singapore. And it will be built in JB City, which is Zone A of Iskandar. It will be 300m high and tower over the tallest buildings in Singapore (ie, Republic Plaza, at 280m) and rise higher than Marina Bay Sands (207m). Already, whole floors of the towers are snapped up by buyers.

That an iconic tower like this is planned for Iskandar is perhaps a sign that the music is getting a bit louder just outside our backyard. Could Rowsley be one of the tunes?
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Last Edit: 19 Mar 2013 11:06 by

For your info I I sold off my mother shares and add more warrants at 12 over cts (12+18=30cts) and intend to keep and maybe exercise into mother shares...Rowsley is weak becoz of the designated stocks and US debt ceiling..should be O.K..taperrimng un ikley in Oct..maybe next year..P.L normally won't let u lose if u can hold till maturity..imagine RSP and Sultan happy with their shares only doubled (from 15cts) when it was first announced in Dec 2012 to buy RSP and Vantage Bay

starlene ( Date: 15-Oct-2013 21:45) Posted:

Feels so sad for paladin..,,,even if you bought at 60cts marginal loss (60+18x2)/3=32 mother shares..no need to bother about the warrants ..already priced in at exercise price 18cts...that is after u exercise ( 6 months after listing) your cost is still about 32cts..ok waht Rowsley at this price-RSP is a brand name if you don't consider the Sultan and Iskander factor

oldflyingfox ( Date: 14-Oct-2013 09:55) Posted:

So fast u cut? It is now trading around the support formed in Jan 2013. I will consider to cut if it closed below $0.28