Friday, February 02, 2007
Money can't buy Benz, nor its Dealer
I read from the 'Investor's Dairy' weeks ago that in China now, people have to wait 9 months for a Mercedes Benz. And it said the last time when we Hongkies needed to wait that long for a car, it was the pre-handover 1997. It was also the days of the 'big fly' when Mercedes Benz were frequent flyer.
What's surprising is that it may take you just as long to buy enough shares in the China Mercedes dealer Lei Shing Hong (238)!
The allure of the Mercedes brand needs no introduction. Hong Kong has the highest Mercedes 'density' in the world, but I think in time that'll pale compared to a major Chinese city like Shanghai or Beijing. And unlike a Rolex, a Mercedes can't be bought here in HK and carried across border (or more accurately not anymore) so it must be bought via dealers of LSH.
LSH hold a 49% interest in the Mercedes Benz distribution company in China/HK, Taiwan and Korea. It also runs Mercedes dealerships in the Northern and Eastern China, HK, Taiwan, Korea (where it distributes Porsche as well) and Vietman. LSH also distributes Caterpillar heavy equipment in Eastern China and Taiwan.
China/HK business contributed 77% of turnover while sales from automobiles (70%) and Caterpillar equipment (17%) contributed the bulk of turnover. LSH is a growth story of both luxury consumption and construction in China.
Automobile dealership can be a risky business with slow moving inventory tying up working capital, not the case with Mercedes Benz in China. And in worst case old stocks can be cleared with ease at a 10-15% discount, leaving LSH more or less unscratched.
Indeed, profit grew for 5 straight years, though mildly, and turnover only had a dip in 2004. 2006 interim reported 37% growth in turnover to $9b and 52% growth in profit to $170m. I expect 2006 profit to be a little more than $300m.
Maybe business was simply too easy, management found amusement in dangling stocks and foreign currencies and got burnt in 2005 losing close to $90m. LSH still made $252m that year.
LSH also spent some cash in building properties too. This one they had better luck and projects sold in the last 2 years made good profits. But I'd appreciate more if the management spent that cash to pay dividends or pay down its debt. At 2006 interim LSH held $1.6b cash and had $2.8b debt. Interest for half year was $95m. Dividends were unchanged for 5 years at only 3 cents.
With a market capitalization of $3.6b and NAV of $5.5b, LSH is a good bet on China premium auto. But liquidity of the shares is non-existent and it makes you wonder where the shares have gone. LSH is perhaps even harder to buy than a Mercedes.
DISCLOSURE: I don't hold 238 at time of writing.
What's surprising is that it may take you just as long to buy enough shares in the China Mercedes dealer Lei Shing Hong (238)!
The allure of the Mercedes brand needs no introduction. Hong Kong has the highest Mercedes 'density' in the world, but I think in time that'll pale compared to a major Chinese city like Shanghai or Beijing. And unlike a Rolex, a Mercedes can't be bought here in HK and carried across border (or more accurately not anymore) so it must be bought via dealers of LSH.
LSH hold a 49% interest in the Mercedes Benz distribution company in China/HK, Taiwan and Korea. It also runs Mercedes dealerships in the Northern and Eastern China, HK, Taiwan, Korea (where it distributes Porsche as well) and Vietman. LSH also distributes Caterpillar heavy equipment in Eastern China and Taiwan.
China/HK business contributed 77% of turnover while sales from automobiles (70%) and Caterpillar equipment (17%) contributed the bulk of turnover. LSH is a growth story of both luxury consumption and construction in China.
Automobile dealership can be a risky business with slow moving inventory tying up working capital, not the case with Mercedes Benz in China. And in worst case old stocks can be cleared with ease at a 10-15% discount, leaving LSH more or less unscratched.
Indeed, profit grew for 5 straight years, though mildly, and turnover only had a dip in 2004. 2006 interim reported 37% growth in turnover to $9b and 52% growth in profit to $170m. I expect 2006 profit to be a little more than $300m.
Maybe business was simply too easy, management found amusement in dangling stocks and foreign currencies and got burnt in 2005 losing close to $90m. LSH still made $252m that year.
LSH also spent some cash in building properties too. This one they had better luck and projects sold in the last 2 years made good profits. But I'd appreciate more if the management spent that cash to pay dividends or pay down its debt. At 2006 interim LSH held $1.6b cash and had $2.8b debt. Interest for half year was $95m. Dividends were unchanged for 5 years at only 3 cents.
With a market capitalization of $3.6b and NAV of $5.5b, LSH is a good bet on China premium auto. But liquidity of the shares is non-existent and it makes you wonder where the shares have gone. LSH is perhaps even harder to buy than a Mercedes.
DISCLOSURE: I don't hold 238 at time of writing.
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But I'd appreciate more if the management spent that cash to pay dividends or pay down its debt.
Dividends were changed for 5 years at only 3 cents.
==> seem the management not willing to share the profit with investor as div. payout ratio is just 13% !
Maybe business was simply too easy, management found amusement in dangling stocks and foreign currencies and got burnt in 2005 losing close to $90m.
==> seem the management not focus on core busniess !
Dividends were changed for 5 years at only 3 cents.
==> seem the management not willing to share the profit with investor as div. payout ratio is just 13% !
Maybe business was simply too easy, management found amusement in dangling stocks and foreign currencies and got burnt in 2005 losing close to $90m.
==> seem the management not focus on core busniess !
copy from 曾廣標blog
http://vitus99.blogspot.com/
From 文匯報:
[2007-02-03] 「湯臣一品」或需繳50億
雖然上海的土地增值稅徵收管理細則尚未出台，但關於土地增值稅計算的幾種方法已經在業內普遍流傳。上海有會計師按「湯臣一品」之前的「天價」成交個案，對應土地增值稅的稅率推算，湯臣一品需要繳交的土地增值稅將達50億元(人民幣，下同)之巨，完全符合「天價」樓盤的身份。 本報記者：荊才
據《東方早報》報道，湯臣一品符合稅務部門是次的清算條件，以公開報道的總成本每平方米3萬元左右，已申請銷售的面積91616平方米，售價每平方米11萬元，對應增值幅度60.32%，以及對應的土地增值稅累進稅制的計算標準計算，單純計算其打算出售的面積，繳交的增值稅額為33.24億；若把其出租的面積也計算入內，則需繳交的增值將達50.82億元。
售價每平方米11萬元
報道稱，湯臣一品在2005年10月就取得了A棟的銷售許可，因此在2008年10月，無論銷售套數是否達到總量的85%，稅務機關都可以要求湯臣一品對A棟實施土地增值稅的清算。
上海信利律師事務所劉福元律師表示，屆時是否清算、如何清算湯臣一品土地增值稅的取決權在上海地方稅務部門。
根據《通知》規定，主管稅務機關可要求納稅人進行土地增值稅清算。這也就意味著，稅務機關可根據具體情況，靈活決定清算的範圍和清算的時間。
據上海「網上房地產」網資料顯示，湯臣一品在2005年10月29日和2006年8月3日兩次獲得銷售許可證，分別申請銷售的面積是36047.67平方米和55568.68平方米，項目銷售面積總計91616.35平方米。這些面積也就是「湯臣一品」A棟和C棟。
資料顯示，湯臣一品地塊在1994年由湯臣集團自上海富都世界有限公司獲得該幅土地80%的股權，出讓金5820萬美元，加上2005年湯臣集團這塊土地另外的20%股權付出的1800萬美元，總計花費了約6億元人民幣的土地代價。不過，該樓盤去年以「天價」開售，潛在買家要看房時，都要事先繳交200萬元「誠意金」、或填寫資產證明的做法，曾經惹來不少議論。
http://vitus99.blogspot.com/
From 文匯報:
[2007-02-03] 「湯臣一品」或需繳50億
雖然上海的土地增值稅徵收管理細則尚未出台，但關於土地增值稅計算的幾種方法已經在業內普遍流傳。上海有會計師按「湯臣一品」之前的「天價」成交個案，對應土地增值稅的稅率推算，湯臣一品需要繳交的土地增值稅將達50億元(人民幣，下同)之巨，完全符合「天價」樓盤的身份。 本報記者：荊才
據《東方早報》報道，湯臣一品符合稅務部門是次的清算條件，以公開報道的總成本每平方米3萬元左右，已申請銷售的面積91616平方米，售價每平方米11萬元，對應增值幅度60.32%，以及對應的土地增值稅累進稅制的計算標準計算，單純計算其打算出售的面積，繳交的增值稅額為33.24億；若把其出租的面積也計算入內，則需繳交的增值將達50.82億元。
售價每平方米11萬元
報道稱，湯臣一品在2005年10月就取得了A棟的銷售許可，因此在2008年10月，無論銷售套數是否達到總量的85%，稅務機關都可以要求湯臣一品對A棟實施土地增值稅的清算。
上海信利律師事務所劉福元律師表示，屆時是否清算、如何清算湯臣一品土地增值稅的取決權在上海地方稅務部門。
根據《通知》規定，主管稅務機關可要求納稅人進行土地增值稅清算。這也就意味著，稅務機關可根據具體情況，靈活決定清算的範圍和清算的時間。
據上海「網上房地產」網資料顯示，湯臣一品在2005年10月29日和2006年8月3日兩次獲得銷售許可證，分別申請銷售的面積是36047.67平方米和55568.68平方米，項目銷售面積總計91616.35平方米。這些面積也就是「湯臣一品」A棟和C棟。
資料顯示，湯臣一品地塊在1994年由湯臣集團自上海富都世界有限公司獲得該幅土地80%的股權，出讓金5820萬美元，加上2005年湯臣集團這塊土地另外的20%股權付出的1800萬美元，總計花費了約6億元人民幣的土地代價。不過，該樓盤去年以「天價」開售，潛在買家要看房時，都要事先繳交200萬元「誠意金」、或填寫資產證明的做法，曾經惹來不少議論。
# posted by 
: 2:54 PM, February 03, 2007
: 2:54 PM, February 03, 2007
Thanks accountboy hing for the info.
I honest don't know what the Tomson situation will be like between now and 2008. Right now we can only wait and see.
Of course I don't mind Tomson paying $5b tax if it can sell the units at 100k per sqft. On the other hand if it is forced to sell at substantially reduced prices, the eventual LAT paid will be substantially less as well, e.g. according to oriental news info, selling at 30k per sqft plus or minus will mean little or no LAT.
Which way it'll go, I can't tell.
I honest don't know what the Tomson situation will be like between now and 2008. Right now we can only wait and see.
Of course I don't mind Tomson paying $5b tax if it can sell the units at 100k per sqft. On the other hand if it is forced to sell at substantially reduced prices, the eventual LAT paid will be substantially less as well, e.g. according to oriental news info, selling at 30k per sqft plus or minus will mean little or no LAT.
Which way it'll go, I can't tell.
On LSH, actually i'm not so sure if the management are just employees or shareholders. But to me management staff salary is reasonable and maybe major shareholders are not in need of money. The biggest headache remains that the shares can't be bought. And it doesn't look like a pre-privatisation process either.
the worst case is : few flats can be sold out, but the tax still got to be paid.
# posted by : 12:17 AM, February 04, 2007
: 12:17 AM, February 04, 2007
Very good analysis on LSH. It's a pitty that there is virtually no liquidity in their stock 238.HK . It just doesn't make sense to be listed publicly with not much trading activities for 3 years.
I also agreed that privatization seems unlikely given the debt ratio. So, my only logical conclusion is that majority of the shares are eld my very few parties who use these shares as collateral for banks/loans...
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I also agreed that privatization seems unlikely given the debt ratio. So, my only logical conclusion is that majority of the shares are eld my very few parties who use these shares as collateral for banks/loans...
# posted by : 6:21 PM, April 17, 2007
: 6:21 PM, April 17, 2007Subscribe to Post Comments [Atom]
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