Hang Lung Properties / Group - good Buy near $14, $20?

[drbubb]

I STARTED BUYING Hk10 again at below $20 (after selling at $26-27 in 2016)

Weirdly, Hang Lung (HK10) correlates well with SLV/ Silver prices ... 10-yrs : w/HSI : 12-yrs : w/GLD :

Hang Lung ... updated to 10/12 midday:

Symbol : Co.----- : Price-- : tBkVal: P-BV. : PE-R. : Yield% : Div. ? : Earn? :
87001  : Hui Xian- : #03.08 : # 4.71: 65.4% : 11.85 : 9.09% : #0.28 : #0.26 :
HK10-  : HL-Group: $19.50 : $62.87: 31.0% : 5.000: 4.10% : $0.80 : $3.90 :
HK101 : HL-Prop. : $14.24 : $30.59: 46.6% : 7.867 : 5.26% : $0.75 : $1.81 :
HK101 : @ target : $14.00 : $30.59: 45.8% : 7.734 : 5.36% : $0.75 : $1.81 :
HK778 : FortuneR : $ 8.67 : $14.07: 61.6% : 10.84 : 0.00% : $0.00 : $0.80 :
=====> Data-WSJ :

Hang Lung ... HLP/hk101 vs HLG/hk10 / all-data : 10yrs : 2018 : 10d hk10 101:

: 2018 Flipped : hk10 . 101 :

HK-10-etc ... update :

=

[drbubb]

Off Topic : Wharf & Henderson... & HK10

Wharf may now be a "development-oriented" version of HL

Chart : hk4 & hk12 ... update : w/hk10 :

Presentations: http://www.wharfholdings.com/en/investor/presentation

Aug.2018 : http://www.wharfholdings.com/sites/default/files/2018-08/Wharf 2018 Interim Results Presentation.pdf

[drbubb]

Did we see an important low in HK10 today (at $19.28?)

HK10 / HLG = 10d : 19.54 +0.04/ Open:19.52, High:19.54, Low:19.28, Volume: 2,689,113

Did some buying near the Lows, but think they might be retested soon, and may buy more

[hector]

Hang Lung looks like its falling right now - maybe towards support levels in the 17s.

Why do you think its correlated with silver/gold?

[drbubb]

Browse through. and look at the charts, and you will see that HK10 correlates better with SLV/ Silver than it does with HSI - bizarrely

... 10-yrs : w/HSI : 12-yrs : w/GLD :

[drbubb]

Two of my Favorite Asian property-related shares are Hang Lung & Shang

( I own HK10, but not SHNG yet )

HSI & PSEI, vs HK10 & SHNG ... update : since Nov. 2014 : 10d :

video: Hong Kong Is Growing Slowly, Says Hang Lung's Chan

Ronnie Chan, chairman of Hang Lung Properties, discusses retail in China, Hong Kong's economy, Hong Kong retail, how the U.S.-China trade war could impact his business, rising interest rates and Hong Kong's residential market. He speaks on "Bloomberg Markets: China Open" from the sidelines of the Bloomberg New Economy Forum in Singapore. 

> https://www.bloomberg.com/news/videos/2018-11-06/hong-kong-is-growing-slowly-says-hang-lung-s-chan-video

Major NEWS of 2018 for Hang Lung:

Hang Lung snaps up prime Hangzhou plot for US$1.7b/ 29 May 2018

HL's Largest single investment ever? 

The land is believed to be the most expensive plot for commercial project development in the capital city of affluent Zhejiang province, and one of Hang Lung’s priciest ever mainland acquisitions.
Total investment of 19 billion yuan is earmarked for the planned project, a large-scale commercial mixed-use complex, comprising a world-class shopping centre and office tower, the Hong Kong real estate major said late on Monday.
HK$ Rmb 19 Bn /6.93= US$ 2.74 Bn x1.13 = HKD 21.47 Billion (1.36B, 2.51B shs)
= HK$15.79 per HK10 share, & HK$8.55 per HK101 share

Hangzhou City, China's Manhattan > article

After 10 years of construction, Hangzhou, in East China's Zhejiang province, has rebranded itself as a quaint modern city.

HangLung : IR-news : SCMP :

[drbubb]

COMPARISON - Reported Dept. 2018

HLP is More than Malls in China

Hong Kong Property Leasing comprises commercial space, office and industrial assets, and residences and service apartments with a total gross floor area of about 642,000 square metre. Some of the more well-knows assets include Fashion Walk in Causeway Bay and Standard Chartered Bank Building in Central.

Collectively, total investment properties including those under development were worth about HK$156 billion as at 31 Dec 2017.

5. Valuation

According to its 2018 Interim Results, Hang Lung’s Net Asset Value is HK$ 31.9 per share. With a current share price of HK$ 15.58, it is being valued at a Price to Book ratio of just 0.48 times.

6. Peers Comparison

Hang Lung’s peers include China and Hong Kong property developers listed on the Hong Kong Stock Exchange, such as Henderson Land, CK Assets, China Vanke and Evergrande.

I extracted key metrics from Shareinvestor.com for comparison with its key peers, as shown in table below

Company	Market Cap (Billion)	Price to Book Value	Dividend Yield (%)
Hang Lung Properties	HK$70.07	0.48	4.81
Henderson Land	HK$181.3	0.61	3.77
CK Asset	HK$205.2	0.65	3.06
China Vanke	HK$280.9	1.75	4.17
Evergrande	HK$376.7	2.73	4.49

> OTHER: https://www.dbs.com/aics/pdfController.page?pdfpath=/content/article/pdf/AIO/042018/180409_insights_developers_boost_dividends.pdf

> LTcharts : charts

[drbubb]

Other / WHARF Co's / 1yr : HK4, HK1997

Continuation chart -

#1: HK-4 / xx ......... since 12.1.17 :

#2: HK-1997 / xx ... since 12.1.17 :

xx

Combined:

 

[drbubb]

Having fun... with the Hang Lung "Stock market predictor indicator"

I stumbled across this "indicator" by accident...

Hang Lung Properties (HK:101) trades in Hong Kong, and closes BEFORE New York stocks open.

Recently, it has been giving reasonably accurate predictions of how IWM / Russell 2000 etf will trade later

HK-101 vs IWM and SOXX ... HIS-10d : +HSI+UKX :

I have some ideas about why this is working, but I want to follow it for more days before talking about those theories

(added in Edit)

Longer term, the highs and lows in HLP lined up with some of the IWM turning points, but not all

HK-101 versus IWM and SOXX ... : weekly chart :

==

The Magnitude of moves was massively different.  And there was one big MISS on the Low in the middle

[drbubb]

HK Property Rents correlate with the HK Stock Index

COLLIERS - Hong Kong’s importance as a financial centre is demonstrated by its high
position on measures of economic scale and wealth such as stock market
value (the Hang Seng or HSI equity market is the second largest in Asia after Tokyo), city inward FDI, and volume of cross-border banking liabilities.
Financial stocks have a 48% weighting in the HSI, while financial tenants
occupy 54% of Grade A office space in Hong Kong’s CBD by our estimate
. It should thus be little surprise that there is a clear historic relationship
between the level of the HSI and average Grade A office rents in Central, with
a correlation coefficient (R) of 0.86 and a coefficient of variation (R²) of 0.74.
This represents the closest correlation between stock index performance and
rent levels of any city in this report.
As shown in Figure 1, until recently Grade A office rents in Central followed
the HSI with a lag of six to twelve months. However, since 2015 the two
measures have diverged: rents have risen steadily despite big swings in the
stock market. We doubt that this divergence can continue given:
1.
the HSI’s 22% fall (as of 5 November) from its January 2018 high, which
must have hit the confidence of investment banks and securities firms,
2.
the prospect of faster increases in real interest rates in Hong Kong than
in most other Asian markets over the next three years, owing to the
strong US economy and the Hong Kong dollar’s peg to the US dollar,
3.
the blow to confidence in Hong Kong from the US-China trade war

This is the background to our recent downward revision of office rent
forecasts for Hong Kong. We now expect citywide average rents to stay flat
in 2019 and rise at a 2.5% CAGR over 2018 to 2022. However, we expect
Grade A rents in Central/Admiralty to drop by 3.8% in 2019. With few signs
of major retrenchment or market exit by large international or Chinese
financial firms, rents should steady thereafter

Shanghai

As the financial capital of China, Shanghai has an equity market value of
about USD4.0 trillion with the finance sector accounting for 18% of the city’s
GDP.
In addition to its importance to the city’s GDP, the finance sector accounts
for 31% of the Shanghai Composite Index¹ (SHNCOMP) weighting by industry,
and by our estimate for 42% of Grade A office stock in the city’s six prime
CBDs (Lujiazui, Zhuyuan, Huangpu, Jing’an, Xuhui and Changning).
Given the importance of the financial sector in Shanghai’s economy, one might expect
there to be a relationship between the equity market and office rents.
However, the empirical result of our ANOVA testing suggests the relationship
between the two measures is not high, with a correlation coefficient (R) of
0.39 and a coefficient of variation (R²) of 0.15. Figure 5 shows that office
rents in key area of Lujiazui (which we have used because the data set is
longer) diverged sharply from stock market performance over 2009-2014.
The equity market in mainland China has its own characteristics which partly
reflect government efforts to keep the market stable. Stock exchanges in
China are A and B share markets. The A share market (denominated in RMB)
is mostly closed to foreign investors while the B-share market (denominated
in USD in Shanghai) is open to foreigners. These features help explain why
Chinese stock markets can move quite differently from other big exchanges,
although Chinese markets are certainly not immune to global pressures.
As Figure 9 shows, Grade A office rent in Lujiazui was in a strong upward
trend between 2010 and 2016, but has drifted down since then. We assume
that the confidence of financial occupiers in Shanghai has been affected by
the poor performance of the Shanghai stock market (as of 5 November,
down by 25% from its recent peak in early January 2018), and by the
renewed weakness of the Chinese currency against the US dollar so far this
year. If so, it may well be that office rents in Shanghai’s financial districts
start to track the stock market more closely from now on.
On the other hand, the economy of Shanghai as a whole looks broad enough
to withstand any shocks in the financial sector. We forecast average annual
rent growth of 1.5% across the city’s various sub-markets over 2018-2022

Note: Colliers will shortly launch its “Top Locations in Asia (Finance)” report. This
recommends the best urban locations for financial occupiers in the region by
examining around 60 criteria relevant to choice of location across 16 cities.

> Colliers: http://www.colliers.com/-/media/files/apac/asia/colliers-finance-sector-vulnerability-20181102-2.pdf

[drbubb]

Hang Lung Group showing nice bounce on High Volume

So far today ...  HK10: $20.80 +0.65 +3.23% v582k, HK101: $15.16 +0.32 +2.16% v3.3M

At $21.00, HK10 is 9.8% above recent low. At $15.16 HK101 is 9.1% above its Low.

[drbubb]

HK101 / Hang Lung ... update :

[drbubb]

Hang Lung Co's (HLG & HLP) have had a decent bounce

So I let some go

HK10 / HLG ... 2yr : 1yr : HK$21.70 / HLP: 2yr : 1yr: $15.84

Effectively, by selling some now at a profit, I am collecting some of the dividends early.

If the stock drops back down, I will buyback what I sold

Here's

HK-87001 ... update :

[drbubb]

HK10 now down to just 130% of HK101 - Time to deploy spare cash?

HK10 vs-101 ... fr.12/24/17 : w/HK2823 : w/HSI : 10d :

===== : -HSI- : #2823: ratio: HK10,HK101: Ratio : 87001: 3081: G,P,X,V: $Cash: w/Cash: $Overall: $GAIN
Start-- : 24,994: 12.42: 20.12: 19.18: 14.00: 137.0% 00.00: 30.05: 2,023.0: 0000.0: 2,023.0: $2,033.0:
11/15 : 26,103: 12.26: 21.29: 21.00: 15.14: 138.7% $3.16: 29.40: 2,153.0: 0000.0: 2,153.0: $2,163.0: $130.0
11/30 : 26,507: 12.06: 21.98: 21.70: 15.84: 137.0% $3.21: 29.75: 2,100.0: 0112.4: 2,223.1: $2,223.1: $190.1
12/21 : 25,651: 11.32: 22.66: 19.78: 15.14: 130.6% $3.20: 30.65: 2,002.6: 0112.4: 2,115.0: $2,124.5: $091.5

[drbubb]

Hang Lung vs Gold, HK2823 ... update :

[drbubb]

Surprizing Correlation: SLV/ Silver & Hang Lung properties

"they are not expected to correlate - But they do!"

Chart : All-data : 10-yr : 5-yr : from 1/2007 , w/hk10 :

Back into a Cyclical upturn?  Is Chinese investment the reason?

Trade Dollar, 1912 Great Britain-China, minted in Silver

In history, Silver was more of a monetary factor in China than Gold

[drbubb]

The China Trade Silver Dollar

The original Chinese Trade Dollar was an unsuccessful attempt by the Chinese government to offer a locally made alternative to the large foreign silver coins circulating in China during the last part of the eighteenth century. The Chinese mints were simply not up to producing a well-made product at a competitive price.

Trade dollar (wiki)

The existence of trade dollars came about because of the popularity of the silver Spanish dollar in China and East Asia. Following the establishment of the Spanish Philippines, Intramuros became an entrepôt for Chinese goods in one direction and silver, from across the Pacific to the Spanish held silver mines of Mexico, in the other. This so-called "Manila Galleons" trade route, led from the 16th Century onwards to the wide circulation of "pieces of eight" in East Asia.

The high regard in which these coins came to be held, led to the minting of the silver Chinese yuan, a coin designed to resemble the Spanish one. These Chinese "dragon dollars" not only circulated in China, but together with original coins of Spanish-Mexican origin became the preferred currency of trade between China and its neighbours. Defeated in the First Opium War China was forced to open its ports to foreign trade, and in the late half of the 19th Century Western nations trading with China found it cheaper and more expedient to mint their own coins, from their own supplies of silver, than to continue to use coins from Mexican sources. These so-called trade dollars would approximate in specification, weight 7 mace and 2 candareens (approx. 27.2 grams) and fineness .900 (90%), the Spanish-Mexican coins so long trusted and valued in China.

United Kingdom

 

A Trade Dollar from the reign of Victoria. It is dated 1900 and minted at the Bombay mint. / Hong Kong dollar

With the extension of British trading interests in the East, especially after the founding of Singapore in 1819 and Hong Kong in 1842, it became necessary to produce a special Dollar so as to remove the reliance of a British Colony upon the various foreign coins then in circulation.

"China trade silver dollars" were a direct result of the First (1839–1842) and Second Opium War (1856–1860), which broke out when Chinese authorities tried to stop Britain from smuggling opium into the country. The loser, China, had to open up a number of ports to British trade and residence, and cede Hong Kong to Britain. In the decades that followed, merchants and adventurers flocked to these areas, and international trade flourished. Foreign banks were established and large silver coins from all over the world began arriving to pay for tea, silk and Chinese porcelain to be shipped abroad. These .900 fine silver trade dollars were then circulated throughout China, where they were readily accepted as a medium of exchange. The British Trade Dollars, minted exclusively for use in the Far East, depict Britannia standing on shore, holding a trident in one hand and balancing a British shield in the other, with a merchant ship under full sail in the background. On the reverse is an arabesque design with the Chinese symbol for longevity in the center, and the denomination in two languages - Chinese and Jawi Malay.

The British Trade Dollar was designed by George William De Saulles and minted from 1895 for Hong Kong and the Straits Settlements. But after the Straits dollar was introduced to the Straits Settlements in 1903, it became exclusively a Hong Kong coin produced until 1935. Those with the mint mark "B" were produced at the Bombay Mint; others, marked "C", were struck in Calcutta. Those with no mint mark were produced in London. The mint mark "C" can be found in the ground between the left foot of Britannia and the base of the shield, while the mint mark "B" is located in the center prong of the trident. The 1921-B dollar was struck but never released for circulation, and only a limited number of 1934-B and 1935-B coins were released.

United States

Main article: Trade dollar (United States coin)

 

1873 U.S. Trade Dollar pattern.

The United States trade dollar is a silver (fineness of .900 or 90%) dollar coin that was issued by the United States Mint and minted in Philadelphia, Pennsylvania, Carson City, and San Francisco from 1873 to 1885. Business strike trade dollars were last produced in 1878 and proof coin production continued until 1885.^[5] The coin weighs 420 grains (27.2 g), about 8 grains (0.52 g) more than the domestic silver dollar (Seated Liberty Dollars and Morgan Dollars) of the time. It is 4 grains heavier than the Mexican peso; however, the peso is .903 silver.^[6]

The coin was designed by William Barber, the mint's chief engraver. More trade dollars were minted in San Francisco than Carson City and Philadelphia combined. San Francisco was closest both to the source of the silver as well as the ultimate destination of the coins, China. Many Trade dollars have what are called "chopmarks" on them. Chinese merchants would stamp the coins in order to verify their correct weight and value.^[6]

The United States Congress authorized the U.S. Mint to create a trade dollar to improve trade with the Orient, China in particular. Prior to that, the Mexican peso had been the primary silver coin used in trading with China. In fact, the eagle on the trade dollar's reverse looks quite similar to the peso's.

Collectors are warned that recently a large number of U.S. Trade dollars have been forged in China made with base metal. Careful testing or purchasing from known dealers or buying sealed and certified coins may be necessary to avoid these fakes.

> wiki: https://en.wikipedia.org/wiki/Trade_dollar

 

[drbubb]

HK10 (Hang Lung Group) has recently correlated better with China stocks (hK2823) than HLP (HK101)

Having sold some shares in:  HK10 (at $21.70) and HK101(at $15.78) near recent highs ...

I used the proceeds yesterday to buyback into HK10 at $19.85

Hang Lung Group & Properties vs A50 China stocks (HK2823) ... update :

History

Timing- : HK-10-: HK101,%h10 / H2823,%h10/ SLV-, %hk10: 3Pcts: Hk3081 /hk10:
07.05.11: $50.45: 32.25, 156.% / 13.16, 40.8% / 34.63, 107.% 304.%/ 37.30: 73.9%:
YE 2012 : $44.05: 30.80, 143.% / 11.14, 36.2% / 29.37, 95.4% 275.%/ 40.95: 93.0%:
YE 2013 : $39.15: 24.50, 160.% / $9.34, 23.9% / 18.71, 76.4% 260.%/ 29.50: 75.4%:
YE 2014 : $35.20: 21.75, 162.% / 12.98, 42.9% / 15.06, 69.2% 274.%/ 29.35: 83.4%:
YE 2015 : $25.20: 17.64, 143.% / 10.82, 61.3% / 13.19, 74.8% 279.%/ 25.90: 103.%:
YE 2016 : $27.00: 16.44, 164.% / 10.54, 64.1% / 15.11, 91.9% 320.%/ 28.30: 105.%:
6/30/16 : $23.25: 15.62, 149.% / $9.85, 63.1% / 17.86, 114.% 326.%/ 31.90: 137.%:
YE 2017 : $28.75: 19.10, 151.% / 15.02, 78.6% / 15.99, 83.7% 313.%/ 31.60: 110.%:
6/30/17 : $32.30: 19.50, 166.% / 12.54, 64.3% / 15.71, 80.6% 311.%/ 30.30: 93.8%:
Av'12-17: ===== : ==== . 152.% / ==== . 51.2% /  ====. 81.9% ===.%/  
12.28.18: $20.00: 15.06, 133.% / 11.38, 75.6% / 14.30, 95.0% 304.%/ 31.00: 155.%:

[Traineeinvestor]

The larger HK property developers like Henderson, SHK, CKA, NWD and HLP are all selling at around 50% (or more) discount to NAV.  Given that they have rock solid balance sheets, they seem to be pricing in a major decline in HK property prices and/or commercial rents. I've added a few more CKA (HK:1113) to the portfolio.

Edited December 28, 2018 by Traineeinvestor

[drbubb]

Thanks, I will take a look at CKA / Hk1113

Meantime, I added even more HK10 today, shifting funds out of HK3081 / Value Gold, as it jumped recently and opened up a Gap to HK.

I like HK10 because of:

+ the huge discount to NAV

+ the stable & predictable cash flows from first class shopping malls

+ the possibility or probability that China related shares will jump in 2019, if there is a resolution to the (needed) Trade War between the USA & China

HK3081 versus HK10 : fr. 12/20/15 :

#3081: $31.00 sold:  xxxx @ $31.00 = +12/28
HK#10: $20.00 BOT- yyyy @ $20.00 =  - 12/27
HK#10: $19.85 BOT- yyyy @ $19.85 =  - 12/26
=====
HK#10: 12/04- sold zzzz @ $15.78 = $?
HK101: 12/04- sold zzzz @ $21.70 = $?

HSI-in Gold looks like it may have hit a potential Support level just below 20.0 to 1.

[drbubb]

HIGHER LOWS - HK Property stocks may have put in an important Low

Wharf & Henderson... & HK10 - HLG

After restructuring, Wharf may now be a "development-oriented" version of HL

Symbol Company : YrLow : Last-- : change: PE-R.
HK 04/ Wharf Hld.: $18.70: $20.85: +11.5%: 3.89:
HK 10/ H.Lung Gr. : $19.12: $20.10: +5.12%: 4.60:
HK 12/ Henderson: $36.15: $41.20: +14.0%: 5.79:
HK101/ H.Lung Pr.: $13.90: $15.34: +10.4%: 7.71:
HSI--/ Heng Seng-- : 24,541: 25,836: +5.28%: N/A :

Chart : hk4 & hk12 ... update : w/hk10 : "the Pack" :

"The Pack" has slid lower, with HSI on top

===

[drbubb]

HK10 has rallied back to $21.

But I think it may break resistance there and head toward $23, perhaps higher

HK10 ... 5-yr : 2-yr : $20.95

"The PACK" is running up... Led by HSI possibly

==

[drbubb]

Hang Lung Properties / HK101 is rising fast... HK10 is lagging (recently by 3%, about $0.65)

HK10-etc ... 10d / Last: $21.95 ... hk101-$16.64 x 1.369= $22.78! /$21.95= 103.8%

HK10-etc ... since 9.1.2018 / hk10: 21.95/19.12= 114.8% / hk101: $16.64/13.90= 119.7% … hk101+4.9% more

Hang Lung ... updated to 10/12/18 midday:

Symbol : Co.----- : Price-- /hk101: tBkVal: P-BV. : PE-R. : Yield% : Div. ? : Earn? :
87001  : Hui Xian- :  03.08 : 21.6% : # 4.71: 65.4% : 11.85 : 9.09% : #0.28 : #0.26 :
HK10- : HL-Group: $19.50 : 1.369 : $62.87: 31.0% : 5.000: 4.10% : $0.80 : $3.90 :
HK101 : HL-Prop.: $14.24 : 1.000 : $30.59: 46.6% : 7.867 : 5.26% : $0.75 : $1.81 :
HK778 : FortuneR : $ 8.67 : 60.9%: $14.07: 61.6% : 10.84 : 0.00% : $0.00 : $0.80 :
H2823 : A50china : 11.40 : 68.5% :
=====> Data-WSJ :

Hang Lung ... updated to 1/29/19 midday:

Symbol : Co.----- : Price-- /hk101: tBkVal: P-BV. : PE-R. : Yield% : Div. ? : Earn? :
87001  : Hui Xian- :  03.29 : 19.8% : # 4.71: 69.8% : 12.65 : 8.51% : #0.28 : #0.26 :
HK10- : HL-Group: $21.95 : 1.319 : $62.87: 34.9% : 5.628: 3.64% : $0.80 : $3.90 :
HK101 : HL-Prop.: $16.64 : 1.000 : $30.59: 54.4% : 9.193 : 4.51% : $0.75 : $1.81 :
HK778 : FortuneR : $9.75 : 58.6%: $14.07: 69.3% : 12.19 : 0.00% : $0.00 : $0.80 :
H2823 : A50china : 12.44 : 74.8% :
=====> Data-WSJ :

(in edit / Tuesday - HK10 played catch-up today):

HK10-etc : 5d : High: $22.95

[drbubb]

CASH is building fast, as I sell progressively into to the Rally.

TIME to Revive this?

David Webb's Stock ideas / Hong Kong Investments

(Might get some ideas there)

[drbubb]

Hang Lung Properties (101) keeps running ahead of HL Group (10)

Looks like I put my chips mainly on the wrong one. haha

chart ... update :