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Stockwatch- G&W Group (Holdings) Ltd listed on SGX

Stockwatch: G&W Group (Holdings) Ltd listed on SGX

Currently, trading at 22cts, which is a 15% discount to net cash per share of 26cts, and 58% discount to NAV per share of 52.5cts (based on 31 Dec 2005 balance sheet). The fact that it is trading below net cash per share catches my eyes as it fits my description of a value stock.

CORPORATE PROFILE
Established in 1979, G & W Group (Holdings) Limited, today focuses on the Property Development and Management, Education and other businesses in the People’s Republic of China (“PRC”).

It also has businesses in the Construction and Building Materials segment as well as in the Oil & Gas segment.

Over the years, the Group has built up a strong business network and presence in Asia.

A quick review of its 2005 annual report shows that G&W is remain profitable for the last 3 years:

Net Profit EPS
2003 S$0.506m 0.41cts
2004 S$0.853m 0.69cts
2005 S$0.944m 0.76cts

A very recent announcement on MASNET on 12 Apr 2006 for reference:

G & W Group Rides On PRC’s
Property Market Boom
-Maiden Residential Property Development, Sentosa Garden was a sell-out success
-Targets two new property development projects in PRC
-Expects solid earnings potentials from its property ventures in PRC

Singapore, 12 April 2006 – Mainboard-listed G & W Group (Holdings) Limited (“G & W” or the “Group”), an established property development group expects solid potential earnings streams from its property development projects in PRC due to its continued strong economic growth, huge population base with strong aspirations of home ownership and rapid urbanization.

The Group expects an improvement in its financial performance due to the robust economic growth in the region, especially Singapore and PRC. The recovery in the Singapore construction industry * coupled with the strong growth in the oil & gas sector have enhanced the profitability of its two associate companies namely, Construction Consortium Pte. Ltd. and Oakwell Engineering Limited.

G & W Managing Director, Mr Koh Tiak Chye said,” We are pleased to update our shareholders and the public about the improving performance of the Group. The sell-out success of our Sentosa Garden project has clearly supported the Group’s strategic focus on the PRC property market. Our focus on the property business in PRC will be a key growth driver for the Group in the coming years. ”

Leveraging on G & W’s expertise and experience in PRC, the Group has embarked on two new property development projects through various joint venture partners. The first project is Changbai New Town in Heping District in Shenyang while the second project is in Zhonglu District of Changzhou, Jiangsu Province.

The Changbai New Town project has the potential to be developed into mixed residential and commercial properties and other amenities. The project will be spread over approximately six phases and will extend over a period of approximately nine years.

When asked to comment on the plans for the future, Mr Koh responded optimistically,” We have been in the China market since the early nineties and have established strong working relationship with our PRC partners. This has given the Group a good head start into the booming China’s residential and commercial property market which still has a lot of growth potential in view of China’s growing affluence.”

Mr Koh continued, “ The Group is currently waiting for approval from the local authorities with regards to our two property development projects. More details would be revealed when we have obtained the necessary approval. ”

Mr Koh concluded, “ The Group has a strong balance sheet of some S$59 million cash and cash equivalents as at 31 December 2005. We intend to continue building up our war chest in view of the current opportunities in the booming PRC property market. Going forward, we anticipate the PRC property market to be the main growth driver for G & W Group.”

* Based on the report by Building & Construction Authority (“BCA”), the total construction demand is likely to reach between S$12.0 billion and S$13.5 billion in 2006 as oppose to S$11.3 billion in 2005.

posted by gsg @ 6:56 PM