Very glad I made time to attend Stamford Land AGM at the Klapson Hotel. I made off with these key takeaways that strengthens conviction to maintain buying:
- The company has goodwill in Australia–2 board members are awarded the Order of Australia—Does this translate into higher ability to negotiate with the policy makers? I think it does but the company needs to follow due procedures to get development permits. A development in Sydney is still pending governmental approval.
- Board will be forming a Strategic Taskforce to review and refresh STL's long-term strategy, e.g. continue to focus on 5 stars hotel or diversify into 3 stars hotel, premium property development or mass market. This strategic planning will coincide with many major elections and global events around the world (China, US, Australia elections, Outcome to the Eurozone Crisis...). Could floating some assets as a REIT be on the cards? OCK alluded that it is a possibility.
- Some shareholders urged the board to consider floating the portfolio of Australian hotels as a REIT to tap on SG demand for such stocks. However, there are tax issues to consider. Essentially, a REIT needs at least one SG property to enjoy some form of tax advantage. (Interesting, this is a point to consider in my selection of REITs).
- STL bought several 5 star hotels (with freehold land deeds) during the slump in Australia property, and the books still recognize these prime assets at their historical value that are much lower than current market rates. If the properties were to be revalued, this could boost stock price. Management shared conservative, ball-park & pull number from the air estimation that the properties should be worth 30 to 50% more than their book value. That’s a lot. (But as a retail investor, the question to ponder is how much of 'undervaluation' is already priced in by Mr Market?)
"Why you no have prezentations? You are a big company, you know? The other day, I went for a big company's (AGM), what was it... Errr... Ah! Metro (Holdings)! You know Metro? Very big company! They had presentation at their AGM. You no have presentation? I old man, I cannot read. Fine print (in the annual report), I cannot read."
There were other ludicrous questions & comments with the
only point being to waste attending shareholder & board's time. ("Can
you speak louder or not? I sit in this corner. Cannot hear. Speak into your
mike. What's your earning breakdown?) OMG! Why can I remember what the kuku
uncle said? He must have made an impression.
Image from wikipedia
A surprise came when an announcement was made for a female
ex-minister to replace a retiring Director Wong. Round of applause to Ms Lim Hwee Hua.
SI@SG has some nice posts on STL:SP in his blog Sustainable Income@SG
