Thursday, 1 December 2011

HOTEL PROPERTIES (LIM&TAN)

S$1.66-HPLS.SI

? HPL's board said they were unaware of reason(s) that could explain yesterday's 16-cent / 8.8% drop in share price on above-average 2.05 mln shares.

? This should "take care" of issues like redevelopment of HPL's properties at Orchard Road (HPL House, Forum, Hilton Hotel).

? However if it should concern the second largest shareholder: Wheelock Prop and its 20% stake, then it is not up to HPL's board to be kept informed.

? Recall Wheelock first bought over Quek Leng Chan / QuocoLand's 20% stake 5 years ago (at around $1.80 a share), which in turn was held on to for 7 years.

? Our last call was a BUY after Ong Beng Seng bought 1.3 mln shares on Aug 31st at $1.96 each. The stock rose to $2.11 on Sept 7th before resuming on its downtrend.

? At 38.5% discount to latest book NAV of $2.70, we recommend adding, while acknowledging HPL remains a game of "patience", and also that most property stocks trade at big discounts to NAV.

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