During the recent AGM, the Board Chairman revealed that the sell and least back for the properties own by Notion is on going. He added, In a very cheeky way, it will be "rewarding" to share holders....I am speculating for a special dividend.
How much can Notion gain from this recent activity? More importantly, if they do pay out, how much can they pay out?
A quick check with real estate agent web sites, the current asking price for property around the area is RM160-350
(some of the reffernce: iproperty.com 1, iproperty 2)
Assumptions:
1.These are asking price not transacted price. I will assume RM200 and RM160 as generally property around Klang valley has appreciated about 3-4 times since 2008. looking at the Jalan Sungai Binjai factory bought in 2008, this seems to be reasonable.
2.Assuming reported sq ft is for land size. It is not mention the sq ft quoted is the build up or land size. But a OSK report in 2009 seems to point this as land sizes.
3. The chairmen also say Notion will keep 2 years worth of rental as precaution. How much will this be? As a rule of thumb, rental yield is about 3-6% currently depending type, area etc. I will assume, who ever buys this properties will make 5% rental yield.
4.Talking to the financial controller during AGM, it is also known that they will keep further portion of the proceed for other investments if it comes up. How much will they keep? I am assuming 50%.
The stock price is hovering arround RM0.65 to RM0.6, if we take the mean of RM0.63, a dividend of RM0.19 and RM0.13 will give a dividend yield of 30% and 20% respectively. If we take a further 20% discount as margin of error on the speculated RM0.13 dividend, resulting a RM0.10 dividen which still gives 16.5% dividend yield.
My guest, it will be at the range of RM0.10 to RM0.15.
Will this excite the market? I have no idea.
But this exercise will surely make the financial book very impressive, reduce liabilities, increased cash.
Yet, the fact that DSL camera market is still weak base on Nikon's latest quarter report announced few days ago. Western Digital is about to announce results on 30 April 2014. This year look set to remain a flattish earnings.
Note: I am a share owner of Notion.
Happy Investing !
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Special dividend may give up one off share price jump. company with great growth will normally give us better return.
ReplyDeleteHi Peggy, agree with you, the special dividend is a one off thing. Sort of a sweetener to remain invested for the year. What I have not mentioned here is my fair value is about RM1.1 (taking into account of expecting a poorer result -10% this year and a conservative cost of capital of 15%). At RM0.63. Safety of margin is 42%.
DeleteYou are also spot own about growth. Growth for Notion is one that is blurry right now. Will DSLR make a come back next year? will the automotive show strong growth? too early to judge.
But one thing for sure, this a unloved counter at the moment...a ingredient for a undervalue counter.
Hi, do you still holding notion? this stock really makes me wanna bankrupt
ReplyDeleteOMG!, JokerAce, Firstly, There was a report in the daily that the management has aborted the sale of the property! Without this, I have taken profit and sold all my holdings when the Q3 report were out. By then it was obvious that the SLR camera would not recover anytime soon. Subsequently, few weeks later the Silver mine in Australia went bankrupt. Even more reason not to hold it.
ReplyDeleteI was caught up with studying other counters and had not wrote a update on this counter.
I have not looked at Notion since August, if all things remains the same i suggest to cut your losses. However, the best place to monitor this counter is by studying the Qttrly reports of Nikon and Canon. (which is easily available online, it was from there I understood, the SLR market is very weak)
If still the SLR market is weak, Notion is weak.
Hope this helps in some way.