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  1. #431
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    Quote Originally Posted by Snoopy View Post

    The ultimate owners have no incentive to realise imputation credits because they are overseas owners. Overseas tax authorities do not recognise imputation credits, so they are of no value to the Kwek family.


    SNOOPY
    SNOOPY - thanks for taking the time to comment on a share you don't hold. Much appreciated.

    However, I'm not sure if your comment on imputation credits being worthless to the ultimate holder is entirely correct. It will depend on where they are located.

    If a dividend carries full imputation credits then the supplemental dividend means that the overseas shareholder will receive the same amount after non-resident withholding tax as they would have received had there been no supplemental dividend and no withholding tax. I.e if a company pays a 10 cent dividend the shareholder will receive 10 cents. If there is no imputation credits there will be no supplemental dividend and non-resident withholding tax will be deducted at the relevant rate (which varies depending on the residence of the recipient). In my own case (Hong Kong), non-resident withholding tax is 30% so an unimputed 10 cent dividend would end up being 7 cents in my hands.

    Overseas shareholders then have to consider what tax they pay in their own jurisdiction. Some countries do not tax overseas dividend income or do so at quite low rates.

    I have not looked into the location of the upstream holding company from MCK, but if it is in Singapore (where the Kwek family are headquartered) then my read of this guide from Deloitte suggests that they would not have to pay any Singapore tax on imputed dividends from a NZ company but would have to pay 15% on dividends with no imputation credits.

    "Foreign income remittances in the form of dividends, branch profits, and services income derived by resident companies are exempt from tax, provided the income is received from a foreign jurisdiction with a headline tax rate of at least 15% in the year the income is received or deemed received in Singapore and the income has been subject to tax in the foreign jurisdiction. Foreign income that has been exempt from tax in the foreign jurisdiction as a direct result of a tax incentive granted for substantive businessoperations carried out in that jurisdiction will be considered as having met the “subject to tax” test."




    https://www2.deloitte.com/content/da...ights-2020.pdf

    Happy to be corrected on all or any of this - I only know how it works for me as a Hong Kong resident.

  2. #432
    always learning ... BlackPeter's Avatar
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    Quote Originally Posted by traineeinvestor View Post
    SNOOPY - thanks for taking the time to comment on a share you don't hold. Much appreciated.

    However, I'm not sure if your comment on imputation credits being worthless to the ultimate holder is entirely correct. It will depend on where they are located.

    If a dividend carries full imputation credits then the supplemental dividend means that the overseas shareholder will receive the same amount after non-resident withholding tax as they would have received had there been no supplemental dividend and no withholding tax. I.e if a company pays a 10 cent dividend the shareholder will receive 10 cents. If there is no imputation credits there will be no supplemental dividend and non-resident withholding tax will be deducted at the relevant rate (which varies depending on the residence of the recipient). In my own case (Hong Kong), non-resident withholding tax is 30% so an unimputed 10 cent dividend would end up being 7 cents in my hands.

    Overseas shareholders then have to consider what tax they pay in their own jurisdiction. Some countries do not tax overseas dividend income or do so at quite low rates.

    I have not looked into the location of the upstream holding company from MCK, but if it is in Singapore (where the Kwek family are headquartered) then my read of this guide from Deloitte suggests that they would not have to pay any Singapore tax on imputed dividends from a NZ company but would have to pay 15% on dividends with no imputation credits.

    "Foreign income remittances in the form of dividends, branch profits, and services income derived by resident companies are exempt from tax, provided the income is received from a foreign jurisdiction with a headline tax rate of at least 15% in the year the income is received or deemed received in Singapore and the income has been subject to tax in the foreign jurisdiction. Foreign income that has been exempt from tax in the foreign jurisdiction as a direct result of a tax incentive granted for substantive businessoperations carried out in that jurisdiction will be considered as having met the “subject to tax” test."




    https://www2.deloitte.com/content/da...ights-2020.pdf

    Happy to be corrected on all or any of this - I only know how it works for me as a Hong Kong resident.
    Interesting contribution - thank you.

    Never thought that NZ Imputation credits could be of interest for foreign shareholders.

    And yes, you are right - the ultimate majority owner of CDI is sitting in Singapore, however - the CDL dividends go first to MCK (NZ). The MCK (NZ) dividends go to MCK (UK) - MCK (UK) is then owned by the Singaporean City Development (CDL) ...

    No idea what would happen on this long way to NZ Imputation credits ...
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  3. #433
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    Good info people. Thanks.

    anyone willing to have a stab at the 2020 full-year numbers. I’m picking a net profit of $45m+ and 4c dividend. Fully imputed, of course.

  4. #434
    always learning ... BlackPeter's Avatar
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    Quote Originally Posted by podg View Post
    Good info people. Thanks.

    anyone willing to have a stab at the 2020 full-year numbers. I’m picking a net profit of $45m+ and 4c dividend. Fully imputed, of course.
    To be honest - NPAT is a quite irrelevant number for them, given that they easily can hide earnings in their landbank (and they do). I'd be quite happy with a NTA similar to last year (and the year before). Say NPAT around $35m. And yes, divie will be unchanged at 4 cents. Sure - sales might run a bit better but we don't know yet how their leases work out.

    More interesting is - will the value of their landbank increase or drop (if they didn't replace the sold land)? Can't remember any recent announcements about land purchases (which could point to a higher NPAT), but I don't think they announce all land purchases - i.e we don't know - yet.

    More interesting will be their new NTA (say 95 cents per share?) and really interesting will be the updated re-valuation value of their landbank (s. above):

    However - no problems with me if you are right : - whatever it is, I am sure they will do fine.
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  5. #435
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    Quote Originally Posted by BlackPeter View Post
    Interesting contribution - thank you.

    Never thought that NZ Imputation credits could be of interest for foreign shareholders.

    And yes, you are right - the ultimate majority owner of CDI is sitting in Singapore, however - the CDL dividends go first to MCK (NZ). The MCK (NZ) dividends go to MCK (UK) - MCK (UK) is then owned by the Singaporean City Development (CDL) ...

    No idea what would happen on this long way to NZ Imputation credits ...
    I hadn't done my homework and missed the bit about MCK (NZ) dividends going to MCK (UK) before ending up in Singapore. I'm not sure what the UK tax treatment is but a quick search for some free tax advice suggests that there would be considerable tax leakage. If so, I can't see CDL going down that route.

  6. #436
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    The MCK Operational Update issued today stated that their FY20 annual result would be released tomorrow Wednesday 17 February. It follows that the CDI annual result will also be released tomorrow, given the CDI numbers feed into MCK given their 66% shareholding.

    Assume it will have been a strong six month of sales, however the question remains how many of these are booked up to 31 December given that I assume sales aren’t recognised until title to subdivided sections is issued. So in addition the reported profit, a key for me is what locked in FY21 sales have been negotiated and also what is the market value of their land bank relative to book value. Also interested to see how big the cash balance is and how much of this is ear marked for shareholders verses additional land purchases.

  7. #437
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    You, and many others, will be looking at those very things, i'm sure. The forecast use of the cash balance in particular will provide a signal as to where CDL thinks the NZ property sector is heading. Given the record shortage of houses across the country, it may well be ... more of the same for CDL.

  8. #438
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    Steady as she goes result.
    https://www.nzx.com/announcements/367669
    At 31 December 2020, CDI’s shareholders’ funds increased to $257.1 million (2019: $235.5 million) and total assets also increased to $265.0 million (2019: $240.7 million). Net tangible asset per share (at book value) was 91.7 cents (2019: 84.5 cents).
    Last edited by percy; 17-02-2021 at 07:41 AM.

  9. #439
    always learning ... BlackPeter's Avatar
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    Quote Originally Posted by percy View Post
    Steady as she goes result.
    https://www.nzx.com/announcements/367669
    At 31 December 2020, CDI’s shareholders’ funds increased to $257.1 million (2019: $235.5 million) and total assets also increased to $265.0 million (2019: $240.7 million). Net tangible asset per share (at book value) was 91.7 cents (2019: 84.5 cents).
    ... and lets not forget:
    10.7 cents earnings per share (which makes it a PE of 9.9) and a fully imputed dividend of 3.5 cents;
    backward earnings CAGR (10 years) is 26 ... which makes companies like Ryman looking like their poor cousins ,
    and the market value of their land bank is $286.4m, - i.e. still $1.02 per share.

    While the asset value is not anymore higher than the share price, one still pays (at SP = $1.06) only four cents per share above asset value for a fast and still sustainably growing company in a future proof industry.

    Discl: happy holder.
    ----
    "Prediction is very difficult, especially about the future" (Niels Bohr)

  10. #440
    always learning ... BlackPeter's Avatar
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    ... but above all: Who would have thought that we (well, I) can use CDI's reports to learn new English words:

    from the chairs report:
    Shareholders should be pleased that CDI was able to achieve a result in 2020 which mirrored 2019
    especially in a year which, to put it mildly, was discombobulating
    I first thought that they didn't use the spell checker, but "discombobulating" apparently stands for "disconcerting" or "confusing".

    Need to include this word into my standard vocabulary ... "I am discombobulated" sounds so much better than the plain "I am confused", doesn't it?
    ----
    "Prediction is very difficult, especially about the future" (Niels Bohr)

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