The following is from Batbeer on Gurufocus. He wrote an outstanding article on Nam Tai 3 years ago:
You have the Shenzhen Special Economic Zone (SEZ) and you have the new Qianhai Modern Service Industry Cooperation Zone. Qianhai is an even more special zone within the regular special economic zone :o)
The property in Bao'an/Gushu is just outside the Qianhai zone but definitely within the SEZ.
I have seen other sources but I think wikipedia is clear enough about the SEZ: https://en.wikipedia.org/wiki/Shenzhen
The Gushu property is close to the Shenzhen airport and is a mile from the Gushu subway station on the Luobao line. That is property #2 in the JLL report. The pics for that particular property are on p22. That is a fairly urban area. At one time I "walked" the streets with google street view but it seems this is no longer possible.
The other properties are indeed in fairly rural areas. On a macro level I believe Shenzhen is pushing its industrial activities out into the more rural areas and converting the old industrial district (Bao'an) to a financial/services area.
My understanding was that one of NTP's properties is located in Guangming which became part of SEZ in 2010. As for the second plot, aka Gushu, it is still in Bao'an District which has not joined Shenzhen's SEZ. Koyak, you seem to think that they are still both outside the SEZ. Does anyone have any insight? Interestingly the real estate companies valued the smaller plot (Gushu) greater than the much larger Guangming.
Bleuun, thanks for the analysis. They say once the land is fully developed it'll be worth 10,257 million RMB. But I don't think any one of us outside investors could estimate the cost of development
Thanks for clarifying the location of the land. I assume you are referring to both plots of land: Guangming and Gushu. I thought that their land was inside the SEZ.
Lowballing valuations and stiffing shareholders would be uncharacteristic of Koo. I doubt he would sacrifice his reputation like that. Going private at a low valuation would lead to major shareholder lawsuits and a very messy deal for the insiders. Investors need to be very patient with this holding to realize its full potential.
The Shenzhen property bubble may burst but the secular trend is upward and if you are a long term investor the you should be fine. Shenzhen is only 30 miles from the world's most expensive property market, Hong Kong. The forces driving Shenzhen's economy (ie: increased shipping traffic, trade, and very vibrant start ups and companies) are here to stay for a long time.
This is a continuation of the discussion by Koyak and mrkruncher. I started a new thread since Yahoo boards is a little goofy.
I was surprised that the valuations hadn't changed much from the last time given what I've been reading about Shenzhen. I also tried to get an understanding as to whether the company can actually sell its property as is but I could get no insight from NYC investor relations (McGrath).
The valuations were disappointing but as Koyak points out, the company is still worth at least $14. Any ideas why the valuations remained flat?
$8 million refund and market cap of $5 million. For sure the stock is cheap but as you note they continue to burn cash. If they stop the hemorrhaging, forget 50 cents - it'll be a $2 stock. But that is a big if.
I'm ok with Elliott ignoring Wall Street. But his capital allocation is a disaster. Why do you need so much cash/working capital to realize the small revenue? They absolutely need to return cash to shareholders. I have a hard time applauding management when they do such a poor job with capital allocation. Of your 4 suggestions, I could not agree more with you on the 4th point.
Value and price can diverge for prolonged periods. Management has been fine in managing the business, but it is wrong for them to not try to make the stock price reflect the true value of the business. I am happy as a long term holder but it is unfair for current sellers.
3% is about 500,000 shares. As you know the trading volumes are very low. I own almost 70,000 shares and am looking to buy a lot more. If you are ever interested in selling large blocks of your shares (ie: 50,000 shares or greater), I will be happy to buy your shares. Please post on this board and I will give you my personal e-mail and then we can arrange a sale through our brokerage accounts. In fact if you are interested I can give you my e-mail now.
May calls: tender offer expires May 23rd, so the timing of monetizing your calls may be tricky. June may have been better.
June puts: I think you will get your $1.10 premium, but writing puts for a much higher strike price (ie: $90) would have made you real money.
We'll see soon enough how it will all turn out. Good luck!