Problem with nomad is its high PE. Nomad is net cash company but has PE of 20. It doesn't hv consistent earning record. However most concern is: paying too much to buy won't let u prosper, let alone swapping ur high intrinsic value plenitude
Incremental revenue is a sure, however profit is uncertain. Tg bungah hotel managed by plenitude is actually making a loss if u check its latest annual report, thus adding other hotels: making profit is not a sure for me. It should buy nomad by using a combination of stock issue and cash.
In fact, i am not agreed with plenitude take over nomad. plenitude is poor in managing hotel business. just look at hotel in tanjung bungah, spent 35mil for renovation and reopen in oct 2013, until now is still facing loss.
Nomad is actually a cash cow. This cannot be discovered by EPS. I can understand why someone would like to control Nomad, not just because of its management, but its ability to generate cash. You can expect more dividend in future.
If ROE of Nomad can be improved under management of Plenitude then this acquisition is good, hopefully it won't drag ROE and EPS of Plenitude (share dilution effect)
Theme play is not on property anymore....property market down....price too high and not affordable..UEMS price plunge cos too many condos build in Iskandar! ... Unless plenitu declares special dividend or bonus, I doubt there is any excitement here!
plenitude land in tebrau very good future but buying normad ie hotel business is a no-no.hotel business just like airline business, very sensitive n more down then up.alway upgrading, renovation bla bla...always eating mup cash flow.below rm1.50 then good buy.now goodby.
This book is the result of the author's many years of experience and observation throughout his 26 years in the stockbroking industry. It was written for general public to learn to invest based on facts and not on fantasies or hearsay....
hanhan07
162 posts
Posted by hanhan07 > 2015-03-27 14:21 | Report Abuse
pletidude just like a dead bull, not able to move up