I recently purchased Wee Hur shares at $0.46 each, attracted by its low trailing price-to-earnings ratio and promising growth prospects.
On 13 Dec 2024, trading in Wee Hur shares was suspended pending an official announcement. Believing this to be positive news, I began investigating further to estimate the potential new share price when trading resumes.
In April 2022, Wee Hur Holdings sold a 49.9% stake in its Australian Purpose-Built Student Accommodation (PBSA) business to GIC, Singapore’s sovereign wealth fund, for approximately AUD 567.9 million. This transaction aligned with Wee Hur's strategy of partnering with institutional investors while maintaining operational control of its student housing assets.
In October 2024, the US multifamily fund Greystar expressed interest in acquiring GIC’s PBSA portfolio in Australia for AUD 1.6 billion. However, Wee Hur clarified that its PBSA assets were not part of this transaction, as they remain fully owned and operated by the company.
Speculation has since emerged that Wee Hur might be negotiating a deal to sell its entire remaining PBSA stake to Greystar.
If such a deal materialises, what could be the realistic price?
The following are my detailed calculations:
|
April 2022 |
Aus (m) |
% of share |
|
GIC |
567.9 |
49.9 |
|
Wee Hur |
570.17615 |
50.1 |
|
October 2024 |
Aus (m) |
% of share |
|
GIC |
1600 |
49.9 |
|
Wee Hur |
1606.4128 |
50.1 |
|
Current Price |
0.475 |
|
|
Current P/B |
0.652 |
|
|
NAV/Share |
0.728527607 |
|
|
|
Aus (m) |
S$ (m) |
|
Current mkt cap |
|
436.64 |
|
Current net asset value |
|
599.3458526 |
|
Increase in net asset value |
1036.2367 |
891.1635391 |
|
% increase in net asset value |
|
148.69% |
|
% increase if all go to mkt cap |
|
204.10% |
|
New NAV/Share |
1.811770677 |
|
|
New P/B |
0.262174461 |
|
|
Rolling EPS |
0.203 |
|
|
Current TTM P/E |
2.339901478 |
|
|
New P/E based on new price |
6.467313146 |
Based on my calculations, the fair value for Wee Hur could range from S$1.18 to S$1.44, depending on whether the revalued asset value is fully reflected in the market capitalization or added to the net asset value. Using the midpoint of this range, the target price would be approximately S$1.31.
I feel like a generous Chinese New Year angbao bonus has arrived a bit early for
me.
Superphang
http://superphang.blogspot.sg
