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thereslifeafter87
03-10-2004, 02:36 PM
This company was brought to my attention recently by that failed processor of bodily waste products PackersOldKidney on the DVN thread.

As soon as I saw the company's latest report, I sent him an email and asked him to remove his post so that I could accumulate a position without pushing the price up too much (the stock is reasonably illiquid). He did so and for that I thank him.

However, now that my buying is done, and with his permission, I thought I would share my research on the company with the readers of this forum (read: Time to ramp! :) )

UOS is a property investor and developer based in Malaysia.

Basic Financial Data is as follows (my figures are adjusted to present a realistic conservative picture and are assembled by a total examination of the company report).

Shares on issue: 65,792,469
Market Price: $1.00
Market Cap: 65,792,469
EPS 2004 (Half year): 27.12 CPS (adjusted for outside equity interest)
NTA: $1.89 per share

PE (using historical 1st half 2004 profit only): 3.69

Revenue 2003: 57,806,000
Revenue 2004 HY: 40,073,000

Profit 2003: 10,499,000
Profit 2004 HY: 17,843,000

Equity: 124,025,000
Return on Equity (1st half only): 14.37%
Cashflow 2003: 13,310,000
Cashflow 1st half 2004: 10,911,000
Debt: negligible

The following returns are unadjusted for outside equity interest.
Investment Property Market Value: 128,809,000
Rental Income (projected for FY 2004): 8,550,000
Gross Return on Investment Properties: 6.64%

Dividend yield (gross) around 5%

UOS has a strong track record in the property development industry, and has been highly profitable. Earnings in the 2nd half of 2004 will be lower than the first, due to less stock and correspondingly lower sales, however the full year profit will be well above the HY announcement.

Property devlopment earnings will always be lumpy as new projects are developed and then sold. However, UOS has performed well in the past and should continue to do so.

The real kicker with this company is its incredible valuation! At $1 it is valued at less than 4 times its half year earnings!
The share price is $1 while NTA stands at $1.88. If the company were to liquidate tomorrow, shareholders could stand to gain an 88% return (if properties were sold at market).

The company also has virtually no debt. Yes thats right! A property developer with no debt!

The only downside some might see with this compnay is that it is quite illiquid. Other than that I can't seem to fault it...

Leaving aside the property development aspect of the business, UOS still owns investment properties worth over $1.70 per share, and earns returns on these investments comparable to the listed New Zealand property trusts.

This is a strong investment by any measure.

Questions, comments?

Negative responses/accusations of ramping all welcomed! :)

thereslifeafter87
03-10-2004, 02:40 PM
P.S.

The company should earn well over 20% ROE for the full year.

Sauce
03-10-2004, 04:17 PM
Thats a big ROE for a company with no gearing. Debt to equity of 7% compared to industry median of 54%.

(surely if the market they are operating in is a lucrative one they could double that ROE by taking on some debt? albeit riskier but 7% is too conservative IMO!)

They mention in the half year accounts they are not expecting the second half to be as stellar as the first. are they stacked with projects to ensure continued growth through 05?

They were a bargain at 40c a just over a month ago thats for sure.

I imagine the large discount to NTA is because of its small cap status, illiquidity and operating in a high risk and cyclical industry. The discount seems a little excessive though!

They are obviously good at what they do, have proven numbers and look cheap on fundamental basis, but I think they definitely deserve a high level of risk to be factored into the price.

Probably a fairly speculative BUY in my opinion, good if you want some exposure to the sector and have the knowledge/ability to keep an eye on the malaysian property market!

Not one for my dollar, but I hope it goes through the roof for you tla87 :D:D:D certainly looks like good value

Sauce [}:)]

Sauce
03-10-2004, 04:43 PM
tla87,

As you mention in your original post, the nature of the industry means the earnings can be "lumpy", this is a good point - I think valuing a company of this nature on a historical PE multiple is far from ideal. And forecasting EPS for a forward PE is much harder for a because you have to know alot about what future projects they have and of course with property development the costs and final sale prices are so subjective.

You have to put alot of trust in their ability to create the opportinities.

Regards,

Sauce [}:)]

Packersoldkidney
03-10-2004, 06:39 PM
Guess I gotta reply since my name has been mentioned!

Yeah, this is one for any diversified portfolio, and frankly on the numbers puts all other property development companies in the shade: not to mention most if not all companies with the growth label on the ASX. Even though I'm a numbers dope, and quite possibly a dope in general (ever heard of a smart kidney? Nup, didn't think so), even I can tell this one is way undervalued. (!)

Take the point that profits will be up one report and down the next. Stock is very illiquid and very difficult to get hold of. Exiting this one if you have even more than a few shares could be a nightmare in certain situations.

Should also mention the company's website, which is: http://www.uoa.com.my Worth a look to see what they have currently on the boil.

Tightly held, and way, way undervalued.

Thanks to TheresLifeAfter87 for the figures: think he's picked a winner. I have a small holding via another organ (he he), but am of the opinion the share liquidity problem will have to be looked at by the directors to increase the share price to something approaching fair value. :)

thereslifeafter87
04-10-2004, 10:50 AM
Yeah,

Definitely a bargain at 40c, however definitely still a bargain now.

I don't see it as a risky play, because they have a stable income stream from their investment properties, pay a good dividend, have plenty of cash and f all debt.

You are right though Sauce that their future income depends on relying on them securing development opportunities and that PE's don't matter too much. Thats why I'm going on the basis of NTA more in my valuation.

Next half they wont earn as much because they don't have as many projects to sell. But even if they stop property development once their current stock runs out, the company will still be way undervalued, and should still be profitable (with no development expenses).

There is very little long term risk in this one. Perhaps short term risk if you don't like illiquidity or need to exit in a hurry for some other purpose.

There is no speculation involved here. Its classically undervalued.

thereslifeafter87
04-10-2004, 10:58 AM
Wow,
Just checked out the website.
Puts into perspective the experience this coy has.
A lot of big big projects successfully completed.

And the balance sheet couldn't be prettier :-)


P.S.

Sauce,

you are right about being conservative. But with $120mill in equity, they could conceivably gear right up and undertake a project requiring investment of $300-400 mill. If they make margins of say 30% not undoable for a property developer, then thats a profit of $120 mill spread maybe over 3-4 years, say $30 mill a year.

That may be wishful thinking about potential, but the potential is definitely there... and at these prices, there is a huge margin of safety.

thereslifeafter87
04-10-2004, 11:12 AM
What do you know,
Ramping does work :)

So who purchased the 4,600 shares at $1.05?

mark100
04-10-2004, 02:34 PM
not me - I was next, 5000 @ 1.05!
Being following this one for a while hoping it would fall back on low volume but now the ramping has started I better get in!

cheers
mark

thereslifeafter87
04-10-2004, 03:00 PM
lol mark,

good to see you in there.

I wouldn't want to wait for this one to fall back! not at these prices.

I'd rather be in and sure. I had a bid sitting at 95c for a few days, but then just decided to take what was on offer.
Sellers are few and far between

Sauce
04-10-2004, 04:26 PM
I agree totally, that ROE could be alot higher through a bit of leverage, then they would make some serious cash. Would be interesting question to ask of them actually - whether external funding would be sought if an opportunity presented itself that required it. Maybe its not part of their business plan - leading with revenue is not dumb in a risky business like property development - no interest costs to sink you if you dont hit the target margins.

I am sure holders will do fantastically from this stock, but there are elements of risk to do with the property market and the nature of developments regardless. Property developers can and do *f**k* things up from time to time and go broke, and rental yeilds/occupancy can drop etc etc etc.

Im not trying to be really negative, just taking the opposite view for the point of discussion! :D:D:D

Good spotting BTW, the companies figures are as healthy as it gets from my (very) limited view.

I will be watching closely [:p]

Sauce [}:)]


quote:Originally posted by thereslifeafter87

Wow,
Just checked out the website.
Puts into perspective the experience this coy has.
A lot of big big projects successfully completed.

And the balance sheet couldn't be prettier :-)


P.S.

Sauce,

you are right about being conservative. But with $120mill in equity, they could conceivably gear right up and undertake a project requiring investment of $300-400 mill. If they make margins of say 30% not undoable for a property developer, then thats a profit of $120 mill spread maybe over 3-4 years, say $30 mill a year.

That may be wishful thinking about potential, but the potential is definitely there... and at these prices, there is a huge margin of safety.

thereslifeafter87
05-10-2004, 11:23 AM
You are right sauce,

There are risks involved with the property market.

But, unless all UOS's investment properties suddenly halve in value, it will still be priced below NTA :-)

This substantially limits any risk.

Price up to $1.11 since I started this thread :-) Classic.

Still good buying at these levels though, with NTA at $1.88 you have no future earnings priced in to the share, and the possibility of around $60 million in losses before NTA will reach the current share price :-)

CAM
05-10-2004, 11:36 AM
quote:Originally posted by thereslifeafter87
There are risks involved with the property market.

But, unless all UOS's investment properties suddenly halve in value, it will still be priced below NTA :-)



Well It would depend on who put the current value on them, when etc etc

Still looks good though

thereslifeafter87
05-10-2004, 03:18 PM
It appears they revalue their properties to market every year. I would assume that an independent valuer would be used...

Dimebag
06-10-2004, 05:20 PM
I've given UOS a quick look.

The stock looks to have some degree of promise. In particular, the ratio of its current stock price to NTA (0.59:1 at $1.11) appears attractive. In addition, the group's balance sheet is very strong with virtually no net debt.

However, a few factors should be borne in mind before one gets too excited:

Firstly, the results of property companies in general are highly dependent on the state of the property market. In recent years, the property market has undergone a period of unprecedented strength, and virtually all property development companies have done well. In such an environment, properties are easy to sell, and can be marketed for very good prices. Consequently, margins are very high.

However, the large profits these developers make are inevitably recycled back into further property developments, which are then marketed for further profits. As this capital accumulation procedure proceeds apace in a buoyant market, the exponential progression eventually forges its own anchor. The inexorable increase in the supply of new properties coming to market must eventually put a dampener on price rises, and thus the ability to market properties, and the margins attained thereof.

The high profits and ROEs property development companies have been enjoying in recent years are unsustainable, and profits will be apt to fall in coming years. For this reason, caution should be exercised in projecting future profits for such companies.

UOS value all of their investment properties at market value; TLA87 quotes the current yield on such carrying values as being 6.7%. This is very low. As value investors, we are interested in value not market price.

To my mind, a fair yield on investment property with the charateristics of UOS's property, in the long-term, would be closer to 9%. This shrinks the value of investment properties to $95m, shaving $33m off NTA (or about $0.50 per share -> adjusted NTA = $1.40). Furthermore, this is fair value not undervalue. Value investors like to purchase for below value. Listed property trusts often sell at a 10-20% discount to asset backing.

Secondly, UOS have operating costs of approximately $3m-$4m pa. If we capitalise these costs, we get a negative value of about $40m.

Therefore, the value of the business, excluding the property development arm, would appear closer to $95m - $40m = $55m (about $0.80).

The market, at $1.11 (well, at least the market before yesterday's rather successful ramping effort!), is thus valuing the property development arm at approximately A$20m.

Is this undervalued? Most probably, yes. UOS have a long history of completing quality developments, and have the balance sheet to ride out the inevitable industry downturn that is rapidly approaching. Property development opportunities over the coming decades will be numerous, and UOS will be their to take advantage of such opportunities.

However, it is difficult to ascribe an actual value to the operation. Punters who buy in would need to be patient, as a downturn could lead to several years of neutral/subdued profits, or even losses.

UOS's most recent half year report was very impressive, booking a net profit of $17m. However, this included a number of large projects being brought to market in that period. Because UOS still has a relatively small base of developments, earnings are apt to be extremely lumpy (a look at their profit history will highlight this). If we say annual earnings will be closer to $10m pa on a normalised bases, UOS look to be undervalued.

Based on current valuations of property development coys, 5x earnings would be more appropriate = $50 (75cps).

So a rough value for UOS is $1.55.

However, it is not unexpected that UOS would trade at a discount to this figure due to:
(1) Sovereign risk and economic risk of operating in Malaysia
(2) The servere level of illiquidity

With the strong possibility of a property correction, buyers must be prepared to ride out a few years of meagre profits. The stock's performanc

Packersoldkidney
06-10-2004, 06:49 PM
Good post, as ever, Dimebag.

Would like to add that rumours of the alleged death of the 'world-wide' (note the inverted commas) property bubble may be overstated. One reason why high 'world-wide' property prices may be with us for some time to come is the breakdown of the transmission mechanism used by central banks to pass on interest rate rises. This really is a relatively recent phenomenon, and is tied to world global deregulation, especially with the 'off-shoring' (or, more to the point, repackaging and reselling overseas) of bank loans.

To explain what this means is that Central Bank A could raise rates, but this would not have 'flow on' effect of raising interest rates for many people with mortgages; as many people with mortgages do not have loans with that country's institutions, but rather with institutions that are on the other side of the globe, that are controlled by Central Bank B. If Central Bank B raised rates, then that may have the desired effect; but more likely what raising rates by Central Bank B would mean there would be an international chase for the lowest interest rates available by those affected by rate rises by Central Bank B (who could be on the other side of the world).

As an addendum to this, and this is nothing to do with the immediate prospects of UOS, I can see on the horizon, if inflation becomes internationally problematic at some stage, that some form of financial re-regulation will be re-instituted; at the very least to restore traditional Central Bank powers of control over economies.

Now, finance heads: can you tell me the difference between the NTA, and the NAV: as I am reliably informed that the latter is a more pertinent valuation tool for property companies. Frankly, the difference that I can see is that the NTA has one more T in it, but no V, that the NAV has. Also, N and the A are differently placed in the NTA comparative to the NAV. Apart from this, there seems to be very little difference at all. :)

In other words, have you worked out the NAV for UOS? Or will I have to send an SOS to someone else? Is the NTA here to stay? Maybe the NAV is the place to be? Perhaps the NAV is a better tool then the NTA, and values UOS a wee bit less? Or maybe more? I'm not quite sure?

Right now I think I'd better halt, or you'll work out I'm a finance dolt.
Also, that I can't rhyme, and besides, I don't have the time.

Sauce
06-10-2004, 07:30 PM
Good points Dimebag.

I have been working in the property market for years and I can tell you one thing for certain - property valuation, especially residential but also commercial, is more of an art than a science - and valuers are often influenced. I personally would be loathe to trust an independent valuers assessment let alone a companies own valuations.

Sauce [}:)]

thereslifeafter87
07-10-2004, 11:26 AM
Cheers Cantab,

Nice post Dimebag, though I think you overstate the downside bye quite a lot.

Cantab, profits made by UOS aren't unsustainable, they are simply going to be lumpy from year to year - they won't grown in a linear fashion. They will however grow.

Personally I prefer businesses too, I just haven't been able to find any as undervalued as this company. Property development is a business also, just with less predictable revenue streams.

I still rate UOS a strong buy, and I note that Dimebag has named them as his new favourite among the ASX listed property developers.

thereslifeafter87
08-10-2004, 11:46 AM
UOS now ex a 2c dividend...

That means a $280 cheque in the post for me.... Sweet.

thereslifeafter87
12-10-2004, 08:56 PM
Announcement today that the property devlopment business of UOS may be listed on the Malaysian stock exchange.

Could be some benefits to shareholders - possible increased liquidity, more awareness/higher PE multiple - more accurate valuation.

I guess we will see what happens. They are just looking into it at this stage...

thereslifeafter87
26-10-2004, 05:58 PM
Announcement out today.

UOS has acquired a development site.

Will construct 2,200 residential developments and an adjoining commercial park over the next 7 years.
Construstion expected to begin in September 2005.

They paid $17,000,000 and will pay another $10,000,000 to satisfy outstanding creditors of the acquired company on commencement of construction activity. Will be funded by internal cashflow and some borrowings.

Geezus.

Thats one huge development.

GladiatorNZ
26-10-2004, 07:00 PM
For all the reasons mentioned by Cantab and Dimebag, if two companies are identical, the only difference being that Company A trades in Malaysia and Company B trades in Australia, Company B should always trade at a premium. This because of the lower risk profile (especially lower regulatory risk). How much of a premium is debatable.

For myself,I do not understand the Malaysian property market so am reluctant to invest. Is Malaysia's property market on the upper or downer?

I'd also mention that the Directors seem to pay scant regard to listing rules. If memory serves, they were suspended for a time in the last year. That combined with low liquidity and high risk overseas venture would suggest that instos are unlikely to fall in love with this stock in the near future (which would result in the multi-bagger).

On the plus side I like the low gearing + recurring revenue from the investment property portfolio. That should help it ride through any downtimes.

EDIT: also insiders own a decent chunk of the company. How much I can't recall and can't look up because the Access Brokerage news feed was cut...

thereslifeafter87
26-10-2004, 09:39 PM
Do a google search for Malaysia +property +investment and you'll find a lot of info.

Malaysian residential property has been on the increase, but hasn't had the massive boom experienced in Aussie.

The coy was suspended from trading for not furnishing its annual report on time from memory.. Hardly a hanging offence.

I'd personally rather they spent more time on the business and less time on presenting their results to the public so I don't really have a problem with that....

Low gearing.. Don't you mean no gearing?
That will change now they have acquired this new development, but gearing ratios will still be incredibly conservative.

2,200 units at a price of $27mill = $12,272 per unit...
Lets assume each unit costs $60,000 to build (I really have no idea of the actual cost, but that sounds about right.. maybe even overly conservative - houses in NZ are built for that by developers) 2200 x $60,000 = $132,000,000.

so, total cost of development = about $160,000,000.
They can easily raise that at quite a conservative gearing ratio (on existing assets) of about 1:1 or 50% debt/equity - assuming no reinvestment of cash flows as stages of the project are completed, and as other developments are completed.

Add interest costs @ say 12% (to be conservativish again) $160,000,000 x 1.12 = 179,200,000

So we have a total cost of development including interest of about $180,000,000. Lets make it $200,000,000.

2,200 units multiplies by a sale price of say..... $200,000?
2,200 x 200,000 = 440,000,000 total revenue.

Development to start in september 2005, that is, one year from now. The board says it will provide returns over the next 7 years, so say returns spread over six years.

440,000,000 - 200,000,000 = $240,000,000 total profit
spread over six years 240,000,000 / 6 = $40,000,000 per year.

That represents a massive increase in year on year profitability for this company. On a PE of 4 that would give UOS a market cap of $160,000,000. on a PE of 8, $360,000,000.

A profit of $40mill = EPS of about 60c. On a PE of 4 thats a share price of $2.40. On a PE of 8, thats a share price of $4.80.

Say they pay half their earnings in dividends... then we get a dividend of 30 cents a share.... UOS shouldn't yield more than 10% that would just be silly, so thats a share price of $3.00

All this by 2006.

My assumptions may not be entirely accurate. But you get the drift.

In fact, after exams Im doing some in depth research into what the residential dwellings they expect to build will sell for, and what development costs are likely to be.

This company just went from being a value play to a growth play.
I love it when that happens (see ATR thread).

I really shouldn't be posting all this, I might have to buy some more some time soon. And with this level of illiquidity that could be difficult if you all read this post, think its gonna turn to gold and UOS does turn to gold.

BTW, THANKYOU PackersOldKidney!

P.S. in my calculations I didn't include any possible return from the commercial development.

thereslifeafter87
26-10-2004, 09:41 PM
I'm expecting an attack for ramping about now Cap.

thereslifeafter87
27-10-2004, 10:36 AM
Gladiator,
The main board says you posted something, but its not showing up on the thread... What did you say?

GladiatorNZ
27-10-2004, 12:07 PM
The edit at the bottom of my last post about insiders.

I should also add that I have seriously looked at buying OAS, but I'm going to do some more research on the Malaysian property market before jumping in. The company noted that rental yields are falling (in spite of a buoyant economy), which would suggest to me overinvestment in new developments. But I'm not sure because, as I've said, I don't know enough about that market.

Anyhow, slightly off topic, can you suggest a good place to get company news? Ever since Access brokerage went down I haven't been able to look up older news. So I've probably got a few things wrong in the last post working from my memory of a month ago.

thereslifeafter87
27-10-2004, 12:52 PM
Direct broking provides a pretty good service - just links straight to ASX announcements on the asx web site.

robbo
07-12-2004, 02:04 PM
UOS Australia (UOS)

Should really tke this opportunity to be seen to join the illustrious company of thereslife, Dime-Bag, Cantab, PSK(Go: Packer-Man !!); sauce and mark100

By reminding UOS devotees,followers & fans and.... general: "from-the-sidelines-viewers" that:

(1) This Great little Medium Sized company--UOS-- has now mooted and looks lkike dual listing on THE Malaysian Stock-Exchange--err that won't hurt Investor support AT ALL; I would have thought !--IMO ;);) [8D][:p]

(2) [navy]Incredibly Heavy and consistent and regular' [yellow]Director Buying and re-investing of their unfranked dividends straight back into the UOS Security --Surely a v.good omen :)[:p]:)

(3) Check out the Depth at present: you can hardly get any stock...and with EPS growth, Return on Equity(ROE); profit margins and revenue growth at massive proportions--it;s no real wonder I guess....the arithimetic is quite compelling whichever way one slices and dices these numbers...and the Price to NTA(Net Tangile Assets) says this UOS is really a steal !!!

(4) Not a diluted stock at all :)[^][^](onlyy 67.9 million shares--consequently very low PE of under 3--!!-- which means potentially very UNDER-Valued.

(4) Do note also that UOS is NOT just a Property Devlopment play: it ahs a large part of its regular earnings(which from memory were a [b][size=2]massive $27 millions dollars --for their(UOS)INTERIM half year only!!-WOW-- underwritten by long term commercial lease RENTAL INCOME--both Office and Shops---and what is more their is quite a demographic spread with UOS porerty: from the cheaper quality end of the Malaysian market trru to medium density and Top end ***** (five star) as well--which nicely spreads risk.....

---Interested subscribers--in UOS should perhaps consider viewing their(UOS)excellent & informative: UOS: Annual Report; up-loadable on Adobe from the ASX announcements for UOS--posted through ASX Site-- by UOS; in early April of this year-04: ie: on 2/4/04 ---and look at the Photos of their pre-sold- [:p]:)- and/or leased Property :)[:p]:) portfolio--it is a very detailed, and comprehensive/impressive portfolio--especially when one notes the high %age of pre-sales/sold and/or leased of their(UOS) massive collection of residential and commercial properties....

You will also see on the ASX site the very very high amount of times; Directors just keep re-investing in their own company (UOS) !! mihgt be in anticiaption of the next Report and/or Dual listing in Kual Lumpa for UOS !! :)[:p]:)

Check it out for yourselves and do read Dimebags & Cantab's & therelife's post on this thread--very good indeed--IMO[8D][^][8D]

Kind regards,
Robbo:)[8D]:)

robbo
08-12-2004, 04:28 PM
UOS Australia (UOS)

UOS Up 4.5%

UOS --
Up another 4 and a half %% Per-Cent today...and still looking at UOS financials and The depth; feel that UOS is going to do nice things, and keep steadilly trundling upwardly;...IMO.... from where I sit...and those UOS fundamentals, yep......hmmm...Yes...>>...I do like this stock very much indeed actually...[^]

Robbo:)

David Hardman
24-02-2005, 06:49 PM
Full year just out - Makes for good reading

Profit up, Revenue up, EPS up, Divis up, Outlook - extremely favourable

***


United Overseas Australia Limited Announces Increased Profit The board of United Overseas Australia Limited today announced a profit of $35.4 million for the financial year ended 31st December 2004. This profit is subject to final audit closure but the board is not aware of any likely variations to this figure.

The profit for the year from operating activities was $35.7 million. After taxation and minority interests the profit was $21.2 million, an increase of $10.7 million or 101.8% when compared with the 2003 result.

Gross revenue from operations was $76.08 million, an increase of 22.4% over last years revenue of $62.13 million.

Earnings per share for the year ending 31st December 2004 was 32.2 cents, an increase of 15.3 cents over earnings of 16.9 cents per share for the same period last year.

Final Dividend
The directors have declared a final dividend (unfranked) of 5 cents per share (2003 final dividend 3 cents per share) making a total dividend of 7 cents per share for the year, an increase of 75% or 3 cent per share over the total dividend of 4 cents per share for the year ended 31 December 2003. The dividend will be payable on 26 May 2005. The companys dividend investment plan will operate in respect of the declared dividend.

Finance
Net operating cash flow decreased by 35.6% from $28.06 million to $18.07 million. This is due in the main to the higher payment to suppliers for completed project during the year. The operating cash flow has been adequate to fund the groups continuing operations and assist in the acquisition of property for future projects. The net tangible asset backing per ordinary security is $2.43 per share as at 31 December 2004 compared with $2.13 as at 31 December 2003. The groups ratio of net debt to equity changed from 7.41% as at December 31st 2003 to 1.88% as at 31st December 2004.

Operations
Property Development For the year under review the groups gross revenue from property development operations was $51.91 million, an increase of $4.51 million or 9.5% over the 2003 results of $47.40 million. This segment of the groups operations contributed $28.5 million to the net profit result achieved for the year.


Property Rental
Gross rental of $9.08 million was received during the year. This is a 9.53% increase on the previous years results of $8.29 million. This increased result is due in the main to higher occupancy rates.

Future Outlook
The overall continuing outlook for the group is extremely favourable as the Malaysian economy remains buoyant and the demand for property particularly by the middle income socio economic sector remains high. The directors have as previously announced identified parcels of land for future development and expect to achieve comparable results in the forthcoming reporting periods. It is not expected that there will be any material changes in the performance of the rental division in the coming year. There are no major tenancies that terminate in the next reporting period and with a relatively high demand for good rental properties, it is expected any minor vacancies will be filled within a reasonable time of the vacancy occurring.

tommy
24-02-2005, 07:18 PM
Thanks Dave for posting the latest results!

Very impressed, should push up the stock price in the days ahead[:p] UOS has been extremely undervalued in my opinion, hope a rerating takes place soon.
Just wish that this stock would improve in liquidity... zero trade is not uncommon for UOS!!!

thereslifeafter87
25-02-2005, 01:08 PM
The biggest selling point for this stock is that NTA is around $2.40, while the SP is only $1.20ish!

tommy
01-04-2005, 12:00 PM
Hi all UOS holders,

Annual report out, here is the link boyz:

http://stocknessmonster.com/news-item?S=UOS&E=ASX&N=286331

Pretty impressive figures, shame the market doesn't react much to this one.

tommy
11-05-2005, 11:41 PM
Everyone seems to have forgotten about this little gem... little activity at UOS lately, but a small announcement was released today:

Is this baby ever going to wake up? Yawn.
______________________
http://stocknessmonster.com/news-item?S=UOS&E=ASX&N=289664

United Overseas Australia Limited
MEDIA ANNOUNCEMENT
LAND PURCHASE

The company has executed a Sales & Purchase Agreement to purchase to adjoining parcels of commercial land in Bangsar.

Bangsar is a prestigious suburb of Kuala Lumpur and is located 15 minutes from the city centre.

The land which is 7150 square metres in area is immediately adjacent to the Bangsar Light Rail Station (LRT), a busy and central station used by commuters into the city.

The acquisition cost was AUD$8,600,000. This will be financed by internal funding and bank debt.

It is intended to develop a retail and commercial complex on this site to complement the present LRT station complex and is expected to take 3 to 4 years to complete.

David Hardman
12-05-2005, 10:40 AM
UOS release so little information and when they do its very brief. (eg the latest announcement)

It's a company hard to get excited about but I still hold a small parcel in my super fund.

thereslifeafter87
12-05-2005, 01:26 PM
THis company has held up much better than my other holdings during this market downturn.

Probably because the price was so low it couldn't go much lower.

The price will rise on earnings announcements and the proposed listing of the development business could have an impact.

I would probably prefer it if they sold their investment properties and returned the cash to shareholders, using some of it to fund their property investment.

robbo
13-05-2005, 06:42 PM
UOS

Gday Thereslife....

So you did not agree with the Land Purchas in KL ???

Thought it was quite contrarian of them...actually and was a probably a Super Good Deal...

One thing about this firm is that they do "stick to their own knitting"...which is very good IMO...

Really Love this Stock....and do own it...but it has to be a Super Long Time Frame...IMO... 5 year plus Horizon coz when//if: the "Trend is your Friend..."....then the Market will never Dance a Tango with you...IMO... on something like UOS when Property is perceived as it is in Oz right now....ie: see Sunland and City Pacific etc....(let alone Village Life (VLL) ---A Super Big ouch to holders of VLL !! ---[}:)]

Although I note, in passing ...that with VLL, it did a Real yo-yo ... Classic Triple Somersault ....followed by a taut and terrific Beautiful Spike and excellent re-entry -- followed by the real "in the know - Pro" ..>>> Share - Traders all time Fave...... ie: a very nifty perfectly timed; Dead Cat Bounce Today !! [:o)][:o)]

And back briefly to UOS...I think the Punters wree hoping to see some development on the KL dual listing Stock Exchange Listing developmnet...but only deathly silence there I'm afraid.....

Of course the other theroy which I probably on reflection favour with UOS is that basically, with around 80% plus of the equity/shares tied up with the directors its a nice vehicle to get their dividends out Tax Free...as they do tend to pay excelent Fully Franfurt divies....of around 6% plus specials adding another 3-4 % most years !!

.......which means on my calcs at least, that the directors are probably taking out around: $2.5 -$3.4 millions per annum b/w them fully franked ...which is nice work if ya can get it...as they say...

Anyway..thereslife there's a penny for the old thoughts...

Kidn Regards,

Robbo :) :)

thereslifeafter87
15-05-2005, 11:01 PM
Robbo,

I think you misread me.

I would prefer they sold their investment properties.

The land purchase they announced was good news - it is not for rental investment, but for future development.

I don't see why it is Contrarian though... They are just doing what they do - developing property.

The fact that share prices are falling for no apparent reason isn't going to affect their business strategy.

tommy
16-05-2005, 03:51 PM
Is this bad news??
A bit confused, what will be the impact on UOS?
___________

http://stocknessmonster.com/news-item?S=UOS&E=ASX&N=289985

United Overseas Australia Limited
MEDIA ANNOUNCEMENT
PROPOSED MALAYSIAN LISTING

The Company announced on February 25th 2005 that it had resolved not to pursue the listing of the groupfs development division on the Kuala Lumpur Stock Exchange.

At the same time it advised that studies were to be carried out to investigate the feasibility of having the groups investment properties placed into a Real Estate Investment Trust for listing under the regulations as recently promulgated by the Kuala Lumpur Stock Exchange.

As a result of these studies the Directors have requested that the companyfs corporate advisors, AmMerchant Bank Berhard, prepare a draft submission for lodgement with the Kuala Lumpur Stock Exchange for perusal and conditional approval.

AmMerchant Bank is the investment and corporate merchant banking division of the AmBank Group, one of the largest banking groupfs in Malaysia.

Certain matters regarding this transaction may possibly require Australian Stock Exchange and or shareholder approval and the AmMerchant Bank submission will be the basis to further inform shareholders and liaise with the Australian Stock Exchange.

For further details contact Alan Winduss on 08 9381 9266 or 0412 949 225.

David Hardman
16-05-2005, 05:04 PM
Its just really occured to me...

United Overseas Australia really is a ridiculous name for this company.

What the hell does it mean?

thereslifeafter87
16-05-2005, 06:10 PM
I hadn't seen that announcement...

That's GREAT news!

If they list their properties in an REIT they should receive a bunch of cash.. Cash which can then be paid out in special dividends, or reinvested into profitable development opportunities. They can also maintain a stake in the REIT.

I wonder why they decided not to list the property development co...
Perhaps it was thought there wouldn't be a market for the shares at the price they wanted...

robbo
16-05-2005, 10:46 PM
UOS

Good point re. the REIT Thereslife...

and well done re. the announcement news spotted by Tommy. I HAD seen the KL not listing news, but had totally overlooked the REIT bit, which given that this whole vehicle is probably a goodish way to distribute profits thru the frankeed divies system, then YEP,

.... Surely cannot complain and so YES I do like the sound of the whole deal...


Kind Regards thereslife and Tommy & Dave,,

Robbo :)

tommy
16-05-2005, 11:08 PM
Hi Thereisafter, Dave, Robbo and other UOS holders,

Can someone please kindly explain what exactly REIT is? What is the significance in comparison to listing on KL stock exchange?

thereslifeafter87
17-05-2005, 01:30 AM
REIT is an acronym for "REal Estate Investment Trust".

Its basically a unit trust that invests in property for rental income, which is then either paid out to unit holders or maintained in the trust for future property purchases, depending on the powers given to the trustees by the trust deed.

Establishing an REIT will have a similar effect to an IPO of the property investment arm of the group.

Dimebag
17-05-2005, 11:10 AM
TLA87

I would imagine that it is more likely UOS will "spin-off" a REIT, giving existing UOS holders a pro-rata shareholding in the new group, rather than onselling the properties into a REIT funded by other investors.

As such, there will be no cash windfall to UOS, but I do agree that it is good news as it should enable UOS to more readily unlock the underlying value of these property assets and narrow the aggregate price:asset backing ratio (currenly around 50%!).

Cheers
Dimebag (hold a few UOS in some accounts I manage)

tommy
17-05-2005, 02:39 PM
Thank you for the explanation thereslifeafter87 and Dimebag.

Now that I know what REIT is, let me ask another question...

Why did UOS decide not to list its development division on KL stock exchange, but decided to look into the possibility of having its investment properties placed into REIT for listing?

Considering that UOS is a property development company, listing of the development division surely would have been better, right? Or, if they chose to, couldn't they have done both (i.e. list its development division AND REIT)??

tommy
24-08-2005, 02:18 PM
Does anybody know when UOS's financial results will be announced? Perhaps I am the only one still holding on to this dormant stock... What happened to the REIT?

thereslifeafter87
10-01-2006, 11:55 AM
UOS has raised a large amount of cash by listing an REIT on the KL stock exchange.

It's 3 large commercial properties have been placed into this vehicle, with UOS retaining a majority interest in the units of the REIT.

The REIT has financed the purchase of the properties through the issue of units, and by taking on debt.

The end result is that UOS gets a big fat wad of cash to use in future developments, frees up a whole bunch of capital that was earning a substandard return, and is now making a large return of capital to shareholders - 15cps (yes that's more than 10% of the shareprice).

UOS is now being quoted ex-return.

This little gem is still heavily undervalued even ex-return (its pre-return equivalent sp = 145 at current prices), and it pays a good dividend.

It is sitting on truckloads of cash, no debt, and has a strong landbank for future development, with a track record of successfull development projects.

I love it when I'm right :)

thereslifeafter87
10-01-2006, 11:58 AM
An announcement i didn't see made on 23/12/05: UOS have retained a 65% equity holding in the trust, the IPO was oversubscribed by 8.5 times. YES THAT's RIGHT 8.5 TIMES, and the institutional book build closed at a 19% premium.

Not too shabby.

thereslifeafter87
10-01-2006, 12:08 PM
NTA = around $200mill.
Market cap = $88mill.

What a screaming BUY.

thereslifeafter87
11-01-2006, 12:56 PM
quote:Originally posted by thereslifeafter87

NTA = around $200mill.
Market cap = $88mill.

What a screaming BUY.


To clarify, that NTA figure is after the capital return is taken into account.

Lizard
11-01-2006, 01:58 PM
Hi TLA87. I've been watching this one for a while and quite tempted. Value looks great, but the spreads and low liquidity make me nervous...

thereslifeafter87
11-01-2006, 07:57 PM
You've got a decent margin of safety.

The illiquidity doesn't bother me, cos I know I'll eventually be able to sell at a good price. It's trading at less than half NTA and pays a good dividend.

tommy
11-01-2006, 08:16 PM
Agree with you all that UOS is a great undervalued stock, but due to my impatience, unfortunately I had to sell out a while ago (the opportunity cost was getting too high!) But if you are willing to wait for the long term, this stock is IMHO a safe bet. It's not a matter of IF but WHEN it will get re-rated, so good luck to all holders

:)

thereslifeafter87
13-01-2006, 01:20 PM
Tommy - that's why you should look at what the company is doing, rather than what the shareprice is doing. That is unless the sp is in a free-fall in which case there is usually someone in the know :)

cloggs
27-01-2006, 01:10 PM
Anyone know why the share price fell 15cts the other day.

thereslifeafter87
06-02-2006, 09:36 AM
Because someone decided to sell at 15 cents below the previous trade price. [:p]

haha,

Seriously, it's probably due to the 15c return of capital being reflected in lower bid prices.

thereslifeafter87
03-04-2006, 02:50 PM
UOS up to $1.58 from around $1.20 a few months ago on the back of strong full year results.

The return over this period included a 15cps capital distribution.

This company has a diverse base of developments in Malaysia, with around $300 million of developments in the pipeline (my estimate based on disclosure of developments going forward and historical disclosure of sales revenue from specific types of projects).

Over the last year, UOS achieved a net profit of $29.69 million on revenue of $60.96 million.

This converts into EPS of 42.4c, giving a PE of 3.74x.

UOS also pays a 7cps dividend (unfranked).

NTA is $2.24 per share.

This is a great little company that has done well for me.

thereslifeafter87
04-04-2006, 12:36 PM
bump

thereslifeafter87
11-10-2006, 02:39 PM
Current market cap at $1.60 = 108.5mill

Half year EPS of 13 cents.

The kicker is the incredible margin of safety.

UOS currently has NTA of $168mill compared to its market cap of $108.5mill. UOS has no debt.

$60mill of the NTA is in cash.

The NTA is conservative also. Compare UOS's inventory treatment with fellow developer CPK's.

UOS' inventory is valued at cost, plus a small amount of development cost capitalised (30mill/7mill), whereas CPK's includes $100mill of cost and another $100mill of development costs and interest expenses capitalised.

Also, the properties in the REIT in which UOS holds a significant stake appear to be valued conservatively. If you look at the rental returns achieved in the msot recent half year, they seem to be yielding 10-12% on an annualised basis. This provides significant scope for upwards revaluation.

The full year result is likely to be down on last years due to timing of developments, however, they are well poised for future growth with a significant pipeline of developments.

UOS has a project underway involving development of a 33 storey commercial building, with an expected completed value of $120mill. UOS has a captive REIT to sell this building into on completion.

Assuming UOS's usual net margin of 30-40% (we'll take 30% to be conservative), that's profits of $36mill deliverable in 2008.

Other ongoing developments will provide revenue over the next two years while activity gets underway on their major 2,200 residential unit + 300,000 sq metre commercial park.

Assuming terraced houses are built, at an average sale price of $130,000 (UOS generally gets between $130k and $140k for terrace houses) that's 286mill revenue from the residential component of the project alone.

Assuming a conservative 30% margin we get $85mill in profits spread over 5 years, starting in 2008 - $17mill per year.

On this basis there is plenty of money to come into this company.

I'm quite excited :-)

abucus
03-01-2007, 12:50 AM
Well done LA87 and co. for picking this one up.
I nearly went in myself this morning at $1.95 but decided to hold off.

It only hit my radar on the weekend, i wish i had seen it at $1 like yourselves. I guess my radar needs a little fine tuning. :)

Are you guys still holding ?

Reason i held off are :

Dividends not franked for Australia.
Return on rental investments good but not great.
Unsure on the continued bouyancy of the KL stock market.
Many directors and managers that are major shareholders are also over 65 and may be looking to start getting money out of the company.
Illiquid stock (but at $1 buy - who cares )

Apart from that i agree with you guys, this company has a great track record of reinvesting profits and generating a consistant 20% pa increase in net assets. The model looks really good and there is a lot of stability there with the increasing income stream and continued investments to develop in this vertically structured property play. It is a great exposure to an Asian success story that hopefully can be a new Hong Kong.

I wish i had picked it up at $1 but at $2 the upside has been changed from great to good IMHO and i have to agree with DavidRob at the moment.

Good luck and for Aussie residents a question - does the lack of franking credits deter anyone or is the expected capital gain the main focus ?

Thanks, and as Tommy says - respect. :D

lacmur
03-01-2007, 05:30 PM
quote:Originally posted by abucs



Good luck and for Aussie residents a question - does the lack of franking credits deter anyone or is the expected capital gain the main focus ?



I'm a very happy long term holder. Picked them up around 85-90c. I don't think the franking issue is that big a deal. They certainly pay a dividend but this is much more a capital appreciation story than an income stream for me.

Due to illiquidity I've kept my holding relatively small but with the chart looking as good as it does I've been tempted to add to my holding.

Abucs your post looks more like an advertisement for buying into this one. Sure, I note your caveats but I think UOS is an excellent way to gain direct exposure to a very positive property story in Kuala Lumpur. I can only see more positives over 2007 and beyond.

abucus
03-01-2007, 07:37 PM
Thanks lacmur. I wish you continued good luck.

David Hardman
30-05-2007, 11:56 AM
Got this one in my superfund. Very nice long term hold.

Great announcement out a few days ago.

Buying back 10% of the share and listing on the Singapore Exchange.

In regards to the SGX listing

"The directors are firmly of the opinion that such course of action will greatly benefit in the
companys share price reflecting the value of the companys Asian asset base."

thereslifeafter87
30-05-2007, 02:52 PM
The price is at about NTA now or maybe slightly above.

It will be interesting to see whether they will proceed with the buyback above an NTA level, or whether the directors will be selling any shares into the buyback.

If its just a straight out onmarket buyback with no ceiling, the lack of liquidity could see the price go to $4 or $5.

The company has excellent prospects going forward, with two office buildings due to be completed by 2008 with an expected completion value of at least $300 million, and a captive REIT available to sell the buildings into.

Minimal debt on the "actual" balance sheet - the consolidated balance sheet includes debt of the captive REIT.

OneUp
30-05-2007, 03:35 PM
Thing is they said they'd buy "up to" 10% of the shares on issue. I believe there are rules against price manipulation through buybacks, so it's unlikely the price will surge 60% to $5 on the buyback alone.

In the end they may well buy back very few shares, given the extreme liquidity problems in UOS. The buy back announcement has already had the desired share price re-rate effect, afterall, and unless the directors are selling their own shares in the buy back you'd hope they wouldn't be too keen to overpay and destroy shareholder value.

The academic evidence on buy-backs suggests they do have an affect on share price but only modest.

David Hardman
31-05-2007, 04:03 PM
Details announced

On market buy back of up to 7.5m shares commencing 5 June.

The 52week daily avg volume is 8,612

Can't see them buying many.

OneUp
31-05-2007, 09:49 PM
Bid 2.85, offered 3.50

I don't know of many $200m companies with this kind of spread. If they were serious about actually buying back stock they would make an off market pro-rata offer to all shareholders.

thereslifeafter87
01-06-2007, 01:45 PM
quote:Originally posted by OneUp



The academic evidence on buy-backs suggests they do have an affect on share price but only modest.



That's definitely correct in the case of companies trading above NTA, but when a company is trading below NTA a buyback can cause significant value to be realised. The company is effectively buying $1 for less than $1.

thereslifeafter87
01-06-2007, 01:48 PM
quote:Originally posted by OneUp

Bid 2.85, offered 3.50

I don't know of many $200m companies with this kind of spread. If they were serious about actually buying back stock they would make an off market pro-rata offer to all shareholders.


Yeah, I'm undecided about the impact the buyback will have (apart from that it already has had and why they have adopted this strategy.

A pro-rata offer to all shareholders would return capital, but it's questionable whether this would have much impact on the market price - unless they offered at well above current market.

In the past they paid a special dividend of 15cps when they had excess capital after floating their investment properties into their REIT.

OneUp
01-06-2007, 02:16 PM
Assuming the price they offered to current shareholders was less than the intrinsic value of the shares, then per share value for those who held on to their UOS would be greater.

thereslifeafter87
01-06-2007, 06:03 PM
exactly.

cloggs
01-05-2011, 09:33 AM
Last post in 2007 which is strange because this share has done well. They had a 10 for 1 split a few years back and for the last couple of years the share price sat at 30 cts, but in March it started going up and now sits at 55cts, and the only reason I can see is because they are doing an IPO on the Bursa Malaysia. Anyone have any other knowledge?

mamos
01-05-2011, 03:27 PM
Good company.

I bought sub 20c but never filled completely so had to move on.

OldRider
02-05-2011, 10:11 AM
Shareprice has risen recently without much news, IRR over last 4 years 32.5%, pays regular dividends, probably lower than other ASX property investment companies.
Involved in property developementand investment, retaining some of its developements for income, whilst ASX listed this is mostly is done in Kuala Lumpur.
Only 401 shareholders with 95% of shares owned by top 20 holders.
It has survived the GFC seemingly in better shape than most ASX property developement companies and with recent increase has outperformed
other ASX property companies I monitor.

cloggs
23-12-2014, 02:10 PM
UOS announce profit guidance for the year is A$4 million down from A$98m to A$94m for the year to 31 Dec. This is due to the timing of completion of projects for the last quarter.

A$94m / 496,767,124 = A$0.189. @48 c/s gives a PE of 2.5

Am I getting a decimal wrong?

macduffy
23-12-2014, 02:27 PM
Your maths look right. Perhaps the market doesn't like the "quality" of the profit? Property revaluations, maybe? But then it's a thinly traded stock, presumably majority held by United Overseas Bank, Malaysia and the shareprice has never been much above 55c in recent times.

cloggs
23-12-2014, 02:36 PM
When I look under 'detailed' it gives the number of shares out that I used, under Reuters it gives a market cap of 233.5m at $0.48, indicating a similar number of outstanding shares. I'll have a look at their website.

It is a thinly traded stock that I've bought and sold a few times over the years. Every time I sold I ended owning a few left over that I had acquired through dividend re-investment, which keeps them on my radar. I have to say I've always done really well out of them.

cloggs
23-12-2014, 02:44 PM
You're right KW, the 3rd quarter report gives the number net of treasury shares as 1,430,988,000 which gives a profit of A$0.065 per share and a PE of 7.4. Still pretty good, not as spectacular as I first thought.

cloggs
23-12-2014, 04:19 PM
Yes, it's a bit of a worry that the Directbroking website and Reuters are that far out from the real figure and it shows that you have to go to the annual report and check.

The fact that these guys sometimes give updates quoting everything in Malaysian ringit and other times in AUD can be quite confusing too, but over the years I've always been impressed with how much they seem to be making in either denomination.

I suppose with the AUD going down there may be an exchange advantage with this company because all their business is in Malaysia.

macduffy
23-12-2014, 04:35 PM
I suppose with the AUD going down there may be an exchange advantage with this company because all their business is in Malaysia.

....... which raises the question as to why they're listed on the ASX?

:confused:

cloggs
23-12-2014, 06:08 PM
A few years ago they listed on the Malaysian exchange as well.

OldRider
24-12-2014, 08:38 AM
In 2007 UOS shares were were split 10 for 1, then in 2012 a capital return near to half of market value was made,
Both need to be taken into account in calculations

macduffy
24-12-2014, 10:27 AM
In 2007 UOS shares were were split 10 for 1, then in 2012 a capital return near to half of market value was made,
Both need to be taken into account in calculations

And the on-market buy-back a few months ago.

cloggs
31-12-2014, 07:32 AM
Over the last few days this has slowly gone up to 50c/s but on very small volume and the wide spread common for illiquid stocks - currently 47 buy 50 sell. Never understood why it is like that because it has always been a good stock to have for me.

OldRider
31-12-2014, 08:14 AM
From a quick look the top 20 holders own in excess of 95% of the shares.
Leaves a free float of only about 50 million shares