The Sun rises from the East

Eastern Holdings (EH)

Eastern Holdings, traditionally a publishing/marketing business, diversified into the property business three years ago - right when the market started to turn up.

Media

The traditional media business churns along nicely, with focuses in Print, Electronic Media & Marketing Services. The magazine segment is rather ewll-established. Noteable titles are Motherhood, Motoring, Traveller, Teens & Golf. They are also in the exhibition business - the recent Comex is organised by EH.

Some numbers (FY 06/07)
Advertising income $9.76 million
Sale of exhibition sale $8.05 million
Subscription fees $1.21 million

Revenue $19.02 million
Net Profit $2.08 million
Net profit margin - 10.9%

Valuing the fat cash cow media business at $20 million.

Property development

Now, what is more exciting is the property development/investment segment. EH just secured a enbloc deal and acquired a good landbank at Holland.

Loyang Terrace - 999 years leasehold @ $12.5million

- Total land size 23,158 sq ft, Total permissible gross floor area 32,421 sq ft

Even at a reasonable $900psf, NP = $13 million

Grove Drive 81 +83

- freehold land @ combined price of $22.8 million

- Total land size 20,457 sq ft, Total permissible gross floor area 42,387 sq ft, no DC charge

At a reasonable $1400psf, NP = $30 million

D'Evelyn @ 18 Evelyn Road

- 5 storey with 24 Apartment Units with total gfa of 30,767 sq ft

- Having achieved a record $1583psf, total NP = ~$25 million(?)

Property investment

EPL Building @ Lower Delta Road
- 4 storey building; Reitable for $25 million, that's about $20 million above book.

70% interest in 39 Mactaggart Road purchased for $5m in April 2007.
70% interest in 12/14 Hoy Fatt Road purchased for $6.2m in May 2007.
51 Neil Road for $3.2million in Aug 2007.
Say a conservative $3 million net profit.

40, 51, 53, 55, 57, 71 Tras Street (estimated 22,500 sq ft in total)
- Average costs less than $480psf, market rate $1050psf.
- Tenated out at the moment but management has indicated these will be sold at anytime when the price is right for capital gains.
- Excluding the rental income, NP of $12.8 million based on profit of $570psf

110/111 Amoy Street - 12,540sq ft @ $4.7m on April 2007
- Average cost at $344psf, market rate $1050psf.
- NP of $8.9 million

87/88 Amoy Street
- sold for $14.1 million in May 07.
- NP of $7 million

9 Apartment units in Zhuhai, China - 450 sq m

* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
For a quick back of the envelope calculation
Media business at $20 million
Loyang Terrace $13 million
81/83 Grove Drive $30 million
D'Evelyn $25 million
40, 51, 53, 55, 57, 71 Tras Street $12.8 million
39 Mactaggart Road, 12/14 Hoy Fatt Road & 51 Neil Road $3 million
EPL Building $20 million
87/88 Amoy Street $7 million
110/111 Amoy Street $8.9 million

Total: $139.7 million!!!
Current Market Cap (on 13 Sep) = $83 million

What I like too:

About 36.35% of the issused ordinary shares of the Company is held by the public.
Top 20 shareholders hold 75.71% of the Company.

Make it your business?