LenaHuat wrote:...The Kweks are know to dislike scholars, bookworms who cannot stand the test of the market.
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This alone is worth 3 cheers.
LenaHuat wrote:...The Kweks are know to dislike scholars, bookworms who cannot stand the test of the market.
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LenaHuat wrote:Hi Aspellian
CDL is superior to CapLand. CapLand is pretty crap. Why?
(1)The management is paid bonus on the concept of EVA, which IMHO is a silly idea of rewarding management. The cost of capital, especially the cost of debt, is so low. So without lifting a finger, the default formula will reward the management because it would have deemed to create EVA.
(2) When they bought Chinese land from HK's Ex-Chief Executive Tung, I commented that it was a lazy way of doing business in China. There is no knowledge transfer. The management team is not learning about wheeling-and-dealing in the pretty complicated Chinese real estate market. Bidding for land is very tricky in China.
(3) During the global financial crisis, its capital structure was weak and proven unreliable as it had to desperately order a rights issue to raise capital.
(4) The team is gone except for Liew. I have seen Liew in action at AGM. You can read about my opinion from my earlier posts.
(5) Look at its exorbitant bids for land (partly hived off to CapitaMallAsia) in Jurong and Bishan.
Now back to CDL, the Kwek family is conservative. Look at their gearing and the fact that they are the only listed property developer to carry land bank at cost. There is no revaluation surplus. The Kweks are know to dislike scholars, bookworms who cannot stand the test of the market.
My 1 cent
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